G14 Property, plant and equipment

(XLSX:) Download

Accumulated depreciations and impairment losses
	Land and buildings	Plant and machinery	Rental fleet	Equipment, tools, fixtures and fittings	Construction in progress	Total
Cost
At January 1, 2021	17,093	39,652	1,979	6,520	2,458	67,702
Additions	204	512	941	238	1,982	3,877
Business combinations	485	1,009	0	133	96	1,724
Divestments and disposals	–729	–1,466	–647	–360	–71	–3,273
Reclassifications	65	965	–120	305	–1,778	–562
Translation differences for the year	610	1,297	136	192	98	2,333
At December 31, 2021	17,728	41,968	2,288	7,029	2,787	71,801

At January 1, 2021	8,616	29,221	996	4,894	0	43,727
Divestments and disposals	–550	–1,314	–412	–341	–	–2,617
Impairment losses	0	18	0	0	–	18
Reversal of impairment losses	–6	–126	0	–1	–	–133
Reclassifications	–84	–91	–69	9	–	–234
Depreciation for the year	519	1,943	562	441	–	3,464
Translation differences for the year	300	971	78	148	–	1,499
At December 31, 2021	8,796	30,623	1,155	5,150	0	45,724

Net carrying amount
At December 31, 2021	8,932	11,345	1,133	1,879	2,787	26,076

Cost
At January 1, 2022	17,728	41,968	2,288	7,029	2,787	71,801
Discontinued operations	–5,437	–13,846	0	–1,386	–642	–21,311
Additions	164	585	947	373	2,166	4,235
Business combinations	219	571	0	152	51	993
Divestments and disposals	–200	–1,108	–619	–593	–96	–2,617
Reclassifications	347	715	–229	268	–1,410	–309
Translation differences for the year	907	1,829	234	401	162	3,533
At December 31, 2022	13,727	30,715	2,621	6,243	3,017	56,325

Accumulated depreciations and impairment losses
At January 1, 2022	8,796	30,623	1,155	5,150	0	45,724
Discontinued operations	–2,928	–10,170	0	–963	0	–14,061
Divestments and disposals	–155	–1,044	–449	–565		–2,214
Impairment losses	4	21	1	20	39	86
Reversal of impairment losses	–0	–1	0	–0		–1
Reclassifications	12	–91	–51	44		–86
Depreciation for the year	435	1,672	510	452		3,069
Translation differences for the year	439	1,267	128	290		2,124
At December 31, 2022	6,604	22,277	1,294	4,428	39	34,642

Net carrying amount
At December 31, 2022	7,123	8,438	1,327	1,816	2,978	21,683

Impairment losses/reversal of impairment losses per line in the income statement

(XLSX:) Download

2021¹⁾

2022

Cost of sales expenses

–21

Research & development expenses

Other operating expenses

–65

Total

–85

1)	The income statement for 2021 has been reclassified since SMT was classified as discontinued operations in 2022. Consequently the figures for the Balance sheet and Income statement will not reconcile for 2021.

Impairment tests

Property, plant and equipment with a definite useful life were tested for impairment when an indication for impairment was identified. The tests resulted in impairment loss amounting to SEK –85 million (gain 30).

Additional information

Items of property, plant and equipment totaling SEK 240 million (230) have been pledged as security for liabilities. In 2022, contractual commitments for the acquisition of property, plant and equipment amounted to SEK 378 million (409).

Accounting principles

Owned assets

Property, plant and equipment are recognized at cost less accumulated depreciation and any impairment losses.

Rental fleet

The fleet is balanced between underground drills, loaders and trucks followed by surface drills. The largest fleets are based in Northern Europe, Canada, US and Australia.

Depreciation of property, plant and equipment

Property, plant and equipment are depreciated over their estimated useful lives. Land is not depreciated. Depreciation is recognized on a straight-line basis (unless otherwise described) based on the cost of the assets, adjusted by residual value when applicable, and estimated useful lives. The following depreciation periods are applied:

Land and buildings:

Land indefinite useful life
Buildings 10–50 years
Site improvements 20 years

Plant and machinery:

Plant and machinery 5–15 years
Rental assets 3 years

Equipment, tools, fixtures and fittings:

Depreciated over the estimated useful lives
Computer equipment is depreciated over 3–5 years using the reducing balance method

If an item of property, plant and equipment comprises components with different useful lives, each such significant component is depreciated separately. Depreciation methods and estimated residual values and useful lives are reviewed at each year-end.

Impairment and reversals of impairment

Impairment and reversals of impairment are applicable also for property, plant and equipment. For details, see section in note G13.

Borrowing costs

For definition of borrowing costs see section in intangible assets, note G13. The capitalization of borrowing costs relating to tangibles is mainly relevant for the construction of production buildings on a proprietary basis.

Critical estimates and key judgments

Impairment tests of non-current assets

Sandvik’s tangible assets are stated at cost less accumulated depreciation and any impairment losses. The assets are depreciated over their estimated useful lives to their estimated residual values. Both the estimated useful life and the residual value are reviewed at least at each financial year-end.

The carrying amount of the Group’s non-current assets is tested for impairment whenever events or changes in circumstances indicate that the carrying amount will not be recovered. The rental fleets of Sandvik Mining and Rock Solutions are subject to special examination considering their dependence on the business climate in the mining and oil industry and the risk that rental agreements may be cancelled. The carrying amount of the rental fleets at the end of 2022 was SEK 1,327 million (1,133).

A call for an impairment test also arises when a non-current asset is classified as being held for sale, at which time it must be remeasured at the lower of its carrying amount and fair value less costs to sell.