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Property, plant and equipment | 12 Months Ended
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Dec. 31, 2019
Property, plant and equipment [abstract] |
Property, plant and equipment | Property, plant and equipment Changes in the Group’s property, plant and equipment in 2019 and 2018 were as follows:
| Farmlands |  | Farmland improvements |  | Buildings and facilities |  | Machinery, equipment, furniture and fittings |  | Bearer plants |  | Others |  | Work in progress |  | Total
At January 1, 2018 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Cost | 110,743 |  |  | 22,399 |  |  | 329,366 |  |  | 696,266 |  |  | 421,855 |  |  | 16,999 |  |  | 29,635 |  |  | 1,627,263 |
Accumulated depreciation | — |  |  | (13,392 | ) |  | (136,522 | ) |  | (450,186 | ) |  | (182,945 | ) |  | (12,841 | ) |  | — |  |  | (795,886 | )
Net book amount | 110,743 |  |  | 9,007 |  |  | 192,844 |  |  | 246,080 |  |  | 238,910 |  |  | 4,158 |  |  | 29,635 |  |  | 831,377 |
At December 31, 2018 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Opening net book amount | 110,743 |  |  | 9,007 |  |  | 192,844 |  |  | 246,080 |  |  | 238,910 |  |  | 4,158 |  |  | 29,635 |  |  | 831,377 |
Adjustment of opening net book amount for the application of IAS 29 | 211,328 |  |  | 11,520 |  |  | 22,563 |  |  | 5,181 |  |  | — |  |  | 1,140 |  |  | 856 |  |  | 252,588 |
Exchange differences | (78,858 | ) |  | (3,310 | ) |  | (34,195 | ) |  | (49,222 | ) |  | (36,504 | ) |  | 1,410 |  |  | (6,408 | ) |  | (207,087 | )
Additions | — |  |  | 97 |  |  | 13,773 |  |  | 50,759 |  |  | 96,365 |  |  | 2,098 |  |  | 61,829 |  |  | 224,921 |
Revaluation surplus | 545,129 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 545,129 |
Reclassification from investment property | 3,313 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 3,313 |
Transfers | — |  |  | 2,012 |  |  | 14,264 |  |  | 18,577 |  |  | — |  |  | 49 |  |  | (34,902 | ) |  | — |
Disposals | — |  |  | — |  |  | (149 | ) |  | (2,144 | ) |  | — |  |  | (85 | ) |  | (67 | ) |  | (2,445 | )
Disposals of subsidiaries | (11,471 | ) |  | — |  |  | (593 | ) |  | (17 | ) |  | (1,667 | ) |  | — |  |  | — |  |  | (13,748 | )
Reclassification to non-income tax credits (*) | — |  |  | — |  |  | (114 | ) |  | (422 | ) |  | — |  |  | — |  |  | (39 | ) |  | (575 | )
Depreciation | — |  |  | (3,002 | ) |  | (19,771 | ) |  | (63,644 | ) |  | (64,148 | ) |  | (2,469 | ) |  | — |  |  | (153,034 | )
Closing net book amount | 780,184 |  |  | 16,324 |  |  | 188,622 |  |  | 205,148 |  |  | 232,956 |  |  | 6,301 |  |  | 50,904 |  |  | 1,480,439 |
| Farmlands |  | Farmland improvements |  | Buildings and facilities |  | Machinery, equipment, furniture and fittings |  | Bearer plants |  | Others |  | Work in progress |  | Total
At December 31, 2018 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Fair value for farmlands / Cost | 780,184 |  |  | 32,718 |  |  | 344,915 |  |  | 718,978 |  |  | 480,049 |  |  | 21,611 |  |  | 50,904 |  |  | 2,429,359 |
Accumulated depreciation | — |  |  | (16,394 | ) |  | (156,293 | ) |  | (513,830 | ) |  | (247,093 | ) |  | (15,310 | ) |  | — |  |  | (948,920 | )
Net book amount | 780,184 |  |  | 16,324 |  |  | 188,622 |  |  | 205,148 |  |  | 232,956 |  |  | 6,301 |  |  | 50,904 |  |  | 1,480,439 |
Year ended December 31, 2019 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Opening net book amount | 780,184 |  |  | 16,324 |  |  | 188,622 |  |  | 205,148 |  |  | 232,956 |  |  | 6,301 |  |  | 50,904 |  |  | 1,480,439 |
Exchange differences | (25,205 | ) |  | (536 | ) |  | (6,846 | ) |  | (8,770 | ) |  | (9,802 | ) |  | (207 | ) |  | (3,170 | ) |  | (54,536 | )
Additions | 1,738 |  |  | 62 |  |  | 38,570 |  |  | 62,320 |  |  | 102,813 |  |  | 2,160 |  |  | 54,488 |  |  | 262,151 |
Revaluation surplus | (42,384 | ) |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (42,384 | )
