Econocom - 2019 Universal registration document

06 consolidated financial statements

notes to the consolidated financial statements

Property, plant and equipment 10.2.

Property, plant and equipment owned outright Property, plant and equipment are carried at acquisition cost less any accumulated depreciation and impairment losses. Depreciation is recognised on a straight-line basis over the estimated useful life of the assets taking into account any residual value. Useful life In ژ years

Leases Leases, as defined by IFRS ژ 16, are entered in the statement of the consolidated financial position as an asset representing the right of use of the leased asset during the term of the contract. On the date that the lease takes effect, the right of use is valued at its cost, including: the initial amount of the liability, with the • advance payments made to the lessor, net of the benefits received from the lessor; initial direct costs incurred by the lessee • for the conclusion of the contract; and the costs of dismantling or restoring the • leased asset according to the terms of the contract. The right of use is depreciated over the useful life of the assets, which leads to a depreciation charge being entered on the income statement. On the date that the lease takes effect, the rental liability is entered for an amount equal to the discounted value of rents over the duration of the contract, as defined by the Econocom group. The valuation of the rental liability includes: fixed rents (including rentals considered • to be fixed in substance); variable rents based on a rate or index • using the rate or index on the date the contract comes into effect; any residual value guarantees awarded to • the lessor; the exercise price of a purchase option if • the exercise of the option is reasonably certain; and penalties for cancellation or non-renewal • of the contract.

Indefinite

Land

20–50

Buildings

5–10 3–7 4–7 5–10

Fixtures

IT equipment

Vehicles

Furniture

Land is not depreciated. When an item of property, plant and equipment comprises components with different useful lives, such components are recognised and depreciated separately. Gains or losses on the sale of an item of property, plant and equipment are determined as the difference between the proceeds from the sale and the carrying amount of the asset sold. They are included in either “Other operating income and expenses” or “Revenue from continuing operations” if the sale took place in the ordinary course of the Group’s business. No borrowing costs were included in the cost of any of the Group’s property, plant and equipment in the absence of any assets requiring a substantial period of time before they are ready for their intended use or sale.

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2019 annual report