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31. Property, plant and equipment

PZU AR 2020 > Results > Supplementary information and notes > 31. Property, plant and equipment
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31.1 Accounting policy

Property, plant and equipment components are measured at purchase price or production cost less accumulated depreciation and impairment losses. 

All property, plant and equipment components and their important components are depreciated, with the exception of land and property, plant and equipment in construction. Depreciation of an asset begins when it is available for use, i.e. when it is in the location and condition necessary for it to be capable of operating in the intended manner. 

Annual depreciation rates for material assets are presented below:

Asset category Rate
Cooperative ownership rights to apartments, cooperative rights to commercial premises 2.5%
Buildings and structures 1.5% - 10%
Machinery and technical equipment 10% - 40%
Means of transport 14% - 33%
IT equipment 14.3% - 40%
Other non-current assets 7% - 20%

Assets held under a finance lease contract are depreciated over their useful life, provided that there is rational certainty that they would be purchased or ownership transferred. Otherwise, they are depreciated for a period no longer than the term of the lease.

The principles for recognizing impairment losses are the same as those applicable to intangible assets that are described in section 28.1.

As at 31 December 2020, analyzing impairment symptoms, the PZU Group took into account the potential impact of the COVID-19 pandemic on potential impairment losses on property, plant and equipment.  As a result of the analyses, no need has been found to recognize impairment losses on property, plant and equipment.

31.2 Quantitative data

Movement in property, plant and equipment (by type groups) in the year ended 31 December 2020 Plant and machinery Means of transport Property, plant and equipment under construction Real estate Other property, plant and equipment Total property, plant and equipment
Gross value at the beginning of the period 1,227 267 257 3,982 599 6,332
Changes: 232 20 (28) 289 58 571
- purchases and in-house production 86 22 441 21 25 595
- increase in right-of-use assets - 10 - 284 4 298
- change in composition of the group - - - 1 - 1
- sale and liquidation (123) (19) (1) (17) (33) (193)
- decrease in right-of-use assets (termination of agreements, sales) - (4) - (39) - (43)
- transfers to categories held for sale under IFRS 5 - - - - - -
- transfers to/from investment property - - - - - -
- transfers 281 9 (456) 103 63 -
- foreign exchange differences and other (12) 2 (12) (64) (1) (87)
Gross value at the end of the period 1,459 287 229 4,271 657 6,903
Accumulated depreciation at the beginning of the period (677) (88) - (968) (260) (1,993)
Changes: (132) (26) - (388) (46) (592)
- depreciation for the period (201) (20) - (126) (57) (404)
- amortization of right-of-use assets - (14) - (269) (2) (285)
- sale and liquidation 69 8 - 7 16 100
- transfers to categories held for sale under IFRS 5 - - - - - -
- foreign exchange differences and other - - - - (3) (3)
Accumulated amortization at the end of the period (809) (114) - (1,356) (306) (2,585)
Impairment charges at the beginning of the period (9) - - (93) (8) (110)
Changes charged to other operating expenses (6) (1) - (18) (2) (27)
Changes charged to other operating income 2 - - 1 1 4
Other changes - - - 4 (1) 3
Impairment losses at the end of the period (13) (1) - (106) (10) (130)
Net value of property, plant and equipment – at the end of the period 637 172 229 2,809 341 4,188
- including net value of right-of-use assets - 21 - 973 4 998

The value of right-of-use assets is presented in section 50.

Movement in property, plant and equipment (by type groups) in the year ended 31 December 2019 (restated data) Plant and machinery Means of transport Property, plant and equipment under construction Real estate Other property, plant and equipment Total property, plant and equipment
Gross value at the beginning of the period 1,109 226 198 2,780 485 4,798
Posting of right-of-use assets as at the time of application of IFRS 16 76 3 - 1,168 3 1,250
Changes: 42 38 59 34 111 284
- purchases and in-house production 107 37 295 21 18 478
- increase in right-of-use assets - 40 - 168 - 208
- change in composition of the group 4 1 1 33 63 102
- sale and liquidation (84) (55) - (55) (18) (212)
- decrease in right-of-use assets (termination of agreements, sales) (57) - - (78) - (135)
- transfers to categories held for sale under IFRS 5 (25) (1) - (82) (4) (112)
- transfers to/from investment property - - - (3) - (3)
- transfers 102 44 (231) 43 42 -
- foreign exchange differences and other (5) (28) (6) (13) 10 (42)
Gross value at the end of the period 1,227 267 257 3,982 599 6,332
Accumulated depreciation at the beginning of the period (576) (88) - (617) (233) (1,514)
Changes: (101) - - (351) (27) (479)
- depreciation for the period (172) (23) - (139) (45) (379)
- amortization of right-of-use assets (19) (13) - (264) (1) (297)
- sale and liquidation 66 36 - 21 16 139
- transfers to categories held for sale under IFRS 5 24 1 - 30 3 58
- foreign exchange differences and other - (1) - 1 - -
Accumulated amortization at the end of the period (677) (88) - (968) (260) (1,993)
Impairment charges at the beginning of the period (4) - - (85) (11) (100)
Changes charged to other operating expenses (5) - - (5) (1) (11)
Other changes - - - (3) 4 1
Impairment losses at the end of the period (9) - - (93) (8) (110)
Net value of property, plant and equipment – at the end of the period 541 179 257 2,921 331 4,229
- including net value of right-of-use assets - 30 - 994 2 1,026

“Transfers to and from investment property” items include amounts corresponding to those explained in section 32.