Property, plant and equipment

12 Months Ended

Dec. 31, 2016

Property, Plant and Equipment [Abstract]

The major classes of property, plant and equipment are as follows:



	2016		2015
December 31,	$’000		$’000

Land and buildings	1,010,362		994,382
Machinery and equipment	179,537		182,510
Furniture, fixtures and equipment	235,098		225,943
River cruise ship and canal boats	18,618		18,773

	1,443,615		1,421,608
Less: Accumulated depreciation	(368,939	)	(343,247	)

Total property, plant and equipment, net of accumulated depreciation	1,074,676		1,078,361

The depreciation charge on property, plant and equipment of continuing operations for the year ended December 31, 2016 was $51,835,000 (2015 - $49,982,000; 2014 - $51,629,000).

The table above includes the property, plant and equipment of Charleston Center LLC, a consolidated VIE, of $201,861,000 (2015 - $201,342,000). See Note 5.

There was no capitalized interest in the year ended December 31, 2016 (2015 - $Nil; 2014 - $Nil).

During the year ended December 31, 2016, Belmond considered whether the decline in performance of Belmond Orcaella, a cruise ship in Myanmar under long-term charter, caused by increased competition in Myanmar indicated that the carrying amount of the business' fixed assets may not be recoverable. Belmond concluded that an impairment trigger existed and an impairment test was required. The carrying value of assets was written down to fair value based on management’s best estimate of the recoverable value. The impairment charge of $1,007,000 is included within impairment of property, plant and equipment in the statements of consolidated operations.

During the year ended December 31, 2016, Belmond considered whether the decline in performance of Belmond Northern Belle caused by a reduction in passenger numbers sourced mainly from regional markets in the U.K. indicated that the carrying amount of Belmond Northern Belle's fixed assets may not be recoverable. Under the first step of the fixed assets impairment test, the sum of the undiscounted cash flows expected to result from the operations of Belmond Northern Belle was in excess of its carrying value. Belmond Northern Belle had a property, plant and equipment balance of $4,332,000 at December 31, 2016. The impairment test remains sensitive to changes in assumptions; factors that could reasonably be expected to potentially have an adverse effect on the sum of the undiscounted cash flows of the reporting unit include the future operating projections of the train, particularly passenger numbers and ticket prices, and any deterioration in the U.K. regional economy. Any failure to meet these assumptions may result in an impairment charge that would write down the carrying value of assets to fair value in future periods.

There were no impairments of property, plant and equipment in the year ended December 31, 2015.

In the year ended December 31, 2014, Belmond identified and recorded a non-cash property, plant and equipment impairment charge of $1,211,000 relating to the write-down to fair value of train carriages of Belmond's former Great South Pacific Express train, which were held in Australia and not in service. The impairment charge was included within impairment of property, plant and equipment in the statements of consolidated operations.