RBS 2011 Annual Report Download - page 376

374 RBS Group 2011
18 Property, plant and equipment continued
Investment
properties
Freehold
premises
Long
leasehold
premises
Short
leasehold
premises
Computers
and other
equipment
Operating
lease
assets Total
2009 £m £m £m £m £m £m £m
Cost or valuation
At 1 January 3,868 4,032 224 1,867 4,168 9,334 23,493
Transfers to disposal groups —(32) — (62) (80) — (174)
Currency translation and other adjustments (85) (134) — (65) (131) (561) (976)
Disposal of subsidiaries —(15) — — (19) — (34)
Reclassifications 118 1 (34) 14 — —
Additions 1,634 304 8 153 750 2,241 5,090
Expenditure on investment properties 8 — — — — — 8
Change in fair value of investment properties (117) — — — — — (117)
Disposals and write-off of fully depreciated assets (426) (75) (19) (56) (420) (1,456) (2,452)
At 31 December 4,883 4,098 214 1,803 4,282 9,558 24,838
Accumulated impairment, depreciation and amortisation
At 1 January —422 79 492 1,916 1,635 4,544
Transfers to disposal groups — — — (7) (31) — (38)
Currency translation and other adjustments —(1) — (11) (48) (69) (129)
Disposal of subsidiaries —(1) — — (14) — (15)
Write down of property, plant and equipment — 5 — 5 — — 10
Disposals and write-off of fully depreciated assets — — — (2) (126) (419) (547)
Charge for the year - continuing operations —92 8 142 621 564 1,427
Charge for the year - discontinued operations —36 — 22 78 53 189
At 31 December —553 87 641 2,396 1,764 5,441
Net book value at 31 December 4,883 3,545 127 1,162 1,886 7,794 19,397
Investment properties are valued to reflect fair value, that is, the market
value of the Group's interest at the reporting date excluding any special
terms or circumstances relating to the use or financing of the property
and transaction costs that would be incurred in making a sale. Observed
market data such as rental yield, replacement cost and useful life, reflect
relatively few transactions involving property that is not necessarily
identical to property owned by the Group.
Valuations are carried out by qualified surveyors who are members of the
Royal Institution of Chartered Surveyors, or an equivalent overseas body.
The valuation as at 31 December 2011 for a significant majority of the
Group's investment properties was undertaken with the support of
external valuers.
The fair value of investment properties includes £146 million of
depreciation since purchase (2010 - £248 million depreciation; 2009 - £84
million appreciation).
Rental income from investment properties was £270 million (2010 - £279
million; 2009 - £233 million). Direct operating expenses of investment
properties were £67 million (2010 - £42 million; 2009 - £16 million).
Property, plant and equipment, excluding investment properties, include
£186 million (2010 - £298 million; 2009 - £213 million) assets in the
course of construction.
There were no sales of freehold and long leasehold properties subject to
operating leases during 2011 (2010 - net book value of £2 million; 2009 -
net book value of £5 million).
Notes on the consolidated accounts continued