Property, plant and equipment are stated at historical cost less accumulated depreciation and impairment losses. Historical cost includes expenditure that is directly attributable to the acquisition or construction of the asset. Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. Other costs are charged to the income statement when incurred.

Land is not depreciated. Depreciation on other assets is determined using the straight-line method to allocate their cost to their residual values over their estimated useful lives. The useful life of buildings is between 10 and 50 years, the useful life of other assets is between 4 and 10 years.

At the end of the reporting period, the assets’ residual values and useful lives are reviewed and adjusted if appropriate. Also, the carrying amounts of assets are reviewed to assess whether there is an indication of impairment. If such an indication exists, the asset’s recoverable amount is determined. An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount.

The gain or loss on disposal of an item of property, plant and equipment is determined by comparing the proceeds of the disposal to the carrying amount of the asset. A gain is recognised in other income, a loss is recognised as an impairment.