Property, Plant and Equipment Accounting Policy
Property, plant and equipment are recorded at cost, including interest cost incurred during the construction of major new facilities. Vale computes depreciation on the straight-line method at annual average rates which take into consideration the useful lives of the assets, as follows: 3.73% for railroads, 1.5% for buildings, 4.23% for installations and 7.73% for other equipment. Expenditures for maintenance and repairs are charged to operating costs and expenses as incurred.
Vale capitalizes the costs of developing major new ore bodies or expanding the capacity of operating mines and amortizes these to operations on the unit-of-production method based on the total probable and proven quantity of ore to be recovered. Exploration costs are expensed. Once the economic viability of mining activities is established, subsequent development costs are capitalized.
Source: Vale S.A., Annual Report
Property, Plant and Equipment Disclosure
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Vale S.A., Statement of Financial Position, Property, Plant and Equipment
Source: Based on data from Vale S.A. Annual Reports
| Item |
Description |
The company |
| Land |
Carrying amount as of the balance sheet date of real estate held for productive use. This excludes land held for sale. |
Vale S.A.'s land increased from 2009 to 2010 and from 2010 to 2011.
|
| 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. |
Vale S.A.'s buildings increased from 2009 to 2010 and from 2010 to 2011.
|
| Equipment |
Carrying amount as of the balance sheet date of long-lived, depreciable asset used in production process to produce goods and services. |
Vale S.A.'s equipment increased from 2009 to 2010 and from 2010 to 2011.
|
| Construction in progress |
Carrying amount at the balance sheet date of long-lived asset under construction that include construction costs to date on capital projects that have not been completed and assets being constructed that are not ready to be placed into service. |
Vale S.A.'s construction in progress increased from 2009 to 2010 and 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. |
Vale S.A.'s property, plant and equipment, cost increased from 2009 to 2010 and from 2010 to 2011.
|
| Property, plant and equipment, net |
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. |
Vale S.A.'s property, plant and equipment, net increased from 2009 to 2010 and from 2010 to 2011.
|
Property, Plant and Equipment Ratios (Summary)
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Vale S.A., 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. |
Vale S.A.'s average age of depreciable property, plant and equipment improved from 2009 to 2010 but then deteriorated significantly 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. |
Vale S.A.'s average age of depreciable property, plant and equipment improved from 2009 to 2010 but then deteriorated significantly from 2010 to 2011.
|
