Property, plant and equipment

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



	2018		2017
December 31,	$’000		$’000

Land and buildings	1,202,847		1,126,496
Machinery and equipment	192,077		181,670
Furniture, fixtures and equipment	301,751		263,716
River cruise ship and canal boats	5,024		13,900

	1,701,699		1,585,782
Less: Accumulated depreciation	(439,767	)	(417,738	)

Total property, plant and equipment, net of accumulated depreciation	1,261,932		1,168,044

The depreciation charge on property, plant and equipment of continuing operations for the year ended December 31, 2018 was $60,192,000 (2017 - $62,252,000; 2016 - $51,835,000).

The table above includes the property, plant and equipment of Charleston Center LLC, a consolidated VIE, of $192,712,000 (2017 - $197,369,000). See Note 7.

There was $4,832,000 capitalized interest in the year ended December 31, 2018 (2017 - $624,000; 2016 - $Nil).

During the year ended December 31, 2018, additions relating to work-in-progress have been reclassified from property, plant and equipment to other intangible assets. See Note 11.

During the year ended December 31, 2018, Belmond considered whether the decline in performance at Belmond Governor's Residence and Belmond Road to Mandalay as a result of the fall in tourist arrivals in Myanmar due to negative perceptions of the country indicated that the carrying amount of the businesses’ fixed assets may not be recoverable. Belmond concluded that an impairment trigger existed and an impairment test was required. Belmond compared the carrying value of the assets to management’s best estimate of the fair value based on an internally developed discounted cash flow analysis. The combined impairment charge of $4,775,000 is included within impairment of property, plant and equipment and other assets in the statements of consolidated operations and in the results of the operations of Belmond Governor's Residence and Belmond Road to Mandalay, which are included in Owned hotels in the Company’s Rest of world segment, and in the Company's Owned trains & cruises segment, respectively.

In January 2018, the '21' Club sustained water damage which resulted in the restaurant's closure. It reopened during the course of 2018. During the year ended December 31, 2018 the Company recorded a write-off to property, plant and equipment to reflect the assets damaged of $1,287,000 and incurred fixed costs and site clean-up costs of $2,913,000. A corresponding insurance receivable was recorded as recovery of those amounts was expected to be probable. In the year ended December 31, 2018, the Company received $6,922,000 of insurance proceeds related to the recovery of property damage and business interruption and a gain recognized of $2,722,000 in other operating income in the statements of consolidated operations relating to the excess business interruption and property damage insurance recovered above the level of receivable recorded.

In September 2017, the islands of Anguilla and St Martin were hit by Hurricanes Irma and Jose when both Belmond La Samanna on St Martin and Belmond Cap Juluca on Anguilla were closed for the season. Both properties are included in Belmond’s global insurance program which provides combined property damage and business interruption cover for the Caribbean as well as separate flood insurance cover. In addition, Belmond La Samanna has a separate property damage insurance policy covering the eight villas at the resort. During the year ended December 31, 2017, the Company recorded a write-off to property, plant and equipment at the two properties, and a corresponding insurance receivable as recovery of those amounts was expected to be probable. In July 2018, a final settlement was agreed with the insurer of the global insurance program. In the year ended December 31, 2018, the Company received $32,600,000 of insurance proceeds related to the recovery of property damage and business interruption at Belmond La Samanna and Belmond Cap Juluca and recognized $11,160,000 in other operating income in the statements of consolidated operations relating to gain contingencies at the two properties.

During the year ended December 31, 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’ 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 and in the results of the operations of Belmond Road to Mandalay, which is included in the Company's Owned trains & cruises segment.

During the year ended December 31, 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’ 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 and in the results of the operations of Belmond Northern Belle, which is included in the Company's Owned trains & cruises segment.

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 and in the results of the operations of Belmond Orcaella, which is included in the Company's Owned trains & cruises segment.