D2. Property, plant and equipment

AP Accounting principles

Property, plant and equipment

Property, plant and equipment is measured at cost less accumulated depreciation and any impairment. In cases where an investment in foreign currency has been recognized using hedge accounting, the gain/loss from the hedge is recognized as part of the acquisition cost. In major projects the cost of properties and production facilities include costs for running-in and start-up. Borrowing costs are included in the cost of investments exceeding SEK 250m that take more than 12 months to complete. Expenses for repairs and maintenance are expensed directly in profit or loss.

Depreciation and impairment

Land is not subject to depreciation. Buildings, machinery and equipment are depreciated on a straight-line basis over the expected useful lives of the assets. If, at the balance sheet date, there is an indication that property, plant and equipment has declined in value, impairment testing is carried out.

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Expected useful lives

 

Number of years

Pulp and paper mills

10–25

Converting machines, other machinery

7–18

Tools

3–10

Vehicles

4–5

Buildings

15–50

Energy plants

15–30

Computers

3–5

Office equipment

5–10

Land improvements

10–20

Enlarge table

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Property, plant and equipment

 

Buildings

 

Land and land improvements

 

Machinery and equipment

 

Construction in progress

SEKm

2020

2019

2018

 

2020

2019

2018

 

2020

2019

2018

 

2020

2019

2018

Accumulated costs

23,004

24,855

23,255

 

4,052

4,403

4,276

 

78,399

85,802

80,511

 

5,320

3,716

4,970

Accumulated depreciation

–10,776

–10,986

–10,010

 

–599

–649

–599

 

–48,672

–52,516

–48,983

 

–

–1

–

Accumulated impairment

–283

–258

–271

 

–23

–25

–51

 

–1,401

–1,261

–1,392

 

–2

–1

–33

Total

11,945

13,611

12,974

 

3,430

3,729

3,626

 

28,326

32,025

30,136

 

5,318

3,714

4,937

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Value, January 1

13,611

12,974

12,063

 

3,729

3,626

3,446

 

32,025

30,136

28,328

 

3,714

4,937

4,645

Investments

124

208

102

 

9

34

22

 

1,127

1,808

1,601

 

4,882

3,629

4,950

Sales and disposals

–6

–37

–20

 

–4

–1

–46

 

–57

–89

–90

 

–4

–1

–18

Company acquisitions

28

–

79

 

9

–

71

 

42

–

145

 

–

–

86

Company divestments

–38

–

–

 

–18

–

–

 

–73

–81

–

 

–

–3

–

Reclassifications

235

818

1,134

 

11

–4

87

 

2,551

4,045

3,714

 

–2,844

–5,037

–4,895

Depreciation1)

–802

–841

–793

 

–41

–44

–42

 

–4,444

–4,597

–4,291

 

–

–

–

Impairment

–42

–6

–23

 

–

–2

–30

 

–234

–144

–372

 

–

–

–3

Reversal of impairment

–

70

–

 

–

22

–

 

8

27

–

 

–

–

–

Translation differences

–1,165

425

432

 

–265

98

118

 

–2,619

920

1,101

 

–430

189

172

Value, December 31

11,945

13,611

12,974

 

3,430

3,729

3,626

 

28,326

32,025

30,136

 

5,318

3,714

4,937

1)

Included primarily in Cost of goods sold.

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Total property, plant and equipment

SEKm

2020

2019

2018

Accumulated costs

110,775

118,776

113,012

Accumulated depreciation

–60,047

–64,152

–59,592

Accumulated impairment

–1,709

–1,545

–1,747

Total

49,019

53,079

51,673

 

 

 

 

Value, January 1

53,079

51,673

48,482

Investments

6,142

5,679

6,675

Sales and disposals

–71

–128

–174

Company acquisitions

79

–

381

Company divestments

–129

–84

–

Reclassifications

–47

–178

40

Depreciation1)

–5,287

–5,482

–5,126

Impairment

–276

–152

–428

Reversal of impairment

8

119

–

Translation differences

–4,479

1,632

1,823

Value, December 31

49,019

53,079

51,673

TG2:1 Right-of-use assets, net value

4,612

3,821

–

BS Value, December 31 including right-of-use assets

53,631

56,900

51,673

1)

Included primarily in Cost of goods sold.

Impairment losses for the year totaling SEK 276m are related to restructuring measures mainly in Personal Care and Professional Hygiene in Russia and the USA, as well as ongoing measures in Consumer Tissue, primarily in Vinda.

Reversal of impairments totaling SEK 8m is mainly related to previous impairments at production facilities in Consumer Tissue in Spain and France.

During the period, interest was capitalized in machinery and equipment in an amount of SEK 18m (39; 24) and in construction in progress in an amount of SEK 1m (1; 0). The average interest rate used was 3% (4; 5).

Contract obligations relating to the acquisition of property, plant and equipment amounted to SEK 3,131m (3,836; 3,563) at year end.