14. Property, Plant and Equipment
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|
|
|
|
|
|||||
|
Land and buildings |
Plant installations and machinery |
Furniture, fixtures and other equipment |
Construction in progress and advance payments |
Total |
|||||
|
€ million |
€ million |
€ million |
€ million |
€ million |
|||||
Cost of acquisition or construction, December 31, 2017 |
3,186 |
11,166 |
509 |
517 |
15,378 |
|||||
Acquisitions |
– |
– |
– |
– |
– |
|||||
Capital expenditures |
10 |
118 |
26 |
543 |
697 |
|||||
Retirements |
(153) |
(78) |
(13) |
– |
(244) |
|||||
Transfers |
34 |
175 |
9 |
(218) |
– |
|||||
Transfers (IFRS 5) |
(12) |
(45) |
– |
– |
(57) |
|||||
Exchange differences |
33 |
150 |
2 |
8 |
193 |
|||||
Cost of acquisition or construction, December 31, 2018 |
3,098 |
11,486 |
533 |
850 |
15,967 |
|||||
|
|
|
|
|
|
|||||
Accumulated depreciation, impairment losses and impairment loss reversals, December 31, 2018 |
1,904 |
9,207 |
447 |
– |
11,558 |
|||||
Carrying amounts, December 31, 2018 |
1,194 |
2,279 |
86 |
850 |
4,409 |
|||||
Depreciation and impairment losses in 2018 |
95 |
471 |
33 |
– |
599 |
|||||
Depreciation |
92 |
467 |
33 |
– |
592 |
|||||
Impairment losses |
3 |
4 |
– |
– |
7 |
|||||
Impairment loss reversals in 2018 |
– |
– |
– |
– |
– |
No impairment losses were reversed for property, plant, and equipment in the reporting year (previous year: €18 million).
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|
|
|
|
|
|||||
|
Land and buildings |
Plant installations and machinery |
Furniture, fixtures and other equipment |
Construction in progress and advance payments |
Total |
|||||
|
€ million |
€ million |
€ million |
€ million |
€ million |
|||||
Cost of acquisition or construction, December 31, 2016 |
3,277 |
11,517 |
509 |
468 |
15,771 |
|||||
Acquisitions |
3 |
1 |
– |
– |
4 |
|||||
Capital expenditures |
29 |
123 |
16 |
341 |
509 |
|||||
Retirements |
(12) |
(78) |
(9) |
(1) |
(100) |
|||||
Transfers |
40 |
215 |
15 |
(270) |
– |
|||||
Transfers (IFRS 5) |
(10) |
(8) |
(1) |
– |
(19) |
|||||
Exchange differences |
(141) |
(604) |
(21) |
(21) |
(787) |
|||||
Cost of acquisition or construction, December 31, 2017 |
3,186 |
11,166 |
509 |
517 |
15,378 |
|||||
|
|
|
|
|
|
|||||
Accumulated depreciation, impairment losses and impairment loss reversals, December 31, 2017 |
1,932 |
8,725 |
425 |
– |
11,082 |
|||||
Carrying amounts, December 31, 2017 |
1,254 |
2,441 |
84 |
517 |
4,296 |
|||||
Depreciation and impairment losses in 2017 |
95 |
493 |
32 |
– |
620 |
|||||
Depreciation |
94 |
488 |
32 |
– |
614 |
|||||
Impairment losses |
1 |
5 |
– |
– |
6 |
|||||
Impairment loss reversals in 2017 |
(8) |
(10) |
– |
– |
(18) |
Borrowing costs of €4 million were capitalized in property, plant and equipment in the reporting year as part of the cost of qualifying assets (previous year: €2 million). The capitalization rate applied amounted to 1.4% on average (previous year: 1.2%).
Leasing
Property, plant and equipment includes assets with a total net value of €218 million (previous year: €247 million) held under finance leases. They comprise plant installations and machinery with a carrying amount of €134 million (previous year: €153 million), buildings with a carrying amount of €20 million (previous year: €26 million), and other property, plant and equipment with a carrying amount of €64 million (previous year: €68 million). The cost of acquisition or cost of construction of these assets as of the balance sheet date totaled €548 million (previous year: €549 million). For information on the liabilities arising from finance leases, see note 22.
In fiscal 2018, lease payments of €141 million (previous year: €102 million) were made for assets leased under operating leases as defined in IAS 17 (Leases). An overview of the maturities of payment obligations under operating leases can be found in note 25.
Lease payments for property, plant and equipment of €9 million are expected to be received in the following year from operating leases as defined in IAS 17 (Leases), not including investment property as outlined below. Lease payments totaling €5 million are expected to be received in 2020–2023, and lease payments totaling €5 million after 2023.
Investment property
The fair values of investment property are mainly determined using the income approach based on internal valuations for buildings and developed sites, and using the market comparison approach for undeveloped sites.
The total carrying amount of investment property as of December 31, 2018, amounted to €36 million (previous year: €59 million), and its fair value totaled €211 million (previous year: €280 million). The decrease in the carrying amount and fair value of investment property resulted primarily from the sale of various properties and buildings. The rental income from investment property was €26 million (previous year: €27 million), and the operating expenses directly allocable to this property amounted to €13 million (previous year: €15 million). Operating expenses for investment property not generating any rental income stood at €0 million (previous year: €1 million).
Rental income generated from the leasing of properties classified as investment properties stemmed in part from contracts for hereditary building rights and leases granted by the Covestro Group. These contracts with a weighted average remaining term of 35 years relate to space used by companies and contractual partners in the chemical industry at production sites in Germany. Based on current rental prices, around €5 million in compensation will be received annually from these long-term contracts for the use of this space in the coming years.