NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS for the period ended 28 July 2018 C. CAPITAL EMPLOYED This section provides additional information regarding lines in the financial statements that are most relevant to explaining the capital investment made that allows the Group to generate its trading performance during the period and liabilities incurred as a result, including the applicable accounting policies applied and significant estimates and judgements made. C1 PROPERTY, PLANT AND EQUIPMENT Freehold Freehold Fixtures and Plant and Capital works land buildings fittings equipment in progress Total $'000 $'000 $'000 $'000 $'000 $'000 At 30 July 2016 Cost 9,600 19,500 440,088 428,274 28,903 926,365 Accumulated depreciation - (4,958) (271,054) (204,974) - (480,986) Net book amount 9,600 14,542 169,034 223,300 28,903 445,379 Period ended 29 July 2017 Carrying amount at beginning of period 9,600 14,542 169,034 223,300 28,903 445,379 Additions - - 18,000 13,450 53,967 85,417 Transfer between classes - - 16,558 16,385 (33,077) (134) Assets written off – cost - - (3,725) (7,525) - (11,250) Assets written off – accumulated depreciation - - 3,515 5,197 - 8,712 Impairment1 - - (4,542) - - (4,542) Depreciation charge - (488) (33,333) (29,199) - (63,020) Exchange differences - - (302) (47) (2) (351) Carryingamount at end of period 9,600 14,054 165,205 221,561 49,791 460,211 At 29 July 2017 Cost 9,600 19,500 470,619 450,537 49,791 1,000,047 Accumulated depreciation and impairment - (5,446) (305,414) (228,976) - (539,836) Net book amount 9,600 14,054 165,205 221,561 49,791 460,211 Period ended 28 July 2018 Carrying amount at beginning of period 9,600 14,054 165,205 221,561 49,791 460,211 Additions - - 23,927 9,049 12,669 45,645 Transfer between classes - - 24,138 13,520 (48,295) (10,637) Assets written off – cost - - (9,666) (26,146) - (35,812) Assets written off – accumulated depreciation - - 9,418 26,024 - 35,442 Impairment1 - - (6,538) - - (6,538) Depreciation charge - (488) (34,672) (29,066) - (64,226) Exchange differences - - (60) 51 - (9) Carryingamount at end of period 9,600 13,566 171,752 214,993 14,165 424,076 At 28 July 2018 Cost 9,600 19,500 508,958 447,011 14,165 999,234 Accumulated depreciation and impairment - (5,934) (337,206) (232,018) - (575,158) Net book amount 9,600 13,566 171,752 214,993 14,165 424,076 1. Impairment relates to assets associated with store closures and space optimisation (2017: store and distribution centre space optimisation and support office onerous lease provision). Refer to note A3 for more information. Accounting policy Property, plant and equipment is stated at cost less depreciation. Cost includes expenditure that is directly attributable to the acquisition of the items. Cost may also include transfers from equity of any gains/losses on qualifying cash flow hedges of foreign currency purchases of property, plant and equipment. Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. All other repairs and maintenance are charged to profit or loss during the financial period in which they are incurred. Land is not depreciated. Depreciation on other assets is calculated using the straight-line method to allocate the cost net of their residual values, over their estimated useful lives, as follows: • Buildings 40 years (2017: 40 years) • Fixtures and fittings 3 – 12.5 years (2017: 3 – 12.5 years) • Plant and equipment, including leasehold improvements 10 – 20 years (2017: 10 – 20 years) The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period. An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount (refer to note C2). Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are included in profit or loss. Myer Annual Report 2018 59