6. Property, plant and equipment

Property, plant and equipment are generally accounted for using the cost model.

Gains on the disposal of property, plant and equipment are recorded under the item “Other non-technical income”, while losses are recorded under “Other non-technical expenses”.

If the use of a property changes and an owner-occupied property becomes an investment property, the property is reclassified as investment land and buildings with the carrying amount at the date of the change.

Property, plant and equipment are depreciated on a straight line basis over a useful life for buildings of 15 to 80 years and for technical systems and operating and office equipment of 2 to 20 years. Depreciation methods, useful lives and residual values are reviewed on every reporting date and adjusted if necessary. Depreciation of property, plant and equipment is recognised in profit/(loss) for the period after cost sharing in the technical result and other non-insurance service expenses.

The exercise of the measurement option in accordance with IAS 16.29A in connection with initial application of IFRS 17 resulted in a transition from the cost model to fair value measurement for those properties that constitute underlying items in life and health insurance with participation features. Investment property is measured using the same model.

Leases

There are around 1,700 contracts throughout the entire Group which fall within the scope of the standard and for which UNIQA is lessee. Nearly all contracts are simple standard contracts. They mainly relate to real estate and in part to operating and office equipment. A significant portion of the capitalised rights of use consists of a small number of contracts concluded for an indefinite period. For these contracts, estimates were made on the basis of the most probable assumptions regarding the term and the exercise of termination options. The terms on which the calculation of these contracts is based are up to 50 years. The average term of the remaining contracts is between three and five years.

The discount rate used to determine the liability consists of the risk-free interest rate adjusted for country risk, creditworthiness and a repayment factor.

Leases with a contractual term of less than twelve months and low value assets were not recognised. Leases where the underlying asset value does not exceed a new value of € 5 thousand and those with a contract term of less than twelve months were not recognised.

The carrying amounts for land and buildings for own use are broken down as shown in the table below:

The fair values of the land and buildings for own use are derived from expert reports and are comprised as follows:

Other property, plant and equipment refers mainly to technical systems and operating and office equipment.