ONE ROOF

Property, plant and equipment is stated at depreciated
cost. Only amounts directly attributable to an item of property,
plant or equipment are included in its cost. Borrowing costs
are included in cost. Items of property, plant and equipment
are depreciated on a straight-line basis unless, in exceptional
cases, another form of depreciation better reflects the pattern
of consumption of economic benefits.
Items of property, plant, machinery and equipment typically
encountered in the HOCHTIEF Group are depreciated over
the following uniform useful lives:
No. of years
Buildings and investment properties
Technical equipment and machinery;
20–50
transportation equipment
3–10
Other equipment and office equipment 3–8
Estimated useful lives and depreciation methods are reviewed
annually.
Items of property, plant and equipment on finance leases are
recognized at fair value or the present value of the minimum
lease payments, whichever is lower, and are depreciated on a
straight-line basis over their estimated useful life or over a
shorter contract term if applicable.
Investment properties are stated at amortized cost. Trans-
action costs are included on initial measurement. The fair values
of investment properties are disclosed in the Notes. These are
assessed using internationally accepted valuation methods,
such as taking comparable properties as a guide to current
market prices or by applying the discounted cash flow method.
Like property, plant and equipment, investment properties are
depreciated using the straight-line method.
Impairment losses are recognized for intangible assets (in-
cluding goodwill), property, plant and equipment or invest-
ment properties if their recoverable amount (net selling price
or value in use, whichever is higher) falls below their carrying
amount. Impairment testing may require assets and in some
cases liabilities to be grouped into cash-generating units. For
goodwill, impairment testing is performed on cash-generating
units corresponding to the HOCHTIEF divisions that feature in
❘ Information for our Shareholders ❘ ❘ Management Report ❘ ❘ Financial Statements and Notes ❘
segmental reporting. For any asset that is part of an independent
cash-generating unit, impairment is determined with reference
to the recoverable amount of the unit. If the recoverable
amount of a cash-generating unit falls below its carrying
amount, the resulting impairment loss is allocated first to any
goodwill belonging to the unit and then to the unit’s other assets
on a pro rata basis. Except in the case of goodwill, impairment
charges are reversed (up to a maximum of amortized
cost) when the impairment ceases to exist.
Equity-method investments are stated at cost, comprising
the acquired equity interest in an associate or jointly controlled
entity plus any goodwill. The carrying amount is increased or
decreased annually to recognize the Group’s share of after-tax
profits or losses, any dividends, and other changes in equity.
The full carrying amount is tested for impairment in accordance
with IAS 36 whenever there are indications that it may be impaired.
If the recoverable amount of an equity-method investment
is less than its carrying amount, an impairment loss is
recognized for the difference. Any subsequent reversal of an
impairment loss is recognized in profit or loss.
Jointly controlled entities are a type of joint venture. Joint ven-
tures are contractual arrangements under which two or more
parties undertake an economic activity which is subject to
joint control. In addition to jointly controlled entities accounted
for using the equity method, joint ventures also include jointly
controlled operations and construction joint ventures. The latter
are accounted for as follows in accordance with IAS 31: As a
party to a jointly controlled operation or construction joint venture,
HOCHTIEF recognizes the assets it controls, the liabilities
it enters into and the expenses it incurs, and reports its share
of earnings from the activity under sales. Assets and liabilities
remaining in jointly controlled operations and construction
joint ventures (e.g. due to contracts awarded to subcontractors)
lead to a share of earnings that is accounted for using a
method equivalent to the equity method and included in receivables
from or liabilities to construction joint ventures.
Annual Report 2009 137