Property, plant and equipment

x € 1 million

Land and buildings

Machinery and equipment

Regulated
networks*

Other operating assets

Assets under construction

Total

Historical cost as at 1 January 2018

37

104

9,505

48

4

9,698

Investments

1

3

589

-

9

602

Disposals

-

-5

-108

-1

-

-114

Reclassification from / to assets held for sale

-

-69

-

-

-

-69

Reclassification other

-9

8

65

2

-7

59

Historical cost as at 31 December 2018

29

41

10,051

49

6

10,176

Investments

40

3

590

8

3

644

Disposals

-

-1

-28

-

-

-29

Reclassification from / to assets held for sale

-

-1

-

-

-

-1

Reclassification other

1

1

-6

6

-3

-1

Historical cost as at 31 December 2019

70

43

10,607

63

6

10,789

Accumulated depreciation and impairment as at 1 January 2018

15

36

3,471

36

-

3,558

Annual depreciation and impairment

1

6

261

5

-

273

Disposals

-

-3

-88

-1

-

-92

Reclassification from / to assets held for sale

-

-27

-

-

-

-27

Reclassification other

-4

4

58

-

-

58

Accumulated depreciation and impairment as at 31 December 2018

12

16

3,702

40

-

3,770

Annual depreciation and impairment

3

4

278

4

-

289

Disposals

-

-1

-23

-

-

-24

Reclassification other

-1

3

-1

-

-

1

Accumulated depreciation and impairment as at 31 December 2019

14

22

3,956

44

-

4,036

Net book value as at 31 December 2018

17

25

6,349

9

6

6,406

Net book value as at 31 December 2019

56

21

6,651

19

6

6,753

  1. * Regulated grids also comprises assets under construction.

The net book value of property, plant and equipment increased by € 347 million compared with the preceding year. Stedin Group's investments amounted to € 644 million, and related mainly to the regulated gas and electricity grids as well as to the large-scale offer and installation of smart meters. The disposals related to asset retirements (especially the machinery and equipment in the regulated domain).

Regulated grids also comprise assets under construction. An amount of € 3 million in interest was capitalised on the assets under construction, applying an interest rate of 2.7% (2018: € 3 million, at 3.0%).

Regulated networks are measured at the revalued amount, i.e. the fair value at the date of the revaluation less accumulated depreciation and impairment.

Other property, plant and equipment is recognised at cost less accumulated depreciation and impairment.

The main data used to measure fair value are:

Parameters for measuring fair value of regulated networks

Valuation method (ACM)

Income approach derived from indexed value of regulated assets

Cash flow horizon for networks in years

Remaining term of regulated networks

WACC (ACM) applied in percent

4.04%

Date of change of WACC (ACM)

2021

Market share of Stedin Group in the Netherlands (ACM) in percent

Electricity transmission 24% and gas distribution 26%

The most recent revaluation occured in 2017. There were no changes in the valuation methodology in 2019. The fair value of the grids will be reassessed in 2021, when the new regulation information from the ACM will be available. In 2021, the ACM will publicly disclose this information again, as a result of which the unobservable parameters for fair value measurement of 'level 3' in IFRS 13 will be 'objective market data' again for Stedin Group for that moment.

As described in 'Removing gas connections' in note 25 Other provisions Stedin will accelerate the removal of gas connections that are 'out of operation'. The accelerated removal affects the estimated remaining useful life of the connections concerned. This situation does not affect the 2019 results. For the years 2021–2024, the depreciation on the connections concerned will be brought into line with the remaining useful life.

There were no impairments in 2019.

As at 31 December 2019, the book value of regulated grids at historical cost was € 5,850 million (31 December 2018: € 5,475 million).