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ABOUT UNILEVER GOVERNANCE FINANCIAL STATEMENTS SHAREHOLDER INFORMATION
125Unilever Annual Report and Accounts 2012 Financial statements
20 ommtments and contngent labltes
20ommtments and contngent labltes
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards
of ownership. All other leases are classified as operating leases.
Assets held under finance leases are initially recognised at the lower of fair value at the date of commencement of the lease and the
present value of the minimum lease payments. Subsequent to initial recognition, these assets are accounted for in accordance with
the accounting policy relating to that specific asset. The corresponding liability is included in the balance sheet as a finance lease
obligation. Lease payments are apportioned between finance costs in the income statement and reduction of the lease obligation
so as to achieve a constant rate of interest on the remaining balance of the liability.
Lease payments under operating leases are charged to the income statement on a straight-line basis over the term of the lease.
Contingent liabilities are either possible obligations that will probably not require a transfer of economic benefits, or present
obligations that may, but probably will not, require a transfer of economic benefits. It is not appropriate to make provisions for
contingent liabilities, but there isa chance that they will result in an obligation in the future.
Long-term fnance lease commtments
 mllon
Future
mnmum
lease
payments
2012
 mllon
Fnance
cost
2012
 mllon
Present
value
2012
€ million
Future
minimum
lease
payments
2011
€ million
Finance
cost
2011
€ million
Present
value
2011
Buildings(a) 324 142 182 321 139 182
Plant and machinery 26 620 25 322
350 148 202 346 142 204
The commitments fall due as follows:
Within 1 year 28 13 15 28 12 16
Later than 1 year but not later than 5 years 119 63 56 98 51 47
Later than 5 years 203 72 131 220 79 141
350 148 202 346 142 204
(a) All leased land is classified as operating leases.
The table below shows the net book value of property, plant and equipment under a number of finance lease agreements.
 mllon  mllon  mllon
Plant and
Net book value Buldngs equpment Total
Cost 198 155 353
Depreciation (52) (126) (178)
31 December 2012 146 29 175
Cost 201 167 368
Depreciation
31 December 2011
(47)
154
(133) (180)
34 188
The Group has sublet part of the leased properties under finance leases. Future minimum sublease payments of €33 million
(2011: €38 million) are expected to bereceived.
Long-term operatng lease commtments
 mllon
2012
€ million
2011
Land and buildings 1,400 1,199
Plant and machinery 547 429
1,947 1,628