Every Note Counts
N otes to the Financial Statements
Year ended 31 December 2010
Property, plant and equipment
Property, plant and equipment are stated at cost less accumulated depreciation and impairment losses.
Cost includes expenditure that is directly attributable to the acquisition of the asset. The cost of self-constructed assets includes the cost of materials and direct labour, any other costs directly attributable to bringing the asset to a working condition for its intended use, the cost of dismantling and removing the items and restoring the site on which they are located, and capitalised borrowing costs. Cost may also include transfers from equity of any gain or loss on qualifying cash flow hedges of foreign currency purchases of property, plant and equipment. Purchased software that is integral to the functionality of the related equipment is capitalised as part of that equipment.
When parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment.
The gain or loss on disposal of property, plant and equipment is determined by comparing the proceeds from disposal with the carrying amount of property, plant and equipment, and is recognised net in the income statement.
Subsequent expenditure relating to property, plant and equipment that has already been recognised is added to the carrying amount of the asset only when it is probable that future economic benefits associated with the item will flow to the Group and its cost can be measured reliably. Other subsequent expenditure such as repairs and maintenance is recognised in the income statement as incurred.
Depreciation is recognised in the income statement on a straight-line basis over the estimated useful life (or lease term, if shorter) of each part of an item of property, plant and equipment.
Estimated useful lives are as follows:
Leasehold land Buildings Wharves, hardstanding and roads Plant, equipment and machinery Floating crafts Motor vehicles Computers
20 to 80 years 5 to 50 years 3 to 50 years 3 to 25 years 2 to 20 years 2 to 10 years 3 to 5 years
No depreciation is provided on capital work-in-progress until the related property, plant and equipment is ready for use. Depreciation methods, useful lives and residual values are reviewed, and adjusted as appropriate, at each reporting date.
Intangible assets with finite useful lives are stated at cost less accumulated amortisation and impairment losses. Intangible assets with infinite useful lives or not ready for use are stated at cost less accumulated impairment losses.
Port use rights
The expenditure incurred in relation to the right to operate a port are capitalised as port use rights. Port use rights are amortised in the income statement on a straight-line basis over the period of the operating rights being available.