Sustainability and Governance Report
Notes to the FINANCIAL STATEMENTS
Not
2. Summary of significant accounting policies (cont'd)
2.2 Changes in accounting policies and disclosures (cont'd)
SFRS(I) 16 Leases (cont'd)
The Group has lease contracts for office premises, motor vehicle, warehouse and retail outlets. Before the adoption of SFRS(I) 16, the Group classified each of its leases (as lessee)
at the inception date as an operating lease. Refer to Note 2.19 Leases for the accounting policy prior to 1 April 2019.
Upon adoption of SFRS(I) 16, the Group applied a single recognition and measurement approach for all leases except for short-term leases and leases of low-value
assets. Refer to Note 2.19 Leases for the accounting policy beginning 1 April 2019. The standard provides specific transition requirements and practical expedients,
which have been applied by the Group.
Leases previously accounted for as operating leases
The Group recognised right-of-use assets and lease liabilities for those leases previously classified as operating leases, except for short-term leases and leases of
low-value assets. The right-of-use assets were recognised based on the amount equal to the lease liabilities, adjusted for any related prepaid and accrued lease payments
previously recognised. Lease liabilities were recognised based on the present value of the remaining lease payments, discounted using the incremental borrowing rate at
the date of initial application.
The Group also applied the available practical expedients wherein it:
Used a single discount rate to a portfolio of leases with reasonably similar characteristics
Relied on its assessment of whether leases are onerous immediately before the date of initial application
Applied the short-term leases exemptions to leases with lease term that ends within 12 months of the date of initial application
Excluded the initial direct costs from the measurement of the right-of-use asset at the date of initial application
Used hindsight in determining the lease term where the contract contained options to extend or terminate the lease
Based on the above, as at 1 April 2019, right of use assets and lease liabilities of $1,502,000 were recognised and presented separately in the consolidated balance sheet.
The lease liabilities as at 1 April 2019 can be reconciled to the operating lease commitments as of 31 March 2020, as follows:
Operating lease commitments as at 31 March 2019
Less: Commitments relating to short-term leases
Add: Commitments relating to in-substance fixed payments
Weighted average incremental borrowing rate at 1 April 2019
Lease liabilities recognised as at 1 April 2019
53
3
Group
2020
$'000
1,111
(59)
535
1,587
2.00%
1,502View entire presentation