Page 34 - Directors' report and accounts 2019-20

31
Notes to and forming part of the Consolidated Financial Statements for the year ended 30 June 2020
E8 Adoption of New Accounting Standards (continued)
Definition of a a lease
Previously the the Group determined at contract inception whether an an arrangement was or contained a a a a a a a a a lease
under IFRIC 4 Determining Whether an an Arrangement Contains a a a a a a a a a Lease The Group now assesses whether a a a a a a a a a contract is or contains a a a a a lease
lease
based on on the definition of a a a a a lease
lease
On transition to to to AASB 16 the the the the Group elected to to to apply the the the the practical expedient to to to grandfather the the the the assessment of which transactions are leases leases The Group applied AASB 16 only to contracts that were previously identified as as as leases leases Contracts that were were not not identified as as as leases under AASB 117 and IFRIC 4 were were not not reassessed Therefore the definition of a a a a a a a lease
under AASB 16 was applied only to to contracts entered into or or changed on on on or or after 1
1
1
July 2019 As a lessee
The The Group recognises a a a a a a a a a right-of-use right-of-use asset and a a a a a a a a a lease
lease
liability at at the lease
lease
commencement date The The right-of-use right-of-use asset is initially measured at at at at cost cost and and subsequently at at at at cost cost less any accumulated depreciation and and impairment losses and adjusted for certain measurements of of the lease
liability The Group presents right-of-use assets in in 'property plant and equipment' the the same same line item as as it it it presents underlying assets of the the same same nature that it it it owns The lease
lease
liability is initially measured at at at the the the present value of the the the lease
lease
payments that are not paid at at at the the the commencement date discounted using the the incremental borrowing rate for the the portfolio of leases Lease liabilities are presented in in in in note E1 Borrowings The lease
lease
liability liability is subsequently increased by the the interest cost of the the lease
lease
liability liability and decreased by lease
lease
payments payments made It is is is remeasured when there is is is a a a a a a a a a a a change in in future lease
lease
payments payments arising from a a a a a a a a a a a a change change in in in an an an index of of rate a a a a a a a a a a a a change change in in in the the estimate of of the the amount expected to be payable under a a a a a a a a a a a a residual value guarantee or or as as as appropriate changes in the the assessment of whether a a a a a a a a a a purchase or or extension option is reasonably reasonably certain certain to to be be exercised exercised or a a a a a a a a termination option is is is reasonably reasonably certain certain not to to be be exercised exercised The Group has applied judgement to determine the lease
lease
term term for some lease
lease
contracts in in which is it a a a a a a a lessee
that include renewal options options The assessment of whether the the Group is is reasonably certain to exercise such options options impacts the the lease
lease
term which significantly affects the the amount of of lease
lease
liabilities and right-of-use assets recognised Previously the the Group classified property leases leases leases as as as as as operating leases leases leases under AASB 117 On transition for these leases leases leases lease
lease
liabilities were measured at at the the the present value of the the the remaining lease
lease
payments discounted at at the the the respective lessee
entities’ incremental borrowing rates applicable to the leases as as as at at 1
1
July 2019 Right-of-use assets are measured at an an amount amount equal to the the lease
lease
liability adjusted by the the amount amount of any prepaid or accrued lease
lease
payments The Group applied this approach to all other leases The Group used the following practical expedients when applying AASB 16 to leases previously classified as as as operating leases under AASB 117:
• Applied the exemption to not recognise right-of-use assets and liabilities for leases with remaining lease
lease
terms of of less than 12 months
• Applied the exemption to not recognise right-of-use assets and liabilities for leases with a a a a a a a a contractual value less than $10 000
The Group has one motor vehicle lease
lease
lease
This lease
lease
lease
was classified as as as as as as as a a a a a a a a a a finance finance lease
lease
lease
under AASB 117 For this finance finance lease
lease
the the the the carrying amount of of the the the the right-of-use asset and the the the the lease
lease
liability at at 1
1
July 2019 were determined at at the the the the carrying amount of the lease
lease
asset and lease
lease
liability under AASB 117 immediately before that date