TABLE OF CONTENTS With the exception of a change in name from tangible fixed assets to tangible non-current assets the fundamentals of accounting for these assets is the same - the devil is in the detail.
Both UK GAAP and its international counterpart require tangible assets, with the exception of land, to be depreciated on a systematic basis. Straight-line depreciation remains the most common approach, but accelerated depreciation methodologies are also employed.
Property, Plant and Equipment
Property, plant and equipment is stated at cost less accumulated depreciation. Cost includes expenditure that is directly attributable to the acquisition of the items. Depreciation of tangible fixed assets is provided where it is necessary to reflect a reduction from book value to estimated residual value over the estimated useful life of the asset to the Group.
Depreciation of property, plant and equipment is calculated by the straight-line method and the annual rates applicable to the principal categories are:
Land and buildings
| Freeholds | 2 per cent |
| Long leaseholds | 5 per cent |
| Short leaseholds | over the life of the lease |
Fixtures, fittings and equipment
| Tenant's improvements | shorter of ten years and the remaining life of the lease |
| Fixtures and fittings | between 10 per cent and 15 per cent |
| Computers and electronic equipment | between 20 per cent and 50 per cent |
| Motor cars | 25 per cent |
| Commercial vehicles | ... |