Acquisition of subsidiaries | 815 |  |  | — |  |  | 24,126 |  |  | 5,280 |  |  | — |  |  | 437 |  |  | — |  |  | 30,658 |
Reclassification from investment property | 4,816 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 4,816 |
Transfers | — |  |  | 12,643 |  |  | 13,614 |  |  | 16,772 |  |  | — |  |  | 35 |  |  | (43,064 | ) |  | — |
Disposals | — |  |  | — |  |  | (81 | ) |  | (3,308 | ) |  | — |  |  | (129 | ) |  | — |  |  | (3,518 | )
Disposals of subsidiaries | (10,379 | ) |  | — |  |  | (571 | ) |  | (22 | ) |  | — |  |  | — |  |  | — |  |  | (10,972 | )
Reclassification to non-income tax credits (*) | — |  |  | — |  |  | — |  |  | (226 | ) |  | — |  |  | — |  |  | — |  |  | (226 | )
Depreciation | — |  |  | (3,213 | ) |  | (24,714 | ) |  | (70,921 | ) |  | (72,447 | ) |  | (1,913 | ) |  | — |  |  | (173,208 | )
Closing net book amount | 709,585 |  |  | 25,280 |  |  | 232,720 |  |  | 206,273 |  |  | 253,520 |  |  | 6,684 |  |  | 59,158 |  |  | 1,493,220 |
At December 31, 2019 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Fair value for farmlands / Cost | 709,585 |  |  | 44,887 |  |  | 413,727 |  |  | 791,024 |  |  | 573,060 |  |  | 23,907 |  |  | 59,158 |  |  | 2,615,348 |
Accumulated depreciation | — |  |  | (19,607 | ) |  | (181,007 | ) |  | (584,751 | ) |  | (319,540 | ) |  | (17,223 | ) |  | — |  |  | (1,122,128 | )
Net book amount | 709,585 |  |  | 25,280 |  |  | 232,720 |  |  | 206,273 |  |  | 253,520 |  |  | 6,684 |  |  | 59,158 |  |  | 1,493,220 |
(*) Brazilian federal tax law allows entities to take a percentage of the total cost of the assets purchased as a tax credit. As of December 31, 2019 and 2018, ICMS (Imposto sobre Circulação de Mercadorias e Prestação de Serviços) tax credits were reclassified to trade and other receivables. Depreciation is calculated using the straight-line method to allocated their cost over the estimated usefull lives. Farmlands are not depreciated.
Farmland improvements | 5-25 years
Buildings and facilities | 20 years
Furniture and fittings | 10 years
Computer equipment | 3-5 years
Machinery and equipment | 4-10 years
Vehicles | 4-5 years
Bearer plants | 6 years - based on productivity
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each statement of financial position date. Farmlands are measured at Fair Value. For all farmlands with a total valuation of US$ 710 million as of December 31, 2019, the valuation was determined using sales Comparison Approach prepared by an independent expert. Sale prices of comparable properties are adjusted considering the specific aspects of each property, the most relevant premise being the price per hectare (Level 3). The Group estimated that, other factors being constant, a 10% reduction on the Sales price for the period ended December 31, 2019 would have reduced the value of the farmlands on US$ 71 million, which would impact, net of its tax effect on the "Revaluation surplus" item in the statement of Changes in Shareholders' Equity. If farmlands were stated on the historical cost basis, the amount as of December 31, 2019 would be US$ 235 million. Depreciation charges are included in “Cost of production of Biological Assets”, “Cost of production of manufactures products”, “General and administrative expenses”, “Selling expenses” and capitalized in “Property, plant and equipment” for the years ended December 31, 2019 and 2018. During the year ended December 31, 2019, borrowing costs of US$ 13,904 (2018:US$ 3,660) were capitalized as components of the cost of acquisition or construction for qualifying assets. Certain of the Group’s assets have been pledged as collateral to secure the Group’s borrowings and other payables. The net book value of the pledged assets amounts to US$ 324,129 as of December 31, 2019 (2018: US$ 265,099).

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