PERNOD-RICARD - URD 2021-22 EN

6. Annual consolidated financial statements Notes to the consolidated financial statements

Property, plant and equipment Note 4.2

In accordance with IFRS 16, applicable from 1 July 2019, right-of-use assets for leases are recognised as property, plant and equipment in the class corresponding to the underlying assets, with the corresponding recognition of a lease liability. These are mainly offices occupied by the Group and recorded under Buildings. The value of right-of-use assets is determined on the basis of the amount of the lease liability, adjusted for the amount of prepaid rent, initial direct costs, benefits received from lessors and, where applicable, remediation costs. Right-of-use assets relating to leases are depreciated over the term of the lease. The accounting principles for determining the lease liability are detailed in Note 4.8 – Financial liabilities . Items of property, plant and equipment, including right-of-use assets, are written down when their recoverable amount falls below their net carrying amount.

Property, plant and equipment are recognised at acquisition cost and broken down by component. Depreciation is calculated on a straight-line basis over the estimated useful life of the assets. Useful life is reviewed on a regular basis. The average depreciable lives for the major categories of property, plant and equipment are as follows:

Buildings

15 to 50 years 5 to 15 years 3 to 5 years 25 to 33 years

Plant, equipment and tooling

Other non-current assets

Vines

Depreciation of property, plant and equipment is recognised within operating profit in the income statement. In accordance with the amendments to standards IAS 41 and IAS 16, vines are, since 1 July 2016, valued at acquisition cost and depreciated over their useful life. In accordance with IAS 41, agricultural produce (harvests) continues to be recognised at fair value on the balance sheet, after deducting estimated selling costs, as from the date at which it is possible to obtain a reliable assessment of price, for example by referring to an active market. Changes in fair value are recognised in the income statement. Land on which biological assets are planted is measured in accordance with IAS 16.

Movements of the period

Foreign currency gains and losses

of which right

of-use assets

Other movements 30.06.2021

30.06.2020 Acquisitions Allowances Disposals

€ million

Land

399

4

- - -

(5)

3

5

405

53

Buildings

1,766 2,186

84 60

(83)

21 21

49

1,838 2,264

442

Machinery and equipment

(118)

116

32

Other property, plant and equipment

870

80

- -

(64)

18

18

923 220

75

Assets in progress

182

217

(0)

2

(180)

-

Advance on property, plant and equipment

24

9

- -

(0)

(0) 65

(26) (17)

7

-

Gross value

5,427

454

(271)

5,658

602

Land

(40)

- -

(9)

2

(1)

(0)

(48)

(13)

Buildings

(621)

(120) (127)

58

(9)

3

(691)

(122)

Machinery and equipment

(1,272)

(0)

101

(17)

(3)

(1,317)

(15)

Other property, plant and equipment

(399)

(0)

(69)

50

(8)

0

(425)

(35)

Assets in progress

0

-

(0)

-

-

-

(0)

-

Depreciation/ impairment

(2,332)

(0)

(325)

211

(35)

-

(2,481)

(186)

Property, plant and equipment, net

416

3,095

454

(325)

(60)

30

(18)

3,177

218

Pernod Ricard Universal Registration Document 2021-2022