17 Property, plant, and equipment
Property, plant, and equipment, as well as investment properties not used for operational purposes, are measured at cost less accumulated depreciation.
Costs are capitalized if they extend the useful life or expand the production capacity of an asset. Non-value-adding maintenance and repair costs are recognized as other operating expenses when they are incurred.
Property, plant, and equipment are depreciated on a straight-line basis over their useful life. Land is not depreciated.
The estimated useful life of property, plant, and equipment is as follows: for buildings: 20 to 40 years; for equipment and machinery: 5 to 10 years; and for other property, plant, and equipment: 3 to 10 years.
An impairment test is performed whenever impairment indicators are identified. If the test reveals that the carrying amount exceeds the recoverable amount, the carrying amount is reduced accordingly. Impairment losses are recognized in the income statement.
| In CHF million | Land | Buildings | Equipment and machinery | Assets under construction | Other PPE | Total | ||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Net book values 2023 | ||||||||||||
| January 1, 2023 | 51 | 595 | 199 | 35 | 82 | 962 | ||||||
| Additions | – | 8 | 29 | 36 | 23 | 96 | ||||||
| Disposals | – | –3 | –1 | – | –2 | –6 | ||||||
| Depreciation | –41 | –53 | – | –37 | –131 | |||||||
| Business combinations | – | – | – | – | 1 | 1 | ||||||
| Reclassifications | – | 10 | 13 | –29 | 6 | – | ||||||
| Exchange differences | –2 | –33 | –13 | –3 | –4 | –55 | ||||||
| December 31, 2023 | 49 | 536 | 174 | 39 | 69 | 867 | ||||||
| Cost | 50 | 952 | 635 | 39 | 359 | 2 035 | ||||||
| Accumulated depreciation and impairment | –1 | –416 | –461 | – | –290 | –1 168 | ||||||
| December 31, 2023 | 49 | 536 | 174 | 39 | 69 | 867 | ||||||
| Net book values 2022 | ||||||||||||
| January 1, 2022 | 56 | 611 | 203 | 40 | 104 | 1 014 | ||||||
| Additions | 4 | 16 | 46 | 30 | 25 | 121 | ||||||
| Disposals | – | –3 | –2 | – | –2 | –7 | ||||||
| Depreciation | –39 | –55 | – | –39 | –133 | |||||||
| Business combinations | – | 5 | – | – | – | 5 | ||||||
| Reclassifications | –9 | 29 | 15 | –35 | – | – | ||||||
| Exchange differences | – | –24 | –8 | – | –6 | –38 | ||||||
| December 31, 2022 | 51 | 595 | 199 | 35 | 82 | 962 | ||||||
| Cost | 53 | 1 004 | 657 | 35 | 383 | 2 132 | ||||||
| Accumulated depreciation and impairment | –2 | –409 | –458 | – | –301 | –1 170 | ||||||
| December 31, 2022 | 51 | 595 | 199 | 35 | 82 | 962 | ||||||
Other property, plant, and equipment comprise vehicles, furniture, and IT hardware.
In the reporting year, the sale of property, plant, and equipment resulted in gains of CHF 30 million (previous year: gains of CHF 14 million). The gains are recognized in other operating income.
As of December 31, 2023, contractual commitments for investments in property, plant, and equipment amount to CHF 5 million (previous year: CHF 4 million).
Investment properties
The following table provides information on investment properties included in land and buildings:
| In CHF million | 2023 | 2022 | ||
|---|---|---|---|---|
| Net book value | 27 | 29 | ||
| Fair value | 34 | 34 | ||
| Rental income | 3 | 3 | ||
| Operating expenses | 1 | 1 | ||
| thereof for investment properties without lease income | – | – |
The fair value indicated for investment properties is measured using the discounted cash flow method. Based on the unobservable input data used for the valuation, such as discount rates and expected developments in rental income, it results in a level 3 fair value classification.