DOOSAN HEAVY INDUSTRIES & CONSTRUCTION CO., LTD. AND ...

Doosan Heavy Industries & Construction Co., Ltd. and SubsidiariesNotes to the Consolidated Financial StatementsFor the years ended December 31, 2012 and 201113. Property, Plant and Equipment(1) Changes in property, plant and equipment for the years ended December 31, 2012 and 2011 are asfollows:(i) 2012Construction(In millions of won) Land Buildings Machinery Others in progress TotalBeginning balance ₩ 1,326,679 701,850 465,194 75,882 119,986 2,689,591Acquisitions 3,907 6,659 11,419 7,646 170,638 200,269Reclassification 12,160 26,889 79,399 16,752 (117,627) 17,573Disposals - (7,301) (3,664) (14,141) - (25,106)Depreciation - (40,728) (93,952) (24,838) - (159,518)Impairment losses - 656 (1,340) (6) - (690)Changes in exchange rate (9,183) (23,976) (7,425) (1,853) (5,384) (47,821)Ending balance ₩ 1,333,563 664,049 449,631 59,442 167,613 2,674,298- Acquisition cost 1,333,563 1,012,839 1,313,743 206,831 167,613 4,034,589- Accumulated depreciation - (348,790) (864,112) (147,389) - (1,360,291)(ii) 2011Construction(In millions of won) Land Buildings Machinery Others in progress TotalBeginning balance ₩ 2,010,138 849,246 445,500 75,666 141,257 3,521,807Acquisitions 471 4,287 11,965 23,807 221,663 262,193Reclassification 9,120 46,264 115,408 7,475 (237,410) (59,143)Disposals - (119) (171) (2,808) (7) (3,105)Depreciation - (38,511) (82,462) (21,172) - (142,145)Impairment losses - (854) 34 (254) - (1,074)Changes in exchange rate (7,168) (952) (4,413) (1,399) (756) (14,688)Changes in scope ofconsolidation (Note 12)(685,882) (157,511) (20,667) (5,433) (4,761) (874,254)Ending balance ₩ 1,326,679 701,850 465,194 75,882 119,986 2,689,591- Acquisition cost 1,326,679 1,005,601 1,232,985 206,403 119,986 3,891,654- Accumulated depreciation - (303,751) (767,779) (130,264) - (1,201,794)- Accumulated impairment - - (12) (257) - (269)As of December 31, 2012, some portion of the Group’s property, plant and equipment are pledged ascollateral for borrowings. The Group has no right to pledge such assets as collateral or to sell (see Note 34).(2) Capitalization of borrowing cost for the years ended December 31, 2012 and 2011 are as follows:(In millions of won, except percentage) 2012 2011Capitalization of borrowing cost ₩ 1,703 278Interest rate of borrowing cost (%) 4.76 5.3254