6 Property, plant and equipment

millions of €
  Land and equivalent
rights, and buildings
including buildings
on land owned by
third parties
Technical equipment
and machinery
Other equipment,
operating and
office equipment
Advance payments
and construction
in progress
Total
Cost          
At December 31, 2015 18,516 116,013 8,597 3,468 146,594
Currency translation 80 928 47 38 1,093
Changes in the composition of the Group 0 15 (2) 2 15
Additions 133 5,357 482 5,384 11,356
Disposals 157 4,786 1,240 82 6,265
Change from non-current assets and disposal groups held for sale (200) (9) (106) (8) (323)
Reclassifications 168 4,196 636 (5,037) (37)
At December 31, 2016 18,540 121,714 8,414 3,765 152,433
Currency translation (294) (3,342) (209) (165) (4,010)
Changes in the composition of the Group 23 7 2 9 41
Additions 104 4,954 469 5,994 11,521
Disposals 206 5,053 596 57 5,912
Change from non-current assets and disposal groups held for sale (526) (32) 0 (1) (559)
Reclassifications 246 4,874 761 (5,927) (46)
At December 31, 2017 17,887 123,122 8,841 3,618 153,468
Accumulated depreciation and impairment losses          
At December 31, 2015 11,082 84,785 6,063 27 101,957
Currency translation 51 503 23 (2) 575
Changes in the composition of the Group 0 5 (3) 0 2
Additions (depreciation) 684 7,148 724 1 8,557
Additions (impairment) 63 138 11 8 220
Disposals 163 4,165 1,046 24 5,398
Change from non-current assets and disposal groups held for sale (139) (8) (73) (8) (228)
Reclassifications (41) (68) 110 (1) 0
Reversal of impairment losses (8) (2) 0 0 (10)
At December 31, 2016 11,529 88,336 5,809 1 105,675
Currency translation (200) (1,809) (115) (1) (2,125)
Changes in the composition of the Group 9 0 1 0 10
Additions (depreciation) 635 6,905 772 0 8,312
Additions (impairment) 35 42 3 0 80
Disposals 173 4,234 532 0 4,939
Change from non-current assets and disposal groups held for sale (369) (31) 0 0 (400)
Reclassifications (84) (11) 83 0 (12)
Reversal of impairment losses (11) 0 0 0 (11)
At December 31, 2017 11,371 89,198 6,021 0 106,590
Net carrying amounts          
At December 31, 2016 7,011 33,378 2,605 3,764 46,758
At December 31, 2017 6,516 33,924 2,820 3,618 46,878

For further details on depreciation, amortization and impairment losses, please refer to Note 22 “Depreciation, amortization and impairment losses” and Note 5 “Intangible assets."

Additions relate in particular to investments in the United States operating segment in growth in network build-out and investments in the Germany and Europe operating segments in the broadband and fiber-optic roll-out, the IP transformation, and our mobile infrastructure. Moreover, EUR 1.0 billion were attributable to the capitalization of higher-priced mobile ­devices. These relate to the business model JUMP! On Demand, which was introduced at T-Mobile US in June 2015 and under which customers no longer purchase the device but lease it. This capitalization was offset in the financial year by disposals of terminal equipment returned by customers under the JUMP! On Demand program amounting to EUR 0.7 billion.

Restoration obligations of EUR 0.3 billion were recognized as of December  31, 2017 (December 31, 2016: EUR 0.4 billion). This includes restoration obligations of EUR 0.2 billion at T-Mobile US and EUR 0.1 billion at the Germany operating segment.

Deutsche Telekom had commitments for the acquisition of property, plant and equipment in the amount of EUR 2.8 billion (December 31, 2016: EUR 2.3 billion) as of the reporting date.

In the case of the Romania – Fixed network cash-generating unit assigned to the Europe operating segment, an ad hoc impairment test led to the review of a potential need to impair the assets. The impairment testing in Romania was necessitated by the aggregation of the Fixed network and Mobile communications cash-generating units in Romania. No goodwill was allocated to the Romania – Fixed network cash-generating unit at the reporting date.

The measurement of the Romania – Fixed network cash-generating unit was founded on projections for a ten-year projection period that is based on the financial plan that has been approved by management and is also used for internal purposes. The planning horizon selected reflects the assumptions for short- to medium-term market developments and is selected to achieve a steady state in the entities’ business outlook that is necessary for ­calculating the perpetual annuity. This steady state can only be established based on this planning horizon, in particular due to the sometimes long investment cycles in the telecommunications industry and the investments planned and expected in the long run to acquire and extend the rights of spectrum use. Cash flows beyond the internal mid-term planning are extrapolated using appropriate growth rates defined ­separately for each cash-generating unit. A growth rate of 2.0 percent (2016: 2.0 percent) was set for the cash-generating unit Romania – Fixed network and was based on the real growth and inflation expected in the long term. The key assumptions on which management has based its determination of the recoverable amount include the following assumptions that were primarily derived from internal sources and are based on past experience and extended to include internal expectations, and that are underscored by external market data and estimates: development of revenue, customer acquisition and retention costs, churn rates, capital expenditure, market share, and growth rates. Discount rates are determined on the basis of external figures derived from the market, taking account of the market and country risks associated with the cash-generating unit. The discount rate for the cash-generating unit Romania – Fixed network was 7.76 percent
(2016: 7.79 percent).

The recoverable amount determined internally, which was calculated in accordance with IFRS 13 using Level 3 input parameters (i.e., unobservable inputs) amounted (before deduction of net debt) to EUR 334 million for the Romania – Fixed network cash-generating unit. The resulting need for impairment was EUR 121 million for Romania – Fixed network, which as a rule must be allocated to non-current assets. The recoverable amount was reviewed on the basis of an external expert opinion on account of the existing lower value limits (fair value less costs of disposal of the relevant assets). Based on the recoverable amounts for the non-current assets of the Romania – Fixed network cash-generating unit derived from this expert opinion, no impairment loss was recorded in the final analysis.

The annual impairment tests for the goodwill assigned to the cash-­generating units as of December 31, 2017 identified a need for impairment in the Albania cash-generating unit of EUR 45 million. This need for impairment was to be allocated to existing goodwill (EUR 8 million) (please also refer to Note 5 “Intangible assets”) and, as a rule, to non-current assets. The recoverable amounts (fair value less costs of disposal) of the relevant assets were reviewed on the basis of an external expert opinion on account of the lower value limits to be observed. Based on the recoverable amounts of non-current assets derived from this expert opinion, items of property, plant and equipment were impaired by EUR 37 million. Of this figure, EUR 22 million was attributable to non-controlling interests. The impairment loss primarily related to technical infrastructure.