Property, plant and equipment
Land and buildings with a carrying amount of € 4.5 million at 31 December 2020 (2019: € 4.7 million) have been pledged as security; on the one hand, to the trustees of the UK pension fund in the amount of € 2.8 million (2019: € 3.0 million) and, on the other hand, as security for a bank loan in the amount of € 1.7 million (2019: € 1.7 million).
Property under construction at 31 December 2020 represents € 1.2 million for Accell Hunland (building and machinery), € 0.9 million for Accell Germany (showroom) and € 0.2 million for Wiener Bike Parts (building). Those assets are not yet ready for use.
Accounting estimates and judgement
Estimates are required to determine the (remaining) useful lives of fixed assets. Useful lives are determined based on an asset’s age, the frequency of its use, repair and maintenance policy, technological changes in production and expected restructurings.
The expected residual value is estimated per asset item and is the higher of the expected sales prices or the scrap value. The residual value is estimated based on recent market transactions involving the sale of similar items or on its material scrap value.
Depreciation is charged to profit or loss on a straight-line basis over the estimated useful lives as Accell Group believes that straight-line depreciation most closely reflects the expected consumption pattern of the future economic benefits embodied in the asset.
Items of property, plant and equipment are measured at cost less accumulated depreciation and any accumulated impairment losses. Any gain or loss on the disposal of an item of property, plant and equipment is recognised in profit or loss (depreciation). Depreciation is calculated to write off the cost of items of property, plant and equipment less their estimated residual values using the straight-line method over their estimated useful lives, and is generally recognised in profit or loss. Land is not depreciated. Depreciation methods, useful lives and residual values are reviewed at each reporting date and adjusted prospectively if appropriate.
The estimated useful lives of property, plant and equipment are as follows:
|Machinery and equipment||3 - 12 years|
Property, plant and equipment is derecognised when it is sold or scrapped. Gains on sales are presented in other income (see note 4.7.2) and losses on sales are included in depreciation (see note 4.7.5)