18.9) Land, furniture and equipment
Furniture and equipment are recorded at cost less accumulated depreciation and impairment loss. The cost includes expenses directly attributable to the acquisition of those assets and all costs associated with placing the assets in the location and in the condition necessary for them to operate as intended by Management.
Land is recorded at cost and it is not depreciated. Depreciation of other items of plant and equipment is calculated on the straight-line method based on the residual values over their estimated useful lives. The useful lives from the date of acquisition are 10 years. The useful lives at the acquisition date of the furniture and equipment are as shown below:
| | | 2016 | | 2017 | |
| | | | | | |
| Furniture equipment | | 10% | | 10 to 20% | |
| Machinery | | 10% | | 10 to 20% | |
| Computer equipment | | 33% | | 33 to 20% | |
| Transportation equipment | | 25% | | 20 to 25% | |
| Improvements to leased premises | | | | 10% | |
The residual values, useful life and depreciation method are reviewed and adjusted, if necessary, on an annual basis.
18.9.1) Land
Land represents a territorial extension for which the Company has an obligation of constructing 450 hotel rooms along with the National Tourism Fund (FONATUR in its acronym in Spanish) in Huatulco which are recorded at its cost and are not subject to depreciation. See Note 14c.
