8.10.1
Property, plant and equipment

Changes in property, plant and equipment are as follows:

  Land and buildings Machinery and equipment Under construction Total property, plant and equipment
  € x 1,000 € x 1,000 € x 1,000 € x 1,000
Cost
Balance at 1 January 2018 66,857 86,573 1,272 154,702
Investments 545 3,707 2,005 6,257
Investments as a result of business combinations - 219 - 219
Divestments -34 -60 -35 -129
From / to under construction 185 1,138 -1,323 -
Currency translation differences -84 -203 5 -282
Balance at 1 January 2019 67,469 91,373 1,924 160,767
Investments 749 5,322 3,230 9,301
Divestments -4,107 -213 -27 -4,347
Divestments from discontinuation of business - -3,689 - -3,689
Divestments as a result of outgoing business combinations - -977 - -977
From / to under construction 588 472 -1,060 -
Currency translation differences 110 9 - 119
Balance at 31 December 2019 64,809 92,297 4,067 161,174
 
Accumulated depreciation
Balance at 1 January 2018 23,460 61,868 - 85,328
Depreciation 1,288 7,638 - 8,926
Balance at 1 January 2019 24,748 69,506 - 94,254
Depreciation 1) 1,377 7,548 - 8,925
Divestments -2,619 -55 - -2,674
Divestments from discontinuation of business - -3,112 - -3,112
Divestments as a result of outgoing business combination - -645 - -645
Balance at 31 December 2019 23,506 73,242 - 96,748
 
Carrying amount
Balance at 1 January 2019 42,722 21,867 1,924 66,513
Balance at 31 December 2019 41,304 19,055 4,067 64,426
1) Total depreciation for 2019 includes € 8,695 thousand attributable to continuing operations and € 230 thousand attributable to discontinued operations.

 

Land and buildings with a carrying amount of € 4.7 million per 31 December 2019 (2018: € 4.4 million) have been pledged as security; on the one hand to the trustees of the UK pension fund in the amount of € 3.0 million (2018: € 2.9 million) and on the other hand as security of a bank loan in the amount of € 1.7 million (2018: € 1.6 million).

Property under construction at 31 December 2019 represents € 3.1 million for Wiener Bike Parts (offices) and € 1.0 million for Accell Hunland (employee facilities). Both assets are not yet ready for use.

The divestments relate the sale of a Brasseur building (Belgium), the demolition of a Cycles France Loire building (France), the outgoing business combination of Delta Metal Technology Ltd (production facility, China) and the discontinued operations in North America.

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 pattern of consumption of the future economic benefits embodied in the asset.

Accounting policy

Items of property, plant and equipment are measured at cost less accumulated depreciation and any accumulated impairment losses. Any gain or loss on disposal of an item of property, plant and equipment is recognized 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 recognized 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:

Buildings 40 year        
Machinery and equipment 3 - 12 year        

 

Property, plant and equipment is derecognized when it is sold or scrapped. Gains on sales are presented in other income (see note 6.7.2) and losses on sales are included in depreciation.