Notes to the Accounts

12. Tangible fixed assets

	freehold and leaseholdproperty	plant and equipment	assets in course of construction	total
Cost or as valued
At 31 December 1997	319	485	37	841
Exchange differences	–	2	–	2
Reclassifications	–	13	(13)	–
Owned by subsidiary undertakings acquired	42	205	1	248
Capital expenditure	15	60	34	109
Disposals	(7)	(43)	(35)	(85)
Owned by subsidiary undertakings disposed	(120)	(195)	(6)	(321)
At 31 December 1998	249	527	18	794
Depreciation
At 31 December 1997	(71)	(264)	–	(335)
Exchange differences	–	–	–	–
Reclassifications	1	(1)	–	–
Impairment in value	(6)	(5)	–	(11)
Provided in the year	(10)	(56)	–	(66)
Subsidiary undertakings acquired	(12)	(93)	–	(105)
Disposals	3	37	–	40
Subsidiary undertakings disposed	17	101	–	118
At 31 December 1998	(78)	(281)	–	(359)
Net book value At 31 December 1997	248	221	37	506
At 31 December 1998	171	246	18	435

Freehold and leasehold property Net book value includes: freehold of £133m (1997: £206m), short leases of £38m (1997: £39m) and long leases of £nil (1997: £3m). On an original cost basis, cost would have been included at £248m, and accumulated depreciation at £78m.

Depreciation Fixed assets are depreciated over their estimated economic lives in equal annual amounts. Generally, freeholds are depreciated at 1% to 5% per annum, leaseholds at 2% per annum, or over the period of the lease if shorter, and plant and equipment at various rates between 5% and 33% per annum. Land, amounting to £40m, is not depreciated.

Capital commitments The Group had capital commitments for fixed assets, including finance leases, already under contract amounting to £45m at 31 December 1998.

Other notes The net book value of Group tangible fixed assets includes £20m in respect of assets held under finance leases. Depreciation on these assets charged in 1998 was £1m. The net book value of Group tangible fixed assets includes £nil (1997: £3m) in respect of capitalised interest.