Investor Presentaiton
nuuday
Management review Financial statements Section 1
Section 2 Section 3
Section 4
Section 5
Section 6
Parent company
Statements
..........
3.3 | Lease assets and liabilities (continued)
§
Accounting policies
Comments
The total cash outflow for leases
in 2022 totalled DKK 85m (2021:
DKK 90m). The amount is excl.
short-term leases and leases of
low-value assets.
Assets and liabilities arising from leases
are initially measured on a present-value
basis. Lease liabilities include the net pre-
sent value of the following lease pay-
ments:
• fixed payments (including in-substance
fixed payments), less any lease incen-
tives receivable
⚫ variable lease payments that are
based on an index or a rate, initially
measured using the index or rate as at
the commencement date
• amounts expected to be payable by
the Group under residual value guar-
antees
⚫the exercise price of a purchase option
if the Group is reasonably certain to
exercise that option
.
payments of penalties for terminating
the lease, if the lease term reflects the
Group exercising that option.
Lease payments to be made under rea-
sonably certain extension options are
also included in the measurement of the
liability.
The lease payments are discounted using
the interest rate implicit in the lease. If
that rate cannot be readily determined,
which is generally the case for leases in
the Group, the lessee's incremental bor-
rowing rate is used, being the rate that
the lessee would have to pay to borrow
the funds necessary to obtain an asset of
similar value to the lease asset in a similar
economic environment with similar terms,
security and conditions.
The incremental borrowing rates are
based on our existing credit facilities and
observable market data.
The Group is exposed to potential future
increases in variable lease payments
based on an index or rate, which are not
included in the lease liability until they
take effect. When adjustments to lease
payments based on an index or rate take
effect, the lease liability is reassessed
and adjusted against the lease asset.
Lease payments are allocated between
principal and financing costs. The financ-
ing costs are charged to the income
statement over the lease period so as to
produce a constant periodic rate of in-
terest on the remaining balance of the li-
ability for each period.
Lease assets are measured at cost less
accumulated depreciation and write-
downs for impairment. Cost comprises
the following:
⚫ the amount of the initial measurement
of lease liability
⚫ any lease payments made at or before
the commencement date less any
lease incentives received
⚫any initial direct costs
•
decommissioning costs.
Lease assets are generally depreciated
over the shorter of the asset's useful life
and the lease term on a straight-line
basis. If the Group is reasonably certain
to exercise a purchase option, the lease
asset is depreciated over the underlying
asset's useful life cf. note 3.2.
Impairment tests on lease assets are
performed annually and, if necessary,
when circumstances indicate their car-
rying amounts may not be recoverable.
Write-downs of lease assets related to
vacant tenancies are based on expecta-
tions concerning timing and scope,
future cost levels etc. The calculation of
the write-downs comprises rent and
operating costs for the contract period
reduced by the expected rental income
from subleases.
Payments associated with short-term
leases of equipment and vehicles and all
leases of low-value assets are expensed
as incurred. Short-term leases are leases
with a lease term of 12 months or less.
Low-value assets comprise IT equipment
and small items of office furniture.
Nuuday Annual Report 2022
62
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