IBERSOL | Annual Report 2020

ANNUAL REPORT 2020 2.7 PROPERTY, PLANT AND EQUIPMENT Buildings and other constructions include own properties assigned to restaurant ac- tivities and expenses on works at third-party properties, in particular those required for setting up restaurant shops. Property, plant and equipment are presented at the acquisition cost, net of the re- spective amortisation and accumulated impairment losses. The historic cost includes all expenses attributable directly to the acquisition of goods. Costs with loans incurred and with loans obtained for the construction of property, plant and equipment are recognized as part of the construction cost of the asset. Subsequent costs are added to the amounts for which the good is recorded or rec- ognised as separate assets, as appropriate, only when it is probable that the compa- ny will obtain the underlying economic benefits and the cost may be reliably meas- ured. Other expenses on repairs and maintenance are recognised as an expense in the period in which they are incurred. Depreciation of assets is calculated by the equal annual amounts method in order to allocate its cost at its residual value, according to its estimated useful life, as follows: Buildings and other constructions 10-35 years (*) Equipment: 10 years Tools and utensils: 4 years Vehicles: 5 years Office equipment: 10 years Other property, plant and equipment: 5 years (*) Two buildings owned by the Group have an estimated useful life of up to 50 and 40 years. The amounts which assets may be depreciated, their lifetime and the depreciation method are reviewed and adjusted if necessary on the consolidated statement of financial position date. Changes in lifetime are treated as a change in accounting estimate and are applied prospectively. If the accounted amount is higher than the asset’s recoverable amount, it is immedi- ately readjusted to the estimated recoverable amount (Note 2.9). Gains and losses consequent to a reduction or sale are determined by the difference between receipts from the sale and the asset’s accounted value, and are recognised as other operating income or other operating costs in the profit and loss account. When revaluated goods are sold, the amount included in other reserves is trans- ferred to retained profit. The assets in progress are recorded at acquisition cost less any impairment losses. These assets are amortized as from the moment when the underlying assets are available for use. 321