Property, plant and equipment

6 Months Ended

Jun. 30, 2017

Property, Plant and Equipment [Abstract]

Property, plant and equipment

Property, plant and equipment

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

	June 30, 2017		December 31, 2016
	$’000		$’000
Land and buildings	1,107,759		1,010,362
Machinery and equipment	194,006		179,537
Fixtures, fittings and office equipment	258,595		235,098
River cruise ship and canal boats	12,668		18,618
	1,573,028		1,443,615
Less: Accumulated depreciation	(409,053	)	(368,939	)
Total property, plant and equipment, net of accumulated depreciation	1,163,975		1,074,676

The depreciation charge on property, plant and equipment for the three and six months endedJune 30, 2017 was $14,947,000 (June 30, 2016 - $13,183,000) and $28,542,000 (June 30, 2016 - $26,127,000).

The table above includes property, plant and equipment, net of accumulated depreciation, of Charleston Center LLC, a consolidated VIE, of $199,898,000 at June 30, 2017 (December 31, 2016 - $201,861,000).

In the three months endedJune 30, 2017, Belmond considered whether the decline in performance of Belmond Road to Mandalay caused by increased competition in Myanmar indicated that the carrying amount of the business’s 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 management’s best estimate of the fair value based on an internally developed discounted cash flow analysis. The impairment charge of $7,124,000 is included within impairment of property, plant and equipment in the statements of consolidated operations.

In the three months endedJune 30, 2017, 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 the business’s 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 assumptions of potential market value. The impairment charge of $1,092,000 is included within impairment of property, plant and equipment in the statements of consolidated operations.

There were no impairments of property, plant and equipment in the three and six months endedJune 30, 2016.

There was no capitalized interest in the three and six months endedJune 30, 2017 and 2016.