the effective portion of forward foreign exchange
contracts hedging the imported goods is
recognised in the Consolidated Income Statement
within ‘infrastructure maintenance’. However,
when the forecast transaction that is hedged
results in the recognition of a non‑financial
asset (for example, inventory or fixed assets) the
gains and losses previously deferred in equity
are transferred from equity and included in the
initial measurement of the cost of the asset. The
deferred amounts are ultimately recognised in
profit or loss as infrastructure maintenance in
the case of goods relating to maintenance, or as
depreciation in the case of fixed assets.
When a hedging instrument expires or is sold
or terminated, or when a hedge no longer
meets the criteria for hedge accounting, any
cumulative gain or loss existing in equity at that
time remains in equity and is recognised when
the forecast transaction is ultimately recognised
in the Consolidated Income Statement. When
a forecast transaction is no longer expected
to occur, the cumulative gain or loss that was
reported in equity is immediately transferred to
the Consolidated Income Statement.
(o) Property, plant and equipment
Infrastructure assets are shown at fair value less
accumulated depreciation and any accumulated
impairment losses recognised after the date of
the revaluation, based on periodic, but at least
triennial valuations. Any accumulated depreciation
at the date of revaluation is eliminated against
the gross carrying amount of the asset and the
net amount is restated to the revalued amount of
the asset. All other property, plant and equipment
are stated at historical cost less accumulated
depreciation, and any accumulated impairment
losses. Historical cost includes expenditure that is
directly attributable to the acquisition of the items.
Subsequent costs are included in the asset’s
carrying amount or recognised as a separate
asset, as appropriate, only when it is probable
that future economic benefits associated with
the item will flow to the Group and the cost of the
item can be measured reliably. All other repairs
and maintenance are charged to the Consolidated
Income Statement during the financial period in
which they are incurred.
Land is not depreciated. Depreciation on other
assets is calculated using the straight line method
to allocate their cost or revalued amounts, net of
their residual values, over their estimated useful
lives, as follows:
Maximum Economic Useful Life *
Infrastructure assets
••
Ballast . . . . . . . . . . . . . 60 years
••
Bridges . . . . . . . . . . . . . 40 years
••
Culverts . . . . . . . . . . . . 100 years
••
Rail . . . . . . . . . . . . . . .110 years
••
Sleepers . . . . . . . . . . . . .70 years
••
Signals & Communications . . . . 30 years
••
Turnouts . . . . . . . . . . . . . 15 years
••
Tunnels . . . . . . . . . . . . . 50 years
Non Infrastructure assets
••
Buildings . . . . . . . . . . . . 50 years
••
IT & Other equipment . . . . . . . 4 years
••
Motor vehicles . . . . . . . . . . . 5 years
••
Other equipment . . . . . . . . 40 years
* Depending on the age and location of particular
assets, the economic life may vary.
(i) Impairment
The carrying values of plant and equipment are
reviewed for impairment at each reporting date,
with the recoverable amount being estimated
when events or changes in circumstances indicate
that the carrying value may be impaired.
The recoverable amount of plant and equipment is
the higher of fair value less costs to sell and value
in use. In assessing value in use, the estimated
future cash flows are discounted to their present
value using a pre‑tax discount rate that reflects
current market assessments of the time value of
money and the risks specific to the asset.
For an asset that does not generate largely
independent cash inflows, recoverable amount is
determined for the cash generating unit to which
Note 01
Summary of significant accounting policies (continued)
65
