Hubbell Policies

DISPOSITION OF PROPERTY, PLANT AND EQUIPMENT POLICY

English

Owner : Vice President, Controller

Last Review: 2015.05.01

FIN – 35

Department: Finance

POLICY This policy requires all disposition of property, plant and equipment ("PPE") to be reported in accordance with established procedures and guidelines. SCOPE This policy applies to all Hubbell business units. PURPOSE The purpose of this policy is to ensure compliance with United States Generally Accepted Accounting Principles ("GAAP") and to ensure consistency in the application of these principles across all Hubbell business units in accounting for PPE. PROCEDURE Dispositions of Property, Plant and Equipment ("PPE") include a transfer of ownership or permanent withdrawal of an asset, or portion thereof, including: sale or exchange, retirement, physical abandonment, Involuntary Conversion , scrap or transfer to supplies. Approvals for all PPE disposals must adhere to the group's Signature Authority Matrix. Disposals in excess of $25,000 net book value must also be entered into the AFE Electronic Routing System in accordance with the Procedure for AFE Approval. Gains or losses associated with the physical disposition of PPE would be recognized as follows: 1. Sales/retirement -Book gains or losses should be recognized as the difference between Net Proceeds received and net book value at the date of sale. 2. Involuntary conversions - Estimated losses should be recognized in the period the involuntary conversion occurs and estimated gains (i.e., insurance proceeds), if any, should be deferred until realized. 3. Under no condition should assets be disposed of for book purposes only and not for tax without prior written approval from the tax department. All disposals should be recorded in the SAP subledger or other fixed asset accounting software at the time of disposal. The net gain/loss on the general ledger should include any proceeds received. Physically Disposed:

Transfer of ownership between Hubbell entities:

For U.S. GAAP book purposes, the receiving entity will record the asset transfer at net book value (NBV) by recording the original cost and accumulated depreciation (for both book and tax) as of the date of transfer so that the NBV recorded by the receiving entity is the same as the NBV of the selling entity. Tax depreciation should continue on

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