Notes to the Financial Statements Note 9: Property, Plant and Equipment 7 K ey capital projects during the year included the recombinant protein facility in Lengnau, the Marburg R&D Building, the CSL Melbourne Headquarters and R&D facilities and the Biosecurity Facility in Melbourne. 8 D uring the year ended 30 June 2022, the Group recorded an impairment expense of $13m for assets associated with major capital projects which have been identified as surplus to requirements as a result of the change in project scope for these projects. Land US$m Buildings US$m Leasehold improvements US$m 2022 2021 2022 2021 2022 2021 Cost 35.5 39.5 1,818.9 964.3 597.4 546.0 Accumulated depreciation – – (297.2) (253.4) (181.9) (157.0) Net carrying amount 35.5 39.5 1,521.7 710.9 415.5 389.0 Movement Net carrying amount at the start of the year 39.5 38.7 710.9 561.7 389.0 324.8 Transferred from capital work in progress/intangible assets – – 879.1 157.2 56.7 79.8 Additions7 – 0.4 2.4 0.5 0.7 2.8 Disposals (3.5) – (1.5) – (0.3) (0.1) Depreciation for the year – – (50.8) (29.2) (26.9) (20.7) Impairment for the year8 – – – – – – Currency translation differences (0.5) 0.4 (18.4) 20.7 (3.7) 2.4 Net carrying amount at the end of the year 35.5 39.5 1,521.7 710.9 415.5 389.0 Property, plant and equipment Land, buildings, capital work in progress and plant and equipment assets are recorded at historical cost less, where applicable, depreciation. Right-of-use assets are measured at cost, less accumulated depreciation, impairment losses, and adjusted for any remeasurement of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities and restoration obligations recognised less any lease incentives received and initial direct costs. Depreciation is recognised on a systematic basis over the estimated useful life of the asset, generally on a straight-line basis. Buildings 5 – 40 years Plant and equipment 3 – 30 years Leasehold improvements 5 – 25 years Right-of-use assets – Plasma centres 5 – 40 years – Office and warehouses 1 – 39 years – Land 40 – 101 years The unit-of-production depreciation method, based on the expected use or output as the asset is being used, may be applied during the early stages of operation of manufacturing facilities, as a substantial period of time may be required to ramp up the production and operate at intended capacity. This method is to be applied consistently from period to period unless there is a change in the expected pattern of consumption of those future economic benefits. 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 will be performed if an impairment trigger is identified. 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, was legally owned by the US Government prior to 1 July 2021. CSL has full control of the asset and 100% of the value of the facility is included in the consolidated financial statements. During the year ended 30 June 2022, full legal title transferred to CSL following the completion of the Final Closeout Technical Report. 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. CSL Limited Annual Report 2021/22 116
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