SOMFY_ANNUAL_FINANCIAL_REPORT_2017

07 CONSOLIDATED FINANCIAL STATEMENTS

PROPERTY, PLANT AND EQUIPMENT NOTE 5.3

Subsequent expenditures may be capitalised if they comply with asset recognition criteria, as defined by IAS 16, in particular if it is probable that the future economic benefits of the asset will flow to the company. These criteria are considered prior to incurring the cost. Asset residual values, useful lives and asset depreciation are reviewed, and amended if necessary, at the end of each year. PPE recoverable amounts are reviewed when events or changes in circumstances indicate that the book value may not be recovered. PPE are derecognised at disposal or when no future economic benefit is expected from their use or disposal. Any profit or loss resulting from the derecognition of an asset (measured as the difference between the net proceeds of the sale and the book value of the asset) is included in the income statement for the year in which the asset is derecognised.

Except for business combinations, PPE assets are initially recorded at their acquisition or production cost, which includes the purchase price and all costs necessary to make the assets operational. Current maintenance costs are recognised as expenses for the financial year. Straight-line depreciation is used based on the following average useful lives: Buildings: 20 to 30 years; – Machinery and tools: 5 to 10 years; – Transport vehicles: 3 to 5 years; – Office furniture and equipment: 5 to 10 years; – Fittings and fixtures: 8 to 10 years. – Taking account of the nature of PPE held by the Group, no significant component was identified.

91

SOMFY – ANNUAL FINANCIAL REPORT 2017