Menu

10. Property, plant and equipment

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

in thousand EUR   2021   2020
Land   42 332   42 178
Forest roads   3 916   4 280
Buildings and improvements   6 765   4 952
Machinery and vehicles   6 858   3 235
Furniture and fixtures   241   286
Construction in progress   887   6 065
Advanced payments for PPE   887   604
Total carrying amounts   61 885   61 600

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

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 12.1 million (2020: EUR 12.2 million).

Reconciliation of carrying amount of level 2 land revaluation
in thousand EUR   2021
at Fair Value
  2020
at Fair Value
At 1 January   42 178   56 331
Reclassification to advanced payments for PPE   –129  
Currency effects   283   –14 153
At 31 December   42 332   42 178
Accounting policies

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

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 2021, 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.

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 2020   11 528   21 326   28 841   2 340   4 451   2 538   71 024
Additions     431   695   102   2 766     3 994
Disposals 1     –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
 
Additions     136   672   59   568   169   1 604
Disposals       –31   –1       –32
Change in consolidation scope - addition 2     227   2 357   61       2 645
Reclassifications 3   399   2 124   5 684   14   –5 747   129   2 603
Currency effects   25   16   58   9   1   17   126
At 31 December 2021   10 676   15 361   28 697   1 193   887   2 112   58 926
 
Accumulated depreciation and impairment
At 1 January 2020   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
Disposals 1     –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
 
Charge for the year   784   509   1 107   125       2 525
Impairment charge             22   22
Reversal of impairment   –10             –10
Disposals       –31         –31
Change in consolidation scope - addition 2     170   2 354   53       2 577
Reclassifications 3       1 637         1 637
Currency effects   15   11   50   8     10   94
At 31 December 2021   6 760   8 596   21 839   952     1 225   39 372
 
Carrying amount
At 31 December 2020   4 280   4 952   3 235   286   6 065   604   19 422
At 31 December 2021   3 916   6 765   6 858   241   887   887   19 554
1 Please refer to note 13 for further details about the disposal on PP&E contributed in an associate
2 Please refer to note 32 for further details about the investment in a subsidiary
3 The reclassifications contain also reclassifications from/to land, and from leasing (Note 21)

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 had on the one hand to reclassify additional land of EUR 0.1 million (2020: EUR 0) as advanced payments for property, plant and equipment as new information on potential claims became available. On the other hand, it was not possible in 2021 to reverse any advanced payments for property, plant and equipment to land (2020: 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.