2019 Annual Report (^109)
The Group has made the following adjustments in
the presentation of financial statements as a result
of the adoption of IFRS 16 at January 1, 2019:
■ Right-of-use assets and Lease liabilities
are presented separately in the Group’s
consolidated statement of financial position.
■ Prepayments for land-use-rights which were
separately presented as Long-term leasehold
prepayments (see note 3(h)), together with
other lease prepayments which were previously
included in Other assets, are now included in
Right-of-use assets.
■ Accrued lease payments, which were previously
included in Other liabilities are now included in
Lease liabilities.
■ Cash payments under operating leases, which
were classified within operating activities in
the Group’s consolidated statement of cash
flows under IAS 17, are now classified within
financing activities under IFRS 16, except for
short-term leases and leases of low-value
assets.
As a lessor
IFRS 16 has not significantly changed accounting
for lessors, in particular retaining the distinction
between finance leases and operating leases. The
adoption of IFRS 16 did not lead to a material
change in accounting for leases in which the
Group is a lessor.
Impacts on transition
At transition, for leases that were operating leases
under IAS 17, lease liabilities are recognised and
measured at the present value of the remaining
lease payments, discounted at the Group’s
incremental borrowing rates as at January 1, 2019.
The Group elected to measure the right-of-use
assets under these operating leases at an
amount equal to the lease liability, adjusted by
the amounts of any prepaid or accrued lease
payments relating to that lease.
The Group has tested its right-of-use assets for
impairment on the date of transition and has
concluded that there was no indication that the
right-of-use assets were impaired.
The Group used the following practical expedients
when applying IFRS 16 to leases classified as
operating leases under IAS 17 before January 1,
- In particular, the Group
■ did not recognise right-of-use assets and
liabilities for leases with remaining lease term
of less than 12 months from the date of initial
application;■ did not recognise right-of-use assets and
liabilities for leases of low value assets;■ excluded initial direct cost from measuring
the right-of-use assets at the date of initial
application; and■ used hindsight when determining the lease
term if the contract contains options to extend
or terminate the lease.