Property, Plant and Equipment Accounting Policy
Property, plant and equipment is measured at historical cost less accumulated depreciation and any impairment loss. The cost of self-constructed assets includes costs directly attributable to the construction of the assets. Subsequent cost is 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 Novo Nordisk and the cost of the item can be measured reliably. In general, constructions of major investments are self-financed and thus no material interest on loans (borrowings) is capitalised as part of the cost.
Depreciation is provided under the straight-line method over the estimated useful lives of the assets as follows:
- Buildings: 12 – 50 years
- Plant and machinery: 5 –16 years
- Other equipment: 3 –16 years
- Land: not depreciated
The assets' residual values and useful lives are reviewed and adjusted, if appropriate, at the end of each reporting period. An asset's carrying amount is written down to its recoverable amount if the asset's carrying amount is higher than its estimated recoverable amount.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in the Income statement.
Source: Novo Nordisk A/S, Annual Report
Property, Plant and Equipment Disclosure
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Novo Nordisk A/S, Statement of Financial Position, Property, Plant and Equipment
USD $ in millions, translated from DKK kr
Source: Based on data from Novo Nordisk A/S Annual Reports
| Item |
Description |
The company |
| 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. |
Novo Nordisk A/S's property, plant and equipment, cost increased from 2009 to 2010 and from 2010 to 2011.
|
| Property, plant and equipment, carrying amount |
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. |
Novo Nordisk A/S's property, plant and equipment, carrying amount declined from 2009 to 2010 but then slightly increased from 2010 to 2011.
|
Property, Plant and Equipment Ratios (Summary)
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Novo Nordisk A/S, 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. |
Novo Nordisk A/S'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. |
Novo Nordisk A/S'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. |
Novo Nordisk A/S'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 |
|
Novo Nordisk A/S's estimated remaining life of depreciable property, plant and equipment increased from 2009 to 2010 but then slightly declined 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. |
Novo Nordisk A/S'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. |
Novo Nordisk A/S'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
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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. |
Novo Nordisk A/S'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
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2011 Calculations
| Ratio |
Description |
The company |
| Estimated remaining life |
|
Novo Nordisk A/S's estimated remaining life of depreciable property, plant and equipment increased from 2009 to 2010 but then slightly declined from 2010 to 2011.
|
