Investor Presentaiton
129
ANNUAL INTEGRATED REPORT 2021 | AXTEL
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exchange for a consideration. The Company recognizes a right-
of-use asset and the corresponding lease liability, for all lease
agreements in which it acts as lessee, except in the following
cases: short-term leases (defined as leases with a lease term of
less than 12 months); leases of low-value assets (defined as leases
of assets with an individual market value of less than US$5,000
(five thousand dollars)); and, lease agreements whose payments
are variable (without any contractually defined fixed payment).
For these agreements, which exempt the recognition of a right-
of-use asset and a lease liability, the Company recognizes the rent
payments as an operating expense in a straight-line method over
the lease period.
The right-of-use asset comprises all lease payments discounted
at present value; the direct costs to obtain a lease; the advance
lease payments; and the obligations of dismantling or removal
of assets. The Company depreciates the right-of-use asset over
the shorter of the lease term and the useful life of the underlying
asset; in this sense, when the lessee will exercise a purchase
option, the lessee shall depreciate the right-of-use asset from the
commencement date to the end of the useful life of the underlying
asset. Depreciation begins on the lease commencement date.
The lease liability is initially measured at the present value of the
future minimum lease payments that are not paid at that date,
using a discount rate that reflects the cost of obtaining funds
for an amount similar to the value of the lease payments, for the
acquisition of the underlying asset, in the same currency and
for a similar period to the corresponding contract (incremental
borrowing rate). When lease payments contain non-lease
components (services), the Company has chosen, for some class
of assets, not to separate them and measure all payments as
a single lease component; however, for the rest of the class of
assets, the Company measures the lease liability only considering
lease payments, while all of the services implicit in the payments,
are recognized directly in the consolidated statement of income
as operating expenses.
To determine the lease term, the Company considers the non-
cancellable period, including the probability to exercise any right
to extend and/or terminate the lease term.
Subsequently, the lease liability is measured increasing the carrying
amount to reflect interest on the lease liability (using the effective
interest method) and reducing the carrying amount to reflect the
lease payments made.
When there is a modification in future lease payments resulting from
changes in an index or a rate used to determine those payments,
the Company remeasures the lease liability when the adjustment to
the lease payments takes effect, without reassessing the discount
rate. However, if the modifications are related to the lease term or
exercising a purchase option, the Company reassesses the discount
rate during the liability's remeasurement. Any increase or decrease
in the value of the lease liability subsequent to this remeasurement
is recognized as an adjustment to the right-of-use asset to the
same extent.View entire presentation