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This excerpt taken from the PTR 20-F filed May 26, 2009. (f) Property,
plant and equipment
Property, plant and equipment, including oil and gas properties
(Note 3(g)), are recorded at cost less accumulated
depreciation, depletion and amortization. Cost represents the
purchase price of the asset and other costs incurred to bring
the asset into existing use. Subsequent to their initial
recognition, property, plant and equipment are carried at
revalued amounts. Revaluations are performed by independent
qualified valuers on a periodic basis.
In the intervening years between independent revaluations, the
directors review the carrying values of the property, plant and
equipment and adjustments are made if the carrying values differ
materially from their respective fair values.
Increases in the carrying values arising from revaluations are
credited to the revaluation reserve. Decreases in the carrying
values arising from revaluations are first offset against
increases from earlier revaluations in respect of the same
assets and are thereafter charged to the consolidated statements
of income. All other decreases in carrying values are charged to
the consolidated statements of income. Any subsequent increases
are credited to the consolidated statements of income up to the
respective amounts previously charged.
Revaluation surpluses realised through the depreciation or
disposal of revalued assets are retained in the revaluation
reserve and will not be available for offsetting against future
revaluation losses.
Depreciation, to write off the cost or valuation of each asset,
other than oil and gas properties (Note 3(g)), to their
residual values over their estimated useful lives is calculated
using the straight-line method.
The Group uses the following useful lives for depreciation
purposes:
No depreciation is provided on construction in progress until
the assets are completed and ready for use.
The assets’ residual values and useful lives are reviewed,
and adjusted if appropriate, at each balance sheet date.
Property, plant and equipment, including oil and gas properties
(Note 3(g)), are reviewed for possible impairment when
events or changes in circumstances indicate that the carrying
amount may not be recoverable. An impairment loss is recognized
for the amount by which the carrying amount of a cash generating
unit exceeds the higher of its fair value less costs to sell and
its value in use, which is the estimated net present value of
future cash flows to be derived from the cash generating unit.
Gains and losses on disposals of property, plant and equipment
are determined by reference to their carrying amounts and are
recorded in the consolidated statements of income.
Table of Contents
PETROCHINA
COMPANY LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
(Amounts in millions unless otherwise stated)
Interest and other costs on debts to finance the construction of
property, plant and equipment are capitalized during the period
of time that is required to complete and prepare the asset for
its intended use. Costs for repairs and maintenance activities
are expensed as incurred except for costs of components that
result in improvements or betterments which are capitalized as
part of property, plant and equipment and depreciated over their
useful lives.
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