Page 167 - Amata-one-report2020-en

BUSINESS OPERATION AND OPERATING RESULTS CORPORATE GOVERNANCE FINANCIAL STATEMENTS ENCLOSURES

Short-term leases and leases of low-value assets

A lease that has a lease term less than or equal to 12 months from commencement date or
a lease of low-value assets is recognised as expenses on a straight-line basis over the lease

term.

Accounting policies adopted before 1 January 2020

Leases of property, plant or equipment which transfer substantially all the risks and rewards

of ownership are classified as finance leases. Finance leases are capitalised at the lower of
the fair value of the leased assets and the present value of the minimum lease payments.
The outstanding rental obligations, net of finance charges, are included in long-term
payables, while the interest element is charged to profit or loss over the lease period.

The assets acquired under finance leases is depreciated over the useful life of the asset.

Leases of property, plant or equipment which do not transfer substantially all the risks and
rewards of ownership are classified as operating leases. Operating lease payments are

recognised as an expense in profit or loss on a straight-line basis over the lease term.

The Group as a lessor

A lease that transfers substantially all the risks and rewards incidental to ownership of an
underlying asset to a lessee is classified as finance leases. As at the commencement date,

an asset held under a finance lease is recognised as a receivable at an amount equal to the
net investment in the lease or the present value of the lease payments receivable and any
unguaranteed residual value. Subsequently, finance income is recognised over the lease

term to reflect a constant periodic rate of return on the net investment in the lease.

A lease is classified as an operating lease if it does not transfer substantially all the risks and
rewards incidental to ownership of an underlying asset to a lessee. Lease receivables from
operating leases is recognised as income in profit or loss on a straight-line basis over

the lease term. Initial direct costs incurred in obtaining an operating lease are added to
the carrying amount of the underlying assets and recognised as an expense over the lease

term on the same basis as the lease income.
5.14 Related party transactions

Related parties comprise individuals or enterprises that control, or are controlled by,
the Group, whether directly or indirectly, or which are under common control with the Group.

They also include associated companies, and individuals or enterprises which directly or

indirectly own a voting interest in the Group that give them significant influence over
the Group, key management personnel, directors, and officers with authority in the planning
and direction of the Group’ operations.

Amata Corporation Public Company Limited 167
14