Barclays 2015 Annual Report Download - page 299

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23 Property, plant and equipment
Accounting for property, plant and equipment
The Group applies IAS 16 Property, Plant and Equipment and IAS 40 Investment Properties.
Property, plant and equipment is stated at cost, which includes direct and incremental acquisition costs less accumulated depreciation and
provisions for impairment, if required. Subsequent costs are capitalised if these result in an enhancement to the asset.
Depreciation is provided on the depreciable amount of items of property, plant and equipment on a straight-line basis over their estimated useful
economic lives. Depreciation rates, methods and the residual values underlying the calculation of depreciation of items of property, plant and
equipment are kept under review to take account of any change in circumstances. The Group uses the following annual rates in calculating
depreciation:
Annual rates in calculating depreciation Depreciation rate
Freehold land Not depreciated
Freehold buildings and long-leasehold property (more than 50 years to run) 2-3.3%
Leasehold property over the remaining life of the lease (less than 50 years to run) Over the remaining life of the lease
Costs of adaptation of freehold and leasehold property 6-10%
Equipment installed in freehold and leasehold property 6-10%
Computers and similar equipment 17-33%
Fixtures and fittings and other equipment 9-20%
Where leasehold property has a remaining useful life of less than 17 years, costs of adaptation and installed equipment are depreciated over the
remaining life of the lease.
Investment property
The Group initially recognises investment property at cost, and subsequently at fair value at each balance sheet date, reflecting market conditions
at the reporting date. Gains and losses on remeasurement are included in the income statement.
Investment
property
£m
Property
£m
Equipment
£m
Leased
assets
£m
Total
£m
Cost
As at 1 January 2015 207 4,054 4,350 10 8,621
Additions and disposals (71) 22 173 49 173
Change in fair value of investment properties 10 – – – 10
Exchange and other movements (6) (157) (264) 3 (424)
As at 31 December 2015 140 3,919 4,259 62 8,380
Accumulated depreciation and impairment
As at 1 January 2015 – (1,669) (3,157) (9) (4,835)
Depreciation charge – (181) (373) – (554)
Disposals – 144 159 – 303
Exchange and other movements – 9 194 (29) 174
As at 31 December 2015 – (1,697) (3,177) (38) (4,912)
Net book value 140 2,222 1,082 24 3,468
Cost
As at 1 January 2014 451 3,924 4,552 10 8,937
Additions and disposals (160) 174 7 – 21
Change in fair value of investment properties (1) – – – (1)
Exchange and other movements (83) (44) (209) – (336)
As at 31 December 2014 207 4,054 4,350 10 8,621
Accumulated depreciation and impairment
As at 1 January 2014 – (1,513) (3,201) (7) (4,721)
Depreciation charge – (184) (399) (2) (585)
Disposals – 34 271 – 305
Exchange and other movements – (6) 172 – 166
As at 31 December 2014 – (1,669) (3,157) (9) (4,835)
Net book value 207 2,385 1,193 1 3,786
Property rentals of £9m (2014: £5m) and £9m (2014: £14m) have been included in net investment income and other income respectively.
Impairment of £38m (2014: £61m) was charged in the period.
The fair value of investment property is determined by reference to current market prices for similar properties, adjusted as necessary for condition
and location, or by reference to recent transactions updated to reflect current economic conditions. Discounted cash flow techniques may be
employed to calculate fair value where there have been no recent transactions, using current external market inputs such as market rents and
interest rates. Valuations are carried out by management with the support of appropriately qualified independent valuers. Refer to Note 18 Fair value
of assets and liabilities for further details.
Notes to the financial statements
Non-current assets and other investments
The notes included in this section focus on the Group’s non-current tangible and intangible assets and property, plant and equipment, which
provide long-term future economic benefits.
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