18. Property, Plant and Equipment

Changes in property, plant and equipment in 2015 were as follows:

Changes in Property, Plant and Equipment

 

 

Land and buildings

 

Plant installations and machinery

 

Furniture, fixtures and other equipment

 

Construction in progress and advance payments

 

Total

 

 

€ million

 

€ million

 

€ million

 

€ million

 

€ million

Cost of acquisition or construction, December 31, 2014

 

9,088

 

18,144

 

2,009

 

2,078

 

31,319

Changes in scope of consolidation

 

 

3

 

1

 

 

4

Acquisitions

 

33

 

2

 

1

 

 

36

Capital expenditures

 

230

 

390

 

239

 

1,309

 

2,168

Retirements

 

(167)

 

(429)

 

(185)

 

(58)

 

(839)

Transfers

 

273

 

797

 

56

 

(1,126)

 

Transfers (IFRS 5)

 

1

 

(64)

 

(4)

 

 

(67)

Inflation adjustment (IAS 29)

 

7

 

2

 

1

 

 

10

Exchange differences

 

220

 

573

 

24

 

92

 

909

December 31, 2015

 

9,685

 

19,418

 

2,142

 

2,295

 

33,540

 

 

 

 

 

 

 

 

 

 

 

Accumulated depreciation and impairment losses, December 31, 2014

 

4,940

 

13,426

 

1,482

 

43

 

19,891

Changes in scope of consolidation

 

 

1

 

1

 

 

2

Retirements

 

(101)

 

(397)

 

(156)

 

(72)

 

(726)

Depreciation and impairment losses in 2015

 

317

 

945

 

232

 

38

 

1,532

Depreciation

 

294

 

892

 

230

 

 

1,416

Impairment losses

 

23

 

53

 

2

 

38

 

116

Impairment loss reversals

 

 

(1)

 

 

 

(1)

Transfers

 

 

(1)

 

1

 

 

Transfers (IFRS 5)

 

1

 

(57)

 

(3)

 

 

(59)

Exchange differences

 

98

 

387

 

21

 

20

 

526

December 31, 2015

 

5,255

 

14,303

 

1,578

 

29

 

21,165

Carrying amounts, December 31, 2015

 

4,430

 

5,115

 

564

 

2,266

 

12,375

Carrying amounts, December 31, 2014

 

4,148

 

4,718

 

527

 

2,035

 

11,428

Impairment losses of €115 million, net of a €1 million impairment loss reversal, were recognized on property, plant and equipment in the Covestro segment (€69 million), the Consumer Health segment (€33 million), the CropScience segment (€6 million), the Pharmaceuticals segment (€3 million), and Other Segments (€4 million).

In 2015, borrowing costs of €33 million (2014: €32 million) were capitalized as components of the cost of acquisition or construction of qualifying assets, applying an average interest rate of 2.5% (2014: 3.1%).

Capitalized property, plant and equipment included assets with a total net value of €533 million (2014: €504 million) held under finance leases. The cost of acquisition or construction of these assets as of the closing date totaled €915 million (2014: €827 million). They comprised plant installations and machinery with a carrying amount of €220 million (2014: €233 million), buildings with a carrying amount of €168 million (2014: €132 million) and other property, plant and equipment with a carrying amount of €145 million (2014: €139 million). For information on the liabilities arising from finance leases, see Note [27].

In 2015, rental payments of €263 million (2014: €219 million) were made for assets leased under operating leases as defined in IAS 17 (Leases).

Lease payments of €2 million are expected to be received in 2016 from operating leases – as defined in IAS 17 (Leases) – pertaining to property, plant and equipment, excluding the investment property stated below. Lease payments totaling €7 million are expected to be received in 2017‑2020 and lease payments totaling €1 million after 2020.

Investment property

The fair values of investment property are mainly determined using the income approach based on internal valuations for buildings and developed sites, and using the market comparison approach for undeveloped sites.

The total carrying amount of investment property as of December 31, 2015, was €164 million (December 31, 2014: €175 million). The fair value of this property was €484 million (2014: €501 million). The rental income from investment property was €13 million (2014: €14 million), and the operating expenses directly allocable to this property amounted to €8 million (2014: €9 million). A further amount of €1 million (2014: €2 million) in operating expenses was directly allocable to investment property from which no rental income was derived.

Changes in property, plant and equipment in 2014 were as follows:

Changes in Property, Plant and Equipment (Previous Year)

 

 

Land and buildings

 

Plant installations and machinery

 

Furniture, fixtures and other equipment

 

Construction in progress and advance payments

 

Total

 

 

€ million

 

€ million

 

€ million

 

€ million

 

€ million

Cost of acquisition or construction, December 31, 2013

 

8,375

 

16,556

 

1,853

 

1,671

 

28,455

Changes in scope of consolidation

 

5

 

3

 

 

 

8

Acquisitions

 

74

 

85

 

27

 

49

 

235

Capital expenditures

 

248

 

468

 

216

 

1,135

 

2,067

Retirements

 

(165)

 

(351)

 

(176)

 

(6)

 

(698)

Transfers

 

233

 

611

 

34

 

(878)

 

Transfers (IFRS 5)

 

(11)

 

(6)

 

(5)

 

(1)

 

(23)

Inflation adjustment (IAS 29)

 

5

 

1

 

 

2

 

8

Exchange differences

 

324

 

777

 

60

 

106

 

1,267

December 31, 2014

 

9,088

 

18,144

 

2,009

 

2,078

 

31,319

 

 

 

 

 

 

 

 

 

 

 

Accumulated depreciation and impairment losses, December 31, 2013

 

4,630

 

12,414

 

1,390

 

6

 

18,440

Changes in scope of consolidation

 

4

 

3

 

 

 

7

Retirements

 

(122)

 

(329)

 

(156)

 

(3)

 

(610)

Depreciation and impairment losses in 2014

 

282

 

819

 

205

 

39

 

1,345

Depreciation

 

258

 

786

 

205

 

 

1,249

Impairment losses

 

24

 

33

 

 

39

 

96

Impairment loss reversals

 

 

 

 

 

Transfers

 

1

 

 

(1)

 

 

Transfers (IFRS 5)

 

(1)

 

(3)

 

(2)

 

 

(6)

Exchange differences

 

146

 

522

 

46

 

1

 

715

December 31, 2014

 

4,940

 

13,426

 

1,482

 

43

 

19,891

Carrying amounts, December 31, 2014

 

4,148

 

4,718

 

527

 

2,035

 

11,428

Carrying amounts, December 31, 2013

 

3,745

 

4,142

 

463

 

1,665

 

10,015