10. Property, plant and equipment

The carrying amounts of all assets summarized in property, plant and equipment, are as follows:

in thousand EUR	2020	2019
Land	42 178	56 331
Forest roads	4 280	5 460
Buildings and improvements	4 952	5 764
Machinery and vehicles	3 235	3 702
Furniture and fixtures	286	522
Construction in progress	6 065	4 451
Advanced payments for PPE	604	853
Total carrying amounts	61 600	77 083

The Group uses different valuation methods for its assets. Beside the land in Brazil and Gabon, which is presented at fair value according to the revaluation model of IAS 16 Property, Plant and Equipment, the assets are held at cost.

The forests in Brazil are presented separately as biological assets, according to IAS 41 Agriculture and are further detailed in Note 11; as well as the leased assets, presented separately according to IFRS 16 Leases in Note 21.

a. Land at fair value

The land owned by Precious Woods was valued at cost in the past. Since 2019, Precious Woods applies the revaluation model according to IAS 16 Property, Plant and Equipment for all its land assets. Independent valuators performed in 2019 a revaluation of the land in Brazil and Gabon according to the revaluation model of IAS 16.31. The carrying amount for those assets, if the cost model had been applied, would have been EUR 12.2 million (2019: EUR 13.7 million).

Land revaluation Brazil and Gabon

The revaluations in 2019 were performed by BDO Brazil for the land assets in Brazil and by A.N. Dengue for the land assets in Gabon. These valuators are not related to the Group and have recent experience in location and category of the land being valued. The valuation was based on the market value. The sales comparison approach is used to determine market value. This approach consists of comparing the subject land to similar land sold in the recent past in an open market situation, and adjusting the value for market trends. This results in a market value for the land. For 2020, land prices and their fluctuations were reviewed. No major fluctuations were detected, so no new assessments were made.

The fair value measurement for the land has been categorized as a level 2 fair value based on the inputs to the valuation technique used.

Reconciliation of carrying amount of level 2 land revaluation

in thousand EUR	2020 at Fair Value	2019 at Fair Value
At 1 January	56 331	14 204
Disposals	–	–468
Revaluation adjustment	–	42 669
Currency effects	–14 153	–74
At 31 December	42 178	56 331

Accounting policies

The land value is measured at fair value with any changes in value recognized in other comprehensive income under revaluation surplus.

b. Other assets at cost

Beside the land, all other asset categories in property, plant and equipment are held at cost.

in thousand EUR	Forest roads	Buildings and improve- ments	Machinery and vehicles	Furniture and fixtures	Construction in progress	Advanced payments for PPE	Total PPE at cost
Cost
At 1 January 2019	11 448	20 986	29 683	2 192	1 330	2 578	68 218
Additions	150	874	790	120	3 747	–	5 681
Disposals	–	–910	–1 693	–0	–42	–	–2 645
Reclassifications	–	410	145	28	–583	–	–
Currency effects	–70	–34	–84	–0	–1	–40	–230
At 31 December 2019	11 528	21 326	28 841	2 340	4 451	2 538	71 024

Additions	–	431	695	102	2 766	–	3 994
Disposals¹	–	–8 632	–8 617	–1 358	–43	–	–18 650
Reclassifications	–	366	673	48	–1 087	–	–
Currency effects	–1 277	–633	–1 634	–81	–22	–741	–4 388
At 31 December 2020	10 252	12 858	19 957	1 051	6 065	1 797	51 980

Accumulated depreciation and impairment
At 1 January 2019	5 791	15 457	25 811	1 638	–	1 066	49 763
Charge for the year	323	712	1 024	180	–	–	2 239
Impairment charge	–	–	–	–	–	650	650
Reversal of impairment	–15	–	–	–	–	–	–15
Disposals	–	–586	–1 631	–0	–	–	–2 217
Currency effects	–31	–21	–65	–0	–	–31	–148
At 31 December 2019	6 068	15 562	25 138	1 817	–	1 685	50 272

Charge for the year	529	618	818	150	–	–	2 116
Reversal of impairment	–40	–	–	–	–	–	–40
Disposals¹	–	–7 881	–7 934	–1 133	–	–	–16 948
Currency effects	–586	–393	–1 300	–69	–	–492	–2 841
At 31 December 2020	5 971	7 906	16 722	765	–	1 193	32 558

Carrying amount
At 31 December 2019	5 460	5 764	3 702	522	4 451	853	20 752
At 31 December 2020	4 280	4 952	3 235	286	6 065	604	19 422
¹ Please refer to note 13 for further details about the disposal on PP&E contributed in associate

For certain land acquired by Precious Woods in Brazil, the land title registration is not yet finalized. These transactions are disclosed as advanced payments for property, plant and equipment at historical cost. For advanced payments for land titles with a certain risk of losing the land, an allowance is recorded based on Management’s estimate of the probability of not being able to prove the ownership of the land. Despite the continued efforts to clean the land titles from legal issues, Precious Woods was not able to reclassify in 2020 any advanced payments for property, plant and equipment to land (2019: EUR 0).

Accounting policies

In general, assets in property, plant and equipment are recorded at cost less accumulated depreciation and any impairment in value. Depreciation is applied using the straight-line method over the estimated useful life of the assets as follows:

Permanent forest roads 25 years
Buildings and improvements 3 to 25 years
Machinery and vehicles 4 to 10 years
Furniture and fixtures 5 to 10 years

The assets’ residual values and useful lives and methods of depreciation are reviewed at each financial year-end and adjusted prospectively, if appropriate. Gains and losses on disposals are determined by comparing proceeds with carrying amounts. These are included in the consolidated statement of profit or loss.