Property, Plant, and Equipment - Net

12 Months Ended

Dec. 31, 2023

Property, Plant and Equipment [Abstract]

Property, Plant and Equipment - net

8. Property, Plant and Equipment - net

	December 31,
	2023		2022
Cost
Construction in progress	$	142,708	$	331,500
Plant and buildings		392,503		326,908
Machinery and equipment		550,208		343,724
Motor vehicles		3,972		4,987
Office equipment and furniture		39,501		28,959
Leasehold improvements		320,297		215,477
Land		7,020		7,272
Total cost	$	1,456,209	$	1,258,827
Less: Accumulated depreciation
Plant and buildings	$	51,538	$	39,045
Machinery and equipment		218,740		146,299
Motor vehicles		2,603		2,263
Office equipment and furniture		18,094		9,709
Leasehold improvements		107,292		67,730
Total accumulated depreciation	$	398,267	$	265,046
Less: Impairment
Machinery and equipment	$	51,331	$	—
Office equipment and furniture		1,783		—
Leasehold improvements		21,902		—
Construction in progress		3,309		—
Total impairment	$	78,325	$	—
Property, plant and equipment, net	$	979,617	$	993,781

Buildings and machinery and equipment of Sinovac Dalian with a net book value of $32,677 (RMB232.0 million) were pledged as collateral for a bank loan from China Everbright Bank (notes 12 (a)).

Net depreciation expense for the year ended December 31, 2023 was $140,467 (2022 - $153,819, 2021 - $84,446), after deduction of amortized government grants specifically related to qualified property, plant and equipment.

Loss on disposal of equipment for the year ended December 31, 2023 was $395 (2022 - $5,213, 2021 - $977).

As the COVID pandemic came to an end in 2023, the Company identified impairment indicators on certain of its certain machinery, equipment and leasehold improvements. The Company performed a recoverability test by comparing the forecasted undiscounted cash flow to be generated from continuous use of these assets to the asset carrying values. As the carrying values exceeded the projected undiscounted cash flow, the Company measured the impairment amount by estimating the fair value of the assets. The Company determined the fair value using the cost approach by estimating the amount that currently would be required to construct or purchase assets of comparable utility. The estimate also considers the physical deterioration, economic obsolescence, and alternative future use. It was determined the fair value of these assets was $24,188 compared to the carrying value of $102,295 as at December 31, 2023. The impairment of $78,325 was recorded as at December 31, 2023.