2.4 Movements in property, plant, and equipment

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CHF million

Investment properties

Machinery and production equipment

Buildings

Building components

Other equipment

Assets under construction

Land

Assets held under finance leases

Property, plant, and equipment for own use

 

 

 

 

 

 

 

 

 

 

Cost

 

 

 

 

 

 

 

 

 

As of 31 December 2020

194

1’446

606

173

238

80

45

24

2’612

 

 

 

 

 

 

 

 

 

 

Additions

 

26

7

3

9

95

1

2

143

Disposals

–1

–35

–24

–9

–10

 

–2

 

–80

Other changes, reclassifications

 

72

32

22

15

–143

 

 

–2

Translation adjustment

–1

–31

–12

–2

–6

–5

–2

–1

–59

As of 31 December 2019

196

1’414

603

159

230

133

48

23

2’610

 

 

 

 

 

 

 

 

 

 

Additions

 

39

13

3

9

132

 

 

196

Disposals

–19

–33

–3

–1

–7

 

 

 

–44

Changes in scope of consolidation

 

–53

 

–3

–5

 

 

 

–61

Other changes, reclassifications

21

58

42

30

27

–178

 

 

–21

Translation adjustment

–6

–38

–12

–2

–5

–3

–1

–1

–62

As of 31 December 2018

200

1’441

563

132

211

182

49

24

2’602

 

 

 

 

 

 

 

 

 

 

Accumulated depreciation

 

 

 

 

 

 

 

 

 

As of 31 December 2020

–121

–1’004

–307

–84

–176

–1

 

–14

–1’586

 

 

 

 

 

 

 

 

 

 

Additions

–2

–78

–17

–9

–15

 

 

–3

–122

Impairment

 

–4

–1

 

–1

1

 

 

–5

Disposals

 

34

21

8

9

 

 

 

72

Other changes, reclassifications

 

3

 

–1

 

 

 

 

2

Translation adjustment

 

15

3

1

3

 

 

1

23

As of 31 December 2019

–119

–974

–313

–83

–172

–2

 

–12

–1’556

 

 

 

 

 

 

 

 

 

 

Additions

–2

–79

–16

–7

–16

 

 

–3

–121

Impairment

 

–8

–2

 

 

–2

 

 

–12

Disposals

5

32

2

1

6

 

 

 

41

Changes in scope of consolidation

 

39

 

2

3

 

 

 

44

Other changes, reclassifications

–10

15

9

1

–13

 

 

 

12

Translation adjustment

4

26

5

1

3

 

 

1

36

As of 31 December 2018

–116

–999

–311

–81

–155

 

 

–10

–1’556

 

 

 

 

 

 

 

 

 

 

Carrying amount

 

 

 

 

 

 

 

 

 

As of 31 December 2020

73

442

299

89

62

79

45

10

1’026

As of 31 December 2019

77

440

290

76

58

131

48

11

1’054

As of 31 December 2018

84

442

252

51

56

182

49

14

1’046

Additions to property, plant and equipment included investment in equipment in Schaffhausen (Switzerland) in the amount of CHF 11 million, in Zhuozhou (China) in the amount of CHF 4 million and in a new building in El Monte (USA) in the amount of CHF 10 million for GF Piping Systems. Additions for GF Casting Solutions included investment in equipment in Suzhou (China) in the amount of CHF 6 million, the redesign of a plant in Altenmarkt (Austria) in the amount of CHF 7 million as well as ongoing investment into the light metal foundry in Mills River (USA) in the amount of CHF 31 million.

Management assumptions and estimates

The values of non-current assets and intangible assets are reviewed whenever there are indications that their carrying amount may no longer be recoverable, due to changed circumstances or events. If such a situation arises, the recoverable amount is determined. It corresponds to the higher of the discounted value of expected future net cash flows and the expected net selling price. If the recoverable amount is lower than the carrying amount, a corresponding impairment loss is recognized in the income statement. The main assumptions on which these measurements are based include growth rates, margins, and discount rates. The actual future cash flows can differ considerably from discounted projections.

The disposal of buildings includes the sale of a building in the amount of CHF 6 million by GF Machining Solutions in Switzerland, see also note 1.2 (1.2.2 Other operating income).

In the previous year, the movements in the line “Changes in scope of consolidation” result from acquisitions and divestments, explained in more detail in note 4.1 (4.1.2 Acquisitions and divestments).

Land includes CHF 4 million of undeveloped properties (previous year: CHF 4 million).

The overall movements in the line “Other changes, reclassifications” are explained by mold and tooling equipment used at production facilities in China that had to be moved from net working capital to property, plant, and equipment as well as demo machines earmarked for sale reclassified to inventories.

In investment properties, the sale of properties in Schaffhausen (Switzerland) is recorded as a disposal. In the previous year, the sale of properties in Garching (Germany) and in Schaffhausen (Switzerland) was reported. The fair value of investment properties, as determined by internal assessments on the basis of capitalized and current market values, is CHF 98 million (previous year: CHF 112 million).

Impairments amounting to net CHF 5 million (previous year: CHF 12 million) related entirely to the relocation of production from Werdohl (Germany).

Management assumptions and estimates

The values of non-current assets and intangible assets are reviewed whenever there are indications that their carrying amount may no longer be recoverable, due to changed circumstances or events. If such a situation arises, the recoverable amount is determined. It corresponds to the higher of the discounted value of expected future net cash flows and the expected net selling price. If the recoverable amount is lower than the carrying amount, a corresponding impairment loss is recognized in the income statement. The main assumptions on which these measurements are based include growth rates, margins, and discount rates. The actual future cash flows can differ considerably from discounted projections.

Accounting principles

Property, plant, and equipment are stated at cost or manufacturing cost less depreciation and impairment. Financing costs of assets under construction are part of the costs of the asset if material. Assets held under finance lease contracts are capitalized at the lower of the present value of the minimum lease payments and fair value. The related outstanding finance lease obligations are presented as liabilities.

Assets are depreciated on a straight-line basis over their estimated useful lives or lease terms:

When components of larger assets have different useful lives, these are depreciated separately. Useful lives and residual values are reviewed annually on the balance sheet date and adjustments are recognized in the income statement. Any gains or losses on the disposal of items of property, plant, and equipment are recognized in the income statement.

Assets held under the terms of a finance lease are described in note 3.3.

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