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The scheduled straight-line depreciation is essentially based on the following economic useful lives:
Economic useful lives maximum
Buildings 50 years
Technical equipment and machinery
Locomotives, track systems 30 years
Blast furnaces, steelworks, continuous casting lines, crane systems 20 years
Surface coating plants, rolling mills, coking plants 15 years
Plant equipment, spare parts 10 years
Car pool 5 years
Factory and office equipment 5 years
Leases
The Group operates as both a lessee and a lessor. When leased property, plant and equipment are
used, the prerequisites of finance leases in accordance with IAS 17 are fulfilled if all substantial risks and
rewards associated with ownership were transferred to the respective Group company. If a contract
consisting of several components applies, a lease arrangement is then assumed, in accordance with
IFRIC 4, if the fulfillment of the contract depends on the utilization of a particular asset and the contract
regulates the transfer of this utilization right. In these cases the respective property, plant and
equipment are capitalized at acquisition or production cost or at the lower net present value of the
minimum lease payments and are depreciated using the straight-line method over their economic useful
lives, or the shorter term of the lease agreement. Future lease payment obligations are discounted
as liabilities.
If assets are utilized in a finance lease arrangement, the net present value of the lease payments is
reported as a lease receivable. The difference between the gross receivable and the net present value
of the receivable is recognized as unrealized financial income. Lease income is reported for the duration
of the lease arrangement using the annuity method, which results in a constant interest rate on the
lease receivable.
Lease arrangements in which a material part of the benefits and risks inherent in ownership of the
leased item remains with the lessor are classified as operating leases. The lease payments to be paid
under these lease arrangements are recognized in the income statement for the duration of the lease
arrangement using the straight-line method.