10. PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment is measured at cost including eligible borrowing costs less depreciation and accumulated impairment losses.

Depreciation is provided on a straight-line basis over the expected average useful lives of the assets. Residual values are reviewed at least annually. Estimated useful lives by major class of assets are as follows:


• Freehold buildings (no depreciation on freehold land)		40 years
• Leasehold land and buildings		40 years (or life of lease if less)
• Plant and equipment		2–20 years

Property, plant and equipment is subject to review for impairment if triggering events or circumstances indicate that this is necessary. If an indication of impairment exists, the asset’s or cash generating unit’s recoverable amount is estimated and any impairment loss is charged to the income statement as it arises.

€ million

Land and

Plant and

Movements during 2017

buildings

equipment

Total

Cost

1 January 2017

4,745

16,462

21,207

Acquisitions of group companies

Disposals of group companies

(16

)

(78

)

(94

)

Additions

314

1,218

1,532

Disposals

(19

)

(440

)

(459

)

Currency retranslation

(384

)

(1,283

)

(1,667

)

Reclassification as held for sale^(a)

(191

)

(972

)

(1,163

)

31 December 2017

4,462

14,936

19,398

Accumulated depreciation

1 January 2017

(1,483

)

(8,051

)

(9,534

)

Disposals of group companies

Depreciation charge for the year

(142

)

(1,031

)

(1,173

)

Disposals

400

414

Currency retranslation

100

543

643

Reclassification as held for sale

552

633

31 December 2017

(1,429

)

(7,558

)

(8,987

)

Net book value 31 December 2017^(b)

3,033

7,378

10,411

Includes payments on account and assets in course of construction

972

1,065

^(a)	Includes €548 million in property plant and equipment related to the Spreads business. Refer to note 22 for further details.

^(b)	Includes €247 million (2016: €249 million) of freehold land.

The Group has commitments to purchase property, plant and equipment of €323 million (2016: €478 million).


	€ million			€ million			€ million
	Land and			Plant and
Movements during 2016	buildings			equipment			Total
Cost
1 January 2016		4,551			15,366			19,917
Acquisitions of group companies		-			13			13
Disposals of group companies		(1	)		(11	)		(12	)
Additions		358			1,553			1,911
Disposals		(84	)		(521	)		(605	)
Currency retranslation		23			64			87
Reclassification as held for sale		(102	)		(2	)		(104	)
31 December 2016		4,745			16,462			21,207

Accumulated depreciation
1 January 2016		(1,443	)		(7,416	)		(8,859	)
Disposals of group companies		1			7			8
Depreciation charge for the year		(149	)		(1,005	)		(1,154	)
Disposals		56			332			388
Currency retranslation		5			(15	)		(10	)
Reclassification as held for sale		47			46			93
31 December 2016		(1,483	)		(8,051	)		(9,534	)
Net book value 31 December 2016		3,262			8,411			11,673
Includes payments on account and assets in course of construction		189			1,236			1,425