8 Property, plant and equipment

(CHF million)	Land	Engineering structures	Buildings	Projects in progress	Movables	Leased assets	Total property, plant and equipment
Cost

Balance as at 1 January 2016	108.3	1,659.6	4,029.7	227.2	273.3	112.6	6,410.7
Additions				174.1			174.1
Disposals		–26.1	–7.2	–0.8	–11.5		–45.6
Transfers	0.4	55.7	175.3	–253.1	13.9		–7.8
Reclassification			90.8			–90.8	0.0
Balance as at 31 December 2016	108.7	1,689.2	4,288.6	147.4	275.7	21.8	6,531.4

Balance as at 1 January 2017	108.7	1,689.2	4,288.6	147.4	275.7	21.8	6,531.4
Additions	10.0			136.9			146.9
Disposals		–3.4	–87.2		–18.7		–109.3
Transfers		26.2	110.3	–161.5	16.4		–8.6
Change in consolidation scope					0.1		0.1
Balance as at 31 December 2017	118.7	1,712.0	4,311.7	122.8	273.5	21.8	6,560.5


Depreciation, amortisation

Balance as at 1 January 2016	0.0	–791.8	–2,497.3	0.0	–191.3	–90.9	–3,571.3
Additions		–55.9	–152.1		–14.8	–11.2	–234.0
Disposals		25.1	6.1		11.3		42.5
Reclassification			–85.5			85.5	0.0
Balance as at 31 December 2016	0.0	–822.6	–2,728.8	0.0	–194.8	–16.6	–3,762.8

Balance as at 1 January 2017	0.0	–822.6	–2,728.8	0.0	–194.8	–16.6	–3,762.8
Additions		–60.8	–156.4		–15.6	–1.4	–234.2
Disposals		2.8	86.6		18.4		107.8
Balance as at 31 December 2017	0.0	–880.6	–2,798.6	0.0	–192.0	–18.0	–3,889.2


Government subsidies and grants

Balance as at 1 January 2016	0.0	–3.6	–1.0	–4.6	–0.2	0.0	–9.4
Additions				–4.1	0.1		–4.0
Disposals		0.4	0.6				1.0
Transfers		–7.0	–0.7	7.6			–0.1
Balance as at 31 December 2016	0.0	–10.2	–1.1	–1.1	–0.1	0.0	–12.5
Additions				–1.3			–1.3
Disposals		0.7	0.1		0.3		1.1
Transfers		–1.4	–0.1	2.4	–0.9		0.0
Balance as at 31 December 2017	0.0	–10.9	–1.1	0.0	–0.7	0.0	–12.7

Net carrying amount as at 1 January 2016	108.3	864.2	1,531.4	222.6	81.8	21.7	2,830.0
Net carrying amount as at 31 December 2016	108.7	856.4	1,558.7	146.3	80.8	5.2	2,756.1
Net carrying amount as at 31 December 2017	118.7	820.5	1,512.0	122.8	80.8	3.8	2,658.6

Projects in progress

In the past financial year, Flughafen Zürich AG invested CHF 136.9 million in projects in progress (2016: CHF 174.1 million). The biggest items comprise the following projects:

Expansion of the aircraft stands on the western and southern sides of the airport (CHF 31.0 million)
Expansion and refurbishment of the baggage sorting system (CHF 21.9 million)
Upgrade of car park 1 (CHF 8.9 million)

Lease aircraft energy supply system and baggage sorting and handling system

In December 2001, Flughafen Zürich AG concluded a framework lease agreement for financing the aircraft energy supply system and the baggage sorting and handling system, which was then under construction. On 1 August 2003, since the systems were near completion, a first tranche of each of the definitive lease agreements totalling CHF 84.5 million was put into effect. Between 2004 and 2014, a further eleven tranches totalling CHF 28.2 million were added. Based on their form and content, both the framework agreement and the definitive lease agreements are classed as finance leases and have therefore been recognised in the balance sheet. The leased facilities available for use have been depreciated with effect from their date of completion.

The finance lease for the aircraft energy supply system runs until 31 July 2020. The lease for the baggage sorting and handling system ended on 31 December 2016. At that date, the relevant system was included at its net amount of CHF 5.3 million and reclassified into buildings.

Depreciation

Depreciation of property, plant and equipment totalling CHF 234.1 million was offset against government grants and subsidies recognised in the income statement in the amount of CHF 1.1 million.

Impairment

Flughafen Zürich AG voluntarily carries out a calculation at company level on a yearly basis to determine whether there is any indication that property, plant and equipment and intangible assets (see note 10, Intangible assets) may be impaired. The calculation is based on expected future free cash flows of Flughafen Zürich AG and various assumptions regarding future trends (e.g. passenger and traffic volumes, investments, the hub status of Zurich Airport and the discount rate). The calculation as at 31 December 2017 did not identify any indications of impairment.