G14 Property, plant and equipment

 

Land and buildings

Plant and machinery

Rental fleet

Equipment, tools, fixtures and fittings

Construction in progress

Total

Cost

 

 

 

 

 

 

At January 1, 2021

17,093

39,652

1,979

6,520

2,458

67,702

Additions

204

512

941

238

1,982

3,877

Business combinations

485

1,009

0

133

96

1,724

Divestments and disposals

–729

–1,466

–647

–360

–71

–3,273

Reclassifications

65

965

–120

305

–1,778

–562

Translation differences for the year

610

1,297

136

192

98

2,333

At December 31, 2021

17,728

41,968

2,288

7,029

2,787

71,801

 

 

 

 

 

 

 

Accumulated depreciations and impairment losses

At January 1, 2021

8,616

29,221

996

4,894

0

43,727

Divestments and disposals

–550

–1,314

–412

–341

–2,617

Impairment losses

0

18

0

0

18

Reversal of impairment losses

–6

–126

0

–1

–133

Reclassifications

–84

–91

–69

9

–234

Depreciation for the year

519

1,943

562

441

3,464

Translation differences for the year

300

971

78

148

1,499

At December 31, 2021

8,796

30,623

1,155

5,150

0

45,724

 

 

 

 

 

 

 

Net carrying amount

At December 31, 2021

8,932

11,345

1,133

1,879

2,787

26,076

 

 

 

 

 

 

 

Cost

 

 

 

 

 

 

At January 1, 2022

17,728

41,968

2,288

7,029

2,787

71,801

Discontinued operations

–5,437

–13,846

0

–1,386

–642

–21,311

Additions

164

585

947

373

2,166

4,235

Business combinations

219

571

0

152

51

993

Divestments and disposals

–200

–1,108

–619

–593

–96

–2,617

Reclassifications

347

715

–229

268

–1,410

–309

Translation differences for the year

907

1,829

234

401

162

3,533

At December 31, 2022

13,727

30,715

2,621

6,243

3,017

56,325

 

 

 

 

 

 

 

Accumulated depreciations and impairment losses

 

 

 

 

 

 

At January 1, 2022

8,796

30,623

1,155

5,150

0

45,724

Discontinued operations

–2,928

–10,170

0

–963

0

–14,061

Divestments and disposals

–155

–1,044

–449

–565

 

–2,214

Impairment losses

4

21

1

20

39

86

Reversal of impairment losses

–0

–1

0

–0

 

–1

Reclassifications

12

–91

–51

44

 

–86

Depreciation for the year

435

1,672

510

452

 

3,069

Translation differences for the year

439

1,267

128

290

 

2,124

At December 31, 2022

6,604

22,277

1,294

4,428

39

34,642

 

 

 

 

 

 

 

Net carrying amount

 

 

 

 

 

 

At December 31, 2022

7,123

8,438

1,327

1,816

2,978

21,683

Impairment losses/reversal of impairment losses per line in the income statement

 

20211)

2022

Cost of sales expenses

29

–21

Research & development expenses

1

0

Other operating expenses

0

–65

Total

30

–85

1)

The income statement for 2021 has been reclassified since SMT was classified as discontinued operations in 2022. Consequently the figures for the Balance sheet and Income statement will not reconcile for 2021.

Impairment tests

Property, plant and equipment with a definite useful life were tested for impairment when an indication for impairment was identified. The tests resulted in impairment loss amounting to SEK –85 million (gain 30).

Additional information

Items of property, plant and equipment totaling SEK 240 million (230) have been pledged as security for liabilities. In 2022, contractual commitments for the acquisition of property, plant and equipment amounted to SEK 378 million (409).

Accounting principles

Owned assets

Property, plant and equipment are recognized at cost less accumulated depreciation and any impairment losses.

Rental fleet

The fleet is balanced between underground drills, loaders and trucks followed by surface drills. The largest fleets are based in Northern Europe, Canada, US and Australia.

Depreciation of property, plant and equipment

Property, plant and equipment are depreciated over their estimated useful lives. Land is not depreciated. Depreciation is recognized on a straight-line basis (unless otherwise described) based on the cost of the assets, adjusted by residual value when applicable, and estimated useful lives. The following depreciation periods are applied:

Land and buildings:

  • Land indefinite useful life
  • Buildings 10–50 years
  • Site improvements 20 years

Plant and machinery:

  • Plant and machinery 5–15 years
  • Rental assets 3 years

Equipment, tools, fixtures and fittings:

  • Depreciated over the estimated useful lives
  • Computer equipment is depreciated over 3–5 years using the reducing balance method

If an item of property, plant and equipment comprises components with different useful lives, each such significant component is depreciated separately. Depreciation methods and estimated residual values and useful lives are reviewed at each year-end.

Impairment and reversals of impairment

Impairment and reversals of impairment are applicable also for property, plant and equipment. For details, see section in note G13.

Borrowing costs

For definition of borrowing costs see section in intangible assets, note G13. The capitalization of borrowing costs relating to tangibles is mainly relevant for the construction of production buildings on a proprietary basis.

Critical estimates and key judgments

Impairment tests of non-current assets

Sandvik’s tangible assets are stated at cost less accumulated depreciation and any impairment losses. The assets are depreciated over their estimated useful lives to their estimated residual values. Both the estimated useful life and the residual value are reviewed at least at each financial year-end.

The carrying amount of the Group’s non-current assets is tested for impairment whenever events or changes in circumstances indicate that the carrying amount will not be recovered. The rental fleets of Sandvik Mining and Rock Solutions are subject to special examination considering their dependence on the business climate in the mining and oil industry and the risk that rental agreements may be cancelled. The carrying amount of the rental fleets at the end of 2022 was SEK 1,327 million (1,133).

A call for an impairment test also arises when a non-current asset is classified as being held for sale, at which time it must be remeasured at the lower of its carrying amount and fair value less costs to sell.