4.1. 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 the profit/(loss) for the period. The allocation to the insurance service result and to other non-technical expenses is carried out by means of cost sharing.

In accordance with IAS 16.29A, the land and buildings that represent underlying items in life and health insurance with participation features are measured at fair value. Investment property is measured using the same model.

Leases

There are around 2,200 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. These relate mainly to land and buildings and vehicles and partly to office furniture and equipment. A significant portion of the capitalised usage rights consists of a small number of contracts concluded for an indefinite period for which estimates had to be made regarding their duration and the exercise of termination options. The terms on which the calculation of these contracts is based are up to 35 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.

There is no allocation for included non-lease components. 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 of land and buildings for own use, classified by business line and measured at amortised cost and at fair value, are 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 as well as operating and office equipment.