CSL Ltd Annual Report 2019

CSL Limited Annual Report 2019 106 Notes to the Financial Statements Note 8: Property, Plant and Equipment 4 The capital work in progress additions are the result of major capacity projects. Land US$m Buildings US$m Leasehold Improvements US$m 2019 2018 2019 2018 2019 2018 Cost 38.8 39.8 687.5 665.2 381.6 326.6 Accumulated depreciation/amortisation – – (197.5) (175.3) (115.7) (95.7) Net carrying amount 38.8 39.8 490.0 489.9 265.9 230.9 Movement Net carrying amount at the start of the year 39.8 37.2 489.9 379.3 230.9 200.4 Transferred from capital work in progress – – 32.7 116.5 58.8 42.9 Business Acquisition – – – 22.8 – – Other Additions 4 0.1 3.4 0.6 0.3 1.7 11.3 Disposals – – (0.1) (0.1) (4.7) (2.1) Transferred to/from intangibles – – – – – – Depreciation/amortisation for the year – – (25.7) (21.8) (24.0) (22.0) Accumulated depreciation/amortisation on disposals – – 0.4 0.0 4.0 1.4 Currency translation differences (1.1) (0.8) (7.8) (7.1) (0.9) (1.0) Net carrying amount at the end of the year 38.8 39.8 490.0 489.9 265.9 230.9 Property, plant and equipment Land, buildings, capital work in progress and plant and equipment assets are recorded at historical cost less, where applicable, depreciation and amortisation. Depreciation is on a straight-line basis over the estimated useful life of the asset. Buildings 5 – 40 years Plant and equipment 3 – 15 years Leasehold improvements 5 – 10 years Assets’ residual values and useful lives are reviewed and adjusted if appropriate at each reporting date. Items of property, plant and equipment are derecognised upon disposal or when no further economic benefits are expected from their use or disposal. Impairment testing for property, plant and equipment occurs if an impairment trigger is identified. No impairment triggers have been identified in the current year. Gains and losses on disposals of items of property, plant and equipment are determined by comparing proceeds with carrying amounts and are included in the statement of comprehensive income when realised. 40% of the Holly Springs facility, acquired with the Novartis Influenza business, is legally owned by the US Government. Full legal title will transfer to CSL on the completion of the Final Closeout Technical Report, expected in the next one to three years. CSL has full control of the asset and 100% of the value of the facility is included in the consolidated financial statements. Assets under Finance Leases Leases of property, plant and equipment where the Group, as lessee, has substantially all the risks and rewards of ownership are classified as finance leases. A finance lease is capitalised at the lease’s inception at the fair value of the leased property or, if lower, the present value of the minimum lease payments. The corresponding rental obligations, net of finance charges, are included in interest bearing liabilities and borrowings. Each lease payment is allocated between the liability and finance cost. The finance cost is charged to the statement of comprehensive income over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period. The property, plant and equipment acquired under a finance lease is depreciated over the shorter of the asset’s useful life and the lease term. Leasehold improvements The cost of improvements to leasehold properties is amortised over the unexpired period of the lease or the estimated useful life of the improvement, whichever is the shorter.