Property, Plant and Equipment Accounting Policy
Property, plant and equipment are stated in the balance sheets at cost less accumulated depreciation and impairment losses.
The cost of property, plant and equipment comprises the purchase price and any directly attributable costs of bringing the asset to its working location and condition for its intended use. Subsequent expenditure relating to an item of property, plant and equipment that has already been recognized is added to the carrying amount of the asset when it is probable that future economic benefits, in excess of the originally assessed standard of performance of the existing asset, will flow to the enterprise. All other subsequent expenditure is recognized as an expense in the period in which it is incurred.
Gains or losses arising from the retirement or disposal of an item of property, plant and equipment are determined as the difference between the net disposal proceeds and the carrying amount of the item and are recognized in profit or loss on the date of retirement or disposal.
Depreciation is calculated to write off the cost of items of property, plant and equipment, less their estimated residual value, if any, using the straight-line method over their estimated useful lives as follows:
| Buildings |
8 - 30 years |
| Telecommunications transceivers, switching centers, transmission and other network equipment |
5 - 10 years |
| Office equipment, furniture and fixtures and others |
3 - 10 years |
Where parts of an item of property, plant and equipment have different useful lives, the cost of the item is allocated on a reasonable basis between the parts and each part is depreciated separately. Both the useful life of an asset and its residual value, if any, are reviewed annually.
Source: China Mobile Ltd., Annual Report
Property, Plant and Equipment Disclosure
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China Mobile Ltd., Statement of Financial Position, Property, Plant and Equipment
USD $ in millions, translated from CNY ¥
Source: Based on data from China Mobile Ltd. Annual Reports
| Item |
Description |
The company |
| Buildings |
Carrying amount as of the balance sheet date of long-lived, depreciable assets that include building structures held for productive use including any addition, improvement, or renovation to the structure, such as interior masonry, interior flooring, electrical, and plumbing. |
China Mobile Ltd.'s buildings increased from 2009 to 2010 and from 2010 to 2011.
|
| Telecommunication transceivers, switching centers, transmission and other network equipment |
Carrying amount as of the balance sheet date of long-lived, depreciable asset used in production process to produce goods and services. |
China Mobile Ltd.'s telecommunication transceivers, switching centers, transmission and other network equipment increased from 2009 to 2010 and from 2010 to 2011.
|
| Office equipment, furniture and fixtures and others |
Carrying amount at the balance sheet date for long-lived, depreciable asset commonly used in offices and stores. Examples include desks, chairs, and store fixtures. |
China Mobile Ltd.'s office equipment, furniture and fixtures and others increased from 2009 to 2010 but then declined significantly from 2010 to 2011.
|
| Property, plant and equipment, cost |
Carrying amount at the balance sheet date for long-lived physical assets used in the normal conduct of business and not intended for resale. This can include land, physical structures, machinery, vehicles, furniture, computer equipment, construction in progress, and similar items. Amount does not include depreciation. |
China Mobile Ltd.'s property, plant and equipment, cost increased from 2009 to 2010 and from 2010 to 2011.
|
| Property, plant and equipment, net book value |
Tangible assets that are held by an entity for use in the production or supply of goods and services, for rental to others, or for administrative purposes and that are expected to provide economic benefit for more than one year; net of accumulated depreciation. Examples include land, buildings, and production equipment. |
China Mobile Ltd.'s property, plant and equipment, net book value increased from 2009 to 2010 and from 2010 to 2011.
|
Property, Plant and Equipment Ratios (Summary)
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China Mobile Ltd., Property, Plant and Equipment Ratios
| Ratio |
Description |
The company |
| Average age |
As long as straight-line depreciation is used, this is an accurate estimate of asset age as a percentage of depreciable life. The relative age is a useful measure of whether the company's fixed asset base is old or new. Newer assets are likely to be more efficient. |
China Mobile Ltd.'s average age of depreciable property, plant and equipment deteriorated from 2009 to 2010 and from 2010 to 2011.
|
| Estimated total useful life |
Over longer time periods, this ratio is a useful measure of company's depreciation policy and can be used for comparisons with competitors. |
China Mobile Ltd.'s estimated total useful life of depreciable property, plant and equipment increased from 2009 to 2010 but then slightly declined from 2010 to 2011 not reaching 2009 level.
|
| Estimated time elapsed since purchase |
The approximate age in years of a company's fixed assets. Useful for comparison purposes. |
China Mobile Ltd.'s estimated time elapsed since purchase of depreciable property, plant and equipment deteriorated from 2009 to 2010 but then slightly improved from 2010 to 2011.
|
| Estimated remaining life |
|
China Mobile Ltd.'s estimated remaining life of depreciable property, plant and equipment declined from 2009 to 2010 and from 2010 to 2011.
|
Average Age
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2011 Calculations
| Ratio |
Description |
The company |
| Average age |
As long as straight-line depreciation is used, this is an accurate estimate of asset age as a percentage of depreciable life. The relative age is a useful measure of whether the company's fixed asset base is old or new. Newer assets are likely to be more efficient. |
China Mobile Ltd.'s average age of depreciable property, plant and equipment deteriorated from 2009 to 2010 and from 2010 to 2011.
|
Estimated Total Useful Life
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2011 Calculations
| Ratio |
Description |
The company |
| Estimated total useful life |
Over longer time periods, this ratio is a useful measure of company's depreciation policy and can be used for comparisons with competitors. |
China Mobile Ltd.'s estimated total useful life of depreciable property, plant and equipment increased from 2009 to 2010 but then slightly declined from 2010 to 2011 not reaching 2009 level.
|
Estimated Age, Time Elapsed Since Purchase
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2011 Calculations
| Ratio |
Description |
The company |
| Estimated time elapsed since purchase |
The approximate age in years of a company's fixed assets. Useful for comparison purposes. |
China Mobile Ltd.'s estimated time elapsed since purchase of depreciable property, plant and equipment deteriorated from 2009 to 2010 but then slightly improved from 2010 to 2011.
|
Estimated Remaining Life
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2011 Calculations
| Ratio |
Description |
The company |
| Estimated remaining life |
|
China Mobile Ltd.'s estimated remaining life of depreciable property, plant and equipment declined from 2009 to 2010 and from 2010 to 2011.
|
