annual report - Harvey Norman Company Reports & Announcements

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
12. Property, Plant and Equipment (Non-Current) (continued)
Reconciliations (continued)
Buildings under construction (at cost):
C O N S O L I D A T E D
2012 2011
$000 $000
Opening balance 13,572 1,116
Additions 5,518 5,721
Transfers to buildings at fair value (19,367) (1,116)
Transfers from investment properties - 8,684
Net foreign currency differences arising from foreign operations 277 (833)
Closing balance
Net book value of land and buildings
-
280,717
13,572
257,765
Had the consolidated entity‟s land and buildings (other than land and buildings classified as investment properties, owner
occupied land and buildings under construction and land and buildings owned under joint ventures) been measured on
a historical cost basis, the net book value of land and buildings would have been $226.98 million (2011: $162.33 million).
Plant and equipment (at cost):
Opening balance 755,328 692,032
Additions 84,475 132,136
Disposals (67,555) (77,773)
Transfers from / (to) leased plant and equipment 123 (416)
Transfers from other assets - 21,238
Impairment (139) (419)
Net foreign currency differences arising from foreign operations (3,797) (11,470)
Closing balance
768,435
755,328
Accumulated Depreciation
Opening balance 501,267 485,564
Depreciation for the year 72,922 76,751
Disposals (56,887) (57,418)
Transfers from / (to) leased plant and equipment 100 (252)
Transfers from other assets - 4,211
Impairment (a) 509 968
Net foreign currency differences arising from foreign operations (3,392) (8,557)
Closing balance
Net book value
(a) Impairment of Fixed Assets – Republic of Ireland and Northern Ireland
514,519
253,916
501,267
254,061
Ireland and Northern Ireland operations incurred a trading loss of $33.53 million for the current year compared to a
loss of $37.63 million for the preceding year. Consequently, the recoverable amount of plant and equipment assets in
Ireland and Northern Ireland was reviewed.
As a result of this review, an impairment loss of $0.51 million (2011: $0.97 million) was recognised in the Republic of
Ireland to reduce the carrying amount of plant and equipment to recoverable amount. This has been recognised in
the Income Statement in the “other expenses” line item and in the “Retail – Ireland & Northern Ireland” reportable
segment.
Management determined the cash generating units to be each of the 14 retail stores in the Republic of Ireland.
Within each of the retail store cash generating units, the recoverable amount was estimated for plant and equipment
assets. The recoverable amount has been determined based on a value in use calculation using cash flow
projections as at 30 June 2012 based on financial budgets approved by senior management. The pre-tax discount
rate applied to the cash flow projections was 16.0% (2011: 16.0%). The terminal growth rate applied to the cash flow
projections was 4.23% (2011: 4.23%).
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