EDC 2014 SR (UPDATED)

EDC 2014 Performance Report
Depreciation and amortizationare calculated on a straight-line basis over the economic lives of the
assets as follows:
Number of years
Power plants 15-30
Production wells 10-40
Fluid Collection and Recycling System (FCRS) 13-20
Buildings, improvements and other structures 5-35
Exploration, machinery and equipment 2-25
Transportation equipment 5-10
Furniture, fixtures and equipment 3-10
Laboratory equipment 5-10
Depreciation and amortization of an item of property, plant and equipment begin when it becomes
available for use, i.e., when it is in the location and condition necessary for it to be capable of
operating in the manner intended by management. Depreciation and amortization cease at the
earlier of the date that the item is classified as held for sale (or included in a disposal group that is
classified as held for sale) in accordance with PFRS 5, Non-current Assets Held for Sale and
Discontinued Operations, and the date the asset is derecognized. Leasehold improvements are
amortized over the lease term or the economic life of the related asset, whichever is shorter.
An item of property, plant and equipment is derecognized upon disposal or when no future
economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition
of the asset (calculated as the difference between the net disposal proceeds and the carrying
amount of the asset) is included in the consolidated statement of income in the year the asset is
derecognized. The residual values, useful lives and methods of depreciation and amortization are
reviewed and adjusted, if appropriate, at each financial reporting date.
Property, plant and equipment are recognized based on their significant parts. Each part of an item
of property, plant and equipment with a cost that is significant in relation to the total cost of the
item is depreciated separately.
Property, plant and equipment also include the estimated rehabilitation and restoration costs of
the Company’s steam fields and power plants contract areas for which the Company is legally and
constructively liable. These costs are included under “FCRS and Production Wells” and “Power
Plants” accounts, respectively (see Note 12).
Construction in progress is stated at cost and not depreciated until such time that the assets are put
into operational use.
Intangible Assets
Intangible assets acquired separately are measured on initial recognition at cost. Following initial
recognition, intangible assets are carried at cost less accumulated amortization and accumulated
impairment loss, if any. Internally-generated intangible assets, if any, excluding capitalized
development costs, are not capitalized and expenditure is reflected in the consolidated statement of
income in which the expenditure is incurred.
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