10. Property, plant and equipment

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

in thousand EUR	2022	2021
Land	47 715	42 332
Forest roads	3 875	3 916
Buildings and improvements	5 352	6 765
Machinery and vehicles	7 715	6 858
Furniture and fixtures	314	241
Construction in progress	193	887
Advanced payments for PPE	1 842	887
Total carrying amounts	67 006	61 886

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 2022 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 12.6 million (2021: EUR 12.1 million).

Reconciliation of carrying amount of level 2 land revaluation

in thousand EUR	2022 at Fair Value	2021 at Fair Value
At 1 January	42 332	42 178
Change in fair value	1 298	–
Reclassification from/to advanced payments for PPE	24	–129
Currency effects	4 061	283
At 31 December	47 715	42 332

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 2022 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. The revaluation for the land assets in Brazil led to a slight decrease of the fair value by EUR 1.3 million, whilst the land assets in Gabon increased by EUR 2.6 million. In 2021, land prices and their fluctuations were reviewed, based on the external revaluation from 2019. 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 2021	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 - addition²	–	227	2 357	61	–	–	2 645
Reclassifications¹	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

Additions	143	334	2 024	111	586	953	4 151
Disposals	–	–	–467	–3	–	–	–470
Reclassifications¹	162	468	624	48	–1 302	–24	–24
Currency effects	350	213	760	40	22	207	1 592
At 31 December 2022	11 331	16 376	31 638	1 389	193	3 248	64 175

Accumulated depreciation and impairment
At 1 January 2021	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 - addition²	–	170	2 354	53	–	–	2 577
Reclassifications¹	–	–	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

Charge for the year	503	624	1 515	76	–	–	2 718
Impairment charge	–	1 652	295	17	–	40	2 004
Reversal of impairment	–12	–	–	–	–	–	–12
Disposals	–	–	–391	–3	–	–	–394
Currency effects	205	152	665	33	–	141	1 196
At 31 December 2022	7 456	11 024	23 923	1 075	–	1 406	44 884

Carrying amount
At 31 December 2021	3 916	6 765	6 858	241	887	887	19 554
At 31 December 2022	3 875	5 352	7 715	314	193	1 842	19 291
¹ The reclassifications contain also reclassifications from/to land, and from leasing (Note 21)
² Please refer to note 32 for further details about the investment in a subsidiary

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. Based on the continued efforts to clean the land titles from legal issues, Precious Woods had on the one hand not to reclassify additional land as advanced payments for property, plant and equipment (2021: EUR 0.1 million). On the other hand, advanced payments for property, plant and equipment have been reversed to land in the amount of EUR 23 800 (2021: EUR 0 million).

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.