Highways Agency Annual Report and Accounts 2011-2012

Financial Statements: SECTION 10
Non-Network Assets
Freehold land is not depreciated. Other assets are depreciated at rates calculated to write off the assets
over their expected useful lives on a straight-line basis as follows:
Property
Life in years
• Freehold buildings
up to 60 years
• Leasehold buildings
length of the lease
• Historic leasehold building length of the lease
• Surplus properties awaiting sale no depreciation
Plant and Machinery
Life in years
• Winter maintenance equipment 10 to 25 years
• Office equipment
5 to 10 years
• Technology equipment
15 to 25 years
• Vehicles
5 to 10 years
• Test equipment
5 to 10 years
• IT equipment
5 years
• Database development costs 5 years
• Structural steelwork
10 years
• Assets in storage
no depreciation
• Assets awaiting sale
no depreciation
Assets in storage (for example electronic variable message signs), become a network asset once issued
from stores. These items are kept in controlled conditions and do not deteriorate. Whilst not depreciated,
they are subject to an annual impairment review.
1.6 Non-current assets:
Assets held for sale
Assets in this category comprise surplus land, buildings and dwellings (being land and property released
from road schemes), plant and equipment and other assets no longer used. Assets held for sale are
available for sale within one year, in their present condition, and are being actively marketed. These assets
are valued at the lower of carrying amount and fair value (market value) less selling costs where material.
Intangible Assets
Purchased computer software licences are capitalised as intangible fixed assets where expenditure of
£2,000 or more is incurred. These are valued at cost.
Internally developed intangible assets, such as software or databases, are recognised as intangible
assets if:
i) the software can be run on different hardware platforms;
ii) there is an identifiable asset that will produce future benefits; and
iii) the cost can be determined reliably.
Intangible assets are amortised over their useful lives, typically on a straight-line basis, which is
considered to be three to five years. The estimated useful life and amortisation method are reviewed at the
end of each annual reporting period.
1.7 Inventories
Inventories are valued at the lower of cost and net realisable value. The cost of inventories comprise
all costs incurred in bringing the inventories to their present location and condition. Where excess or
obsolete inventory holdings have been identified, a provision has been made to reduce the carrying value
to estimated net realisable value.
Highways Agency Annual Report and Accounts 2011-12