Nokia Corp. (NOK) | Property, Plant and Equipment

Property, Plant and Equipment Accounting Policy

Property, plant and equipment are stated at cost less accumulated depreciation. Depreciation is recorded on a straight-line basis over the expected useful lives of the assets as follows:

Buildings and constructions	20 – 33 years
Production machinery, measuring and test equipment	1 – 5 years
Other machinery and equipment	3 – 10 years

Land and water areas are not depreciated.

Maintenance, repairs and renewals are generally charged to expense during the financial period in which they are incurred. However, major renovations are capitalized and included in 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 Nokia. Major renovations are depreciated over the remaining useful life of the related asset. Leasehold improvements are depreciated over the shorter of the lease term or useful life.

Gains and losses on the disposal of fixed assets are included in operating profit/loss.

Source: Nokia Corp., Annual Report

Property, Plant and Equipment Disclosure

Nokia Corp., Statement of Financial Position, Property, Plant and Equipment

USD $ in millions, translated from EUR €

	Dec 31, 2011	Dec 31, 2010	Dec 31, 2009	Dec 31, 2008	Dec 31, 2007
Land and water areas	80	76	85	84	107
Buildings and constructions	1,790	1,876	1,880	1,773	1,472
Machinery and equipment	5,291	5,313	5,710	5,823	5,859
Other tangible assets	74	74	67	42	29
Advance payments and fixed assets under construction	97	130	64	146	225
Property, plant and equipment, accumulated acquisition cost	7,333	7,469	7,807	7,867	7,691
Accumulated depreciation	(4,943)	(4,877)	(5,131)	(4,958)	(4,899)
Property, plant and equipment, net book value	2,390	2,593	2,676	2,909	2,792

Source: Based on data from Nokia Corp. Annual Reports

Item	Description	The company
Land and water areas	Carrying amount as of the balance sheet date of real estate held for productive use. This excludes land held for sale.	Nokia Corp.'s land and water areas declined from 2009 to 2010 but then increased from 2010 to 2011 not reaching 2009 level.
Buildings and constructions	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.	Nokia Corp.'s buildings and constructions declined from 2009 to 2010 and from 2010 to 2011.
Machinery and equipment	Carrying amount as of the balance sheet date of long-lived, depreciable asset used in production process to produce goods and services.	Nokia Corp.'s machinery and equipment declined from 2009 to 2010 and from 2010 to 2011.
Property, plant and equipment, accumulated acquisition 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.	Nokia Corp.'s property, plant and equipment, accumulated acquisition cost declined 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.	Nokia Corp.'s property, plant and equipment, net book value declined from 2009 to 2010 and from 2010 to 2011.

Property, Plant and Equipment Ratios (Summary)

Nokia Corp., Property, Plant and Equipment Ratios

	Dec 31, 2011	Dec 31, 2010	Dec 31, 2009	Dec 31, 2008	Dec 31, 2007
Average age	68.16%	65.95%	66.44%	63.70%	64.59%
Estimated total useful life (years)	10	9	9	8	9
Estimated age, time elapsed since purchase (years)	7	6	6	5	6
Estimated remaining life (years)	3	3	3	3	3

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.	Nokia Corp.'s average age of depreciable property, plant and equipment improved from 2009 to 2010 but then deteriorated significantly 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.	Nokia Corp.'s estimated total useful life of depreciable property, plant and equipment increased from 2009 to 2010 and from 2010 to 2011.
Estimated time elapsed since purchase	The approximate age in years of a company's fixed assets. Useful for comparison purposes.	Nokia Corp.'s estimated time elapsed since purchase of depreciable property, plant and equipment deteriorated from 2009 to 2010 and from 2010 to 2011.
Estimated remaining life		Nokia Corp.'s estimated remaining life of depreciable property, plant and equipment increased from 2009 to 2010 and from 2010 to 2011.

Average Age

	Dec 31, 2011	Dec 31, 2010	Dec 31, 2009	Dec 31, 2008	Dec 31, 2007
Selected Financial Data (USD $ in millions, translated from EUR €)
Accumulated depreciation	4,943	4,877	5,131	4,958	4,899
Property, plant and equipment, accumulated acquisition cost	7,333	7,469	7,807	7,867	7,691
Land and water areas	80	76	85	84	107
Ratio
Average age¹	68.16%	65.95%	66.44%	63.70%	64.59%

2011 Calculations

¹ Average age = 100 × Accumulated depreciation ÷ (Property, plant and equipment, accumulated acquisition cost – Land and water areas)
= 100 × 4,943 ÷ (7,333 – 80) = 68.16%

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.	Nokia Corp.'s average age of depreciable property, plant and equipment improved from 2009 to 2010 but then deteriorated significantly from 2010 to 2011.

Estimated Total Useful Life

	Dec 31, 2011	Dec 31, 2010	Dec 31, 2009	Dec 31, 2008	Dec 31, 2007
Selected Financial Data (USD $ in millions, translated from EUR €)
Property, plant and equipment, accumulated acquisition cost	7,333	7,469	7,807	7,867	7,691
Land and water areas	80	76	85	84	107
Depreciation for the period	720	795	864	1,004	846
Ratio
Estimated total useful life (years)¹	10	9	9	8	9

2011 Calculations

¹ Estimated total useful life (years) = (Property, plant and equipment, accumulated acquisition cost – Land and water areas) ÷ Depreciation for the period
= (7,333 – 80) ÷ 720 = 10

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.	Nokia Corp.'s estimated total useful life of depreciable property, plant and equipment increased from 2009 to 2010 and from 2010 to 2011.

Estimated Age, Time Elapsed Since Purchase

	Dec 31, 2011	Dec 31, 2010	Dec 31, 2009	Dec 31, 2008	Dec 31, 2007
Selected Financial Data (USD $ in millions, translated from EUR €)
Accumulated depreciation	4,943	4,877	5,131	4,958	4,899
Depreciation for the period	720	795	864	1,004	846
Ratio
Time elapsed since purchase (years)¹	7	6	6	5	6

2011 Calculations

¹ Time elapsed since purchase (years) = Accumulated depreciation ÷ Depreciation for the period
= 4,943 ÷ 720 = 7

Ratio	Description	The company
Estimated time elapsed since purchase	The approximate age in years of a company's fixed assets. Useful for comparison purposes.	Nokia Corp.'s estimated time elapsed since purchase of depreciable property, plant and equipment deteriorated from 2009 to 2010 and from 2010 to 2011.

Estimated Remaining Life

	Dec 31, 2011	Dec 31, 2010	Dec 31, 2009	Dec 31, 2008	Dec 31, 2007
Selected Financial Data (USD $ in millions, translated from EUR €)
Property, plant and equipment, net book value	2,390	2,593	2,676	2,909	2,792
Land and water areas	80	76	85	84	107
Depreciation for the period	720	795	864	1,004	846
Ratio
Estimated remaining life (years)¹	3	3	3	3	3

2011 Calculations

¹ Estimated remaining life (years) = (Property, plant and equipment, net book value – Land and water areas) ÷ Depreciation for the period
= (2,390 – 80) ÷ 720 = 3

Ratio	Description	The company
Estimated remaining life		Nokia Corp.'s estimated remaining life of depreciable property, plant and equipment increased from 2009 to 2010 and from 2010 to 2011.