Notes to the Financial Statements
31 December 2015
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2.21 Leases
The determination of whether an arrangement is, or contains a lease, is based on the substance of the
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an arrangement.
For arrangements entered into prior to 1 January 2005, the date of inception is deemed to be 1 January 2005 in
accordance with the transitional requirements of INT FRS 104.
(i)
As lessee
Finance leases, which transfer to the Group substantially all the risks and rewards incidental to ownership
of the leased item, are capitalised at the inception of the lease at the fair value of the leased asset or, if
lower, at the present value of the minimum lease payments. Any initial direct costs are also added to the
amount capitalised.
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achieve a constant rate of interest on the remaining balance of the liability. Finance charges are charged
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incurred.
Capitalised leased assets are depreciated over the shorter of the estimated useful life of the asset and the
lease term, if there is no reasonable certainty that the Group will obtain ownership by the end of the lease
term.
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rental expense over the lease term on a straight-line basis.
(ii)
As lessor
Leases in which the Group does not transfer substantially all the risk and rewards of ownership of the
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added to the carrying amount of the leased asset and recognised over the lease term on the same bases
as rental income. The accounting policy for rental income is set out in Note 2.22(iii). Contingent rents are
recognised as revenue in the period in which they are earned.
ANNUAL REPORT 2015
55
