Page 68 - Forterra

66 FORTERRA
ANNUAL REPORT 2012
NOTES TO THE
FINANCIAL STATEMENTS
3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(d) Property, plant and equipment
Recognition and measurement
Items of property, plant and equipment are measured at cost less accumulated depreciation
and accumulated impairment losses. Cost includes expenditure that is directly attributable
to the acquisition of the asset.
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.
Gains and losses on disposal of an item of property, plant and equipment are determined
by comparing the proceeds from disposal with the carrying amount of property, plant and
equipment, and are recognised net within other income in profit or loss.
Subsequent costs
The cost of replacing a part of an item of property, plant and equipment is recognised in the
carrying amount of the item if it is probable that the future economic benefits embodied within
the part will flow to the Group, and its cost can be measured reliably. The carrying amount
of the replaced part is derecognised. The costs of the day-to-day servicing of property, plant
and equipment are recognised in profit or loss as incurred.
Depreciation
Depreciation is based on the cost of an asset less its residual value. Significant components
of individual assets are assessed and if a component has a useful life that is different from
the remainder of that asset, that component is depreciated separately.
Depreciation is recognised in profit or loss on a straight-line basis over the estimated useful
lives of each component of an item of property, plant and equipment. Leased assets are
depreciated over the shorter of the lease term and their useful lives unless it is reasonably
certain that the Group will obtain ownership by the end of the lease term.
Depreciation is recognised from the date that the properties, plant and equipment are installed
and are ready for use. Depreciation methods, useful lives and residual values are reviewed at
each reporting period and adjusted if appropriate.
The estimated useful lives for the current and comparative years are as follows:
Self-use office units 20 years
Furniture, fittings and equipment 5-10 years
Depreciation of an asset ceases at the date the asset is classified as held for sale in accordance
with FRS105 – Non-current Assets Held for Sale and Discontinued Operations.