Classification criteria

The item includes tangible assets used in operations and those held for investment. The item includes those acquired under financial leasing.

These include all possessed buildings (through ownership or a lease contract) for the purposes of obtaining rent and/or an appreciation of the invested capital.

Buildings of functional use include all buildings owned or leased for company use and which are expected to be used for more than one tax year.

Property, plant and equipment for functional use include:

• land;

• buildings;

• furniture and accessories;

• electronic office machines;

• various machines and equipment;

• vehicles;

• Improvements on third party property/leasehold improvements.

Physical assets held for use in production or in the providing of goods and services or for administrative purpose and that are expected to be used for more than one period.

This item also includes assets used in the role of lessee for lease contracts.

Lease contracts are those that substantially transfer all the risks and rewards deriving from ownership of an asset to the lessee.

Improvements on third party property/leasehold improvements are improvements and expenses relative to identifiable and separable asset. Normally, this kind of investment is sustained in order to make a property, rented from third parties, suitable for use.

Recognition criteria

Property, plant and equipment and investment property are initially recognised at cost, including all directly attributable costs connected to the acquisition or to the functioning of the asset.

Subsequently incurred expenses are added to the carrying amount of the asset, or recognised as separate assets, if it is probable that they will lead to measurable future economic benefits exceeding those initially estimated and reliably measurable; otherwise, they are recognised in the income statement.

Measurement criteria

Property, plant and equipment and investment property are measured at cost, net of any depreciation or impairment losses.

Property, plant and equipment and investment property with a finite useful life are systematically depreciated at constant rates during their useful life.

Property, plant and equipment and investment property with an indefinite useful life, whose residual value is equal to or more than their carrying amount, are not depreciated.

Land is treated separately, even when acquired as part of the value of a property, as it is normally characterised by an indefinite useful life. Where the value of land is included in the value of a property, the two are considered separately. The separate value of the land and the building are calculated by an independent expert in this field and only for units possessed ‘from the ground to the roof’.

The useful life of property, plant and equipment and investment property is reviewed at the closure of each period and if the expectations are not in line with previous estimates, the depreciation rate for the current period and subsequent ones is adjusted.

If there is objective proof that a single asset may have undergone a reduction in value, a comparison is made between the carrying amount of the asset with its recoverable amount, equal to the greater between fair value, less cost to sell, and the relative value in use, intended as the current value of future cash flows predicted to originate from this asset. Any amortisation, impairment losses and reversals of impairment losses are taken to profit or loss.

When an impairment loss is reversed, the new carrying amount cannot exceed the net carrying amount that would have been calculated if no impairment loss had been recognised on the asset in previous years.

The useful lives that are normally estimated are the following:

Buildings - not exceeding 34 years

Furniture - not exceeding 7 years

Electronic systems: - not exceeding 3 years

Other: - not exceeding 5 years

• Improvements on third party property/leasehold improvements. - not exceeding 5 years

Derecognition criteria

Property, plant and equipment and investment property are derecognised from the statement of financial position when they are sold or when no future economic gains are forecast from their use or disposal.