Group notes

Property, plant and equipment
Property, plant, and equipment items are carried at cost less accumulated depreciation and impairment losses. The cost of an asset within this category encompasses several components, including the purchase price, import duties, and any expenses directly associated with placing the asset in the required location and condition for use. The cost also includes dismantlement and removal of the asset in the future, if applicable. Borrowing costs incurred for assets requiring a substantial period to get ready for their intended use are included in the cost value until the assets are substantially prepared for their use or sale, after which they are subject to depreciation. The Group adheres to a policy of capitalizing costs upon initial recognition and for the replacement of substantial parts of property, plant, and equipment, provided that it is probable the future economic benefits associated with these expenditures will accrue to the Group, and the costs can be reliably measured. Conversely, all other expenses are immediately recognized in the profit or loss statement upon their incurrence.

Rental equipment
The rental fleet includes drill rigs, mine trucks, loaders, and to a lesser extent hydraulic attachments, simulators and other mining and construction equipment. Rental equipment is initially recognized at cost and is depreciated over the estimated useful life of the equipment. The depreciation of rental equipment is structured with consideration for a residual value, estimated within a range of 0-10% of the equipment’s cost.

Depreciation and amortization
Depreciation and amortization are calculated based on the cost of the asset and are applied using the straight-line method over the estimated useful life. In cases where certain components of property, plant, and equipment have a substantial cost relative to the total cost of the item and do not share a corresponding useful life, they are depreciated separately.

The estimated useful lives are as follows:
Buildings                                             25–50 years
Machinery and equipment              3–10 years
Vehicles                                               4–5 years
Computer hardware and software 3–10 years
Rental equipment                               3–8 years

The useful life and residual values are reassessed annually or more often if there are indications of impairment. Land and assets under construction are not depreciated or amortized.

Epiroc considers climate risk factors when evaluating the estimated useful life of property, plant and equipment. The heightened occurrence and severity of extreme weather events, such as floods and storms, could impact the production capacity and maintenance of buildings and equipment. Additionally, water shortages in specific regions may also affect production capacity. If innovations lead to alternatives with lower climate impact, older equipment may become obsolete earlier than anticipated. Additionally, stricter regulations and increased requirements related to climate and environmental protection may impact the use and valuation of certain equipment.

Considerations related to climate risks have not had any significant impact on the financial reporting including any changes of useful economic lives of tangible assets.