LensCrafters 2011 Annual Report Download - page 187

| 111 >CONSOLIDATED FINANCIAL STATEMENTS - NOTES
Property, plant and equipment
Property, plant and equipment are measured at historical cost. Historical cost includes
expenditures that are directly attributable to the acquisition of the items. After
initial recognition, property, plant and equipment is carried at cost less accumulated
depreciation and any accumulated impairment loss. The depreciable amount of the
items of property, plant and equipment, measured as the difference between their cost
and their residual value, is allocated on a straight-line basis over their estimated useful
lives as follows:
Estimated useful life
Buildings and buildings
improvements From 19 to 40 years
Machinery and equipment From 3 to 12 years
Aircraft 25 years
Other equipment From 5 to 8 years
Leasehold improvements The lower of 15 years and the residual duration of the lease contract
Depreciation ends on the date on which the asset is classified as held for sale, in compliance
with IFRS 5 – Non-Current Assets Held for Sale and Discontinued Operations.
Subsequent costs are included in the asset’s carrying amount or recognized as a separate
asset, as appropriate, only when it is probable that future economic benefits associated
with the item will flow to the Group and the cost of the item can be measured reliably. The
carrying amount of the replaced part is derecognized. All other repairs and maintenance
costs are charged to the consolidated statement of income during the financial period in
which they are incurred.
Borrowing costs that are directly attributable to the acquisition, construction or production
of a qualifying item of property, plant and equipment are capitalized as part of the cost of
that asset.
Upon disposal or when no future economic benefits are expected from the use of an item
of property, plant and equipment, its carrying amount is derecognized. The gain or loss
arising from derecognition is included in profit and loss.
Assets held for sale
Assets held for sale include non-current assets (or disposal groups) whose carrying amount
will be primarily recovered through a sale transaction rather than through continuing use
and whose sale is highly probable in the short term. Assets held for sale are measured at
the lower of their carrying amount and their fair value, less costs to sell.
Finance and operating leases
Leases in which a significant portion of the risks and rewards of ownership are retained by
the lessor are classified as operating leases. Payments made under operating leases (net