Back to contents >
3.3 PROPERTY, PLANT AND
EQUIPMENT
Property, plant and equipment (PP&E)
comprises various types of tangible fixed
assets needed for the type of business
conducted by the Group.
A major part of the amount under
Construction in progress relates to the
new production facilities in Qatar and
Egypt, facility upgrades in Norway and
Indonesia and construction of a new
regional headquarter and R&D facility in
Dubai.
See Note 5.4 for further information
related to Right-of-Use assets.
(NOK million) Land Buildings
Electrical
installations
Machinery,
vehicles and
equipment
Construction
in progress
Right-of-
Use assets Total
Cost
Balance as of 1 January 2020 349 3 950 539 4 302 1 400 723 11 263
Additions 2 159 92 247 795 165 1 461
Disposals - -7 -1 -121 -2 -51 -183
Reclassifications -34 620 363 265 -1 133 28 109
Foreign currency translation effect -9 -133 -23 -108 -58 -14 -345
Balance as of 31 December 2020 308 4 588 971 4 584 1 003 852 12 306
Additions 24 282 168 594 192 226 1 486
Disposals -1 -106 -2 -125 - -10 -245
Reclassifications 1 24 -11 47 -63 -1 -3
Foreign currency translation effect -12 -10 -9 -70 28 -12 -85
Balance as of 31 December 2021 319 4 779 1 117 5 030 1 160 1 055 13 459
Depreciation and impairment
Balance as of 1 January 2020 -11 -1 635 -229 -2 768 - -131 -4 774
Depreciation - -151 -64 -357 - -152 -724
Depreciation on disposals - 5 - 113 2 18 138
Impairment - -4 - -2 -15 - -21
Reclassifications 6 -41 -25 -49 - - -109
Foreign currency translation effect - 68 12 76 1 12 169
Balance as of 31 December 2020 -6 -1 760 -305 -2 986 -12 -252 -5 322
Depreciation - -160 -92 -382 - -148 -782
Depreciation on disposals - 97 1 112 - 7 217
Impairment - -11 - - - - -12
Reclassifications - 4 10 -12 - 1 3
Foreign currency translation effect - - 4 30 9 5 48
Balance as of 31 December 2021 -6 -1 830 -382 -3 239 -3 -387 -5 847
Net book value
Balance as of 31 December 2021 313 2 949 735 1 791 1 156 668 7 612
Balance as of 31 December 2020 302 2 829 665 1 598 991 600 6 985
Estimated useful life indefinite 25-33 years 10-14 years 3-10 years
Accounting policy
PP&E are stated at cost less accumulated
depreciation and impairment charges.
Costs include expenditures that are directly
attributable to the purchase of the asset,
including borrowing cost of investment
projects under construction.
PP&E are depreciated over estimated useful life
after deduction of estimated residual value.
Depreciation methods, useful lives and residual
values are reassessed annually. Changes to
the estimated residual value of useful life are
accounted for as a change in estimate.
Costs of major maintenance activities are
capitalised and depreciated over the estimated
useful life. Maintenance costs which cannot be
separately defined as a component of PP&E are
expensed in the period in which they occur.
Estimate and judgement
The Group assesses the carrying value of
intangible assets and PP&E whenever events
or changes in circumstances indicate that
the carrying value of an asset may not be
recoverable.
If the carrying value of an asset exceeds its
estimated recoverable amount, an impairment
loss is recognised in the income statement.
The assessment for impairment is performed
for assets generating largely independent cash
inflows.
The Group reverses impairment losses in the
income statement if and to the extent this is
substantiated by a change in the estimates
used to determine the recoverable amount.
Jotun Group
28 I Jotun Annual Report 2021