Page 186 - UBP - IR2020

FINANCIAL STATEMENTS
Notes to the financial statements
For the year ended June 30 2020
2 ACCOUNTING POLICIES (CONTINUED)
2 4 CHANGES IN IN IN ACCOUNTING POLICIES AND DISCLOSURES (CONTINUED)
APPLICATION OF NEW AND AND REVISED INTERNATIONAL FINANCIAL REPORTING STANDARDS (IFRSs) (CONTINUED)
Impact of of application of of IFRS 16 – Leases
In the the the the current year the the the the Group and the the the the Company have applied IFRS 16 16 Leases
(as issued by the the the the IASB in January 2016) that is is effective for an an an annual period that begins on or or after January 01 01 2019 IFRS 16 introduces introduces new or amended requirements with respect to to lease accounting It introduces introduces significant changes to to the lessee accounting by removing the the distinction between operating and finance lease requiring the the recognition of of a a a a a a right-of- use asset asset and and a a a a a a a a a a a a a lease lease lease lease liability at commencement for for all leases leases leases except for for short-term leases leases leases and and leases leases leases of low value assets In contrast to lessee accounting accounting the the requirements for lessor accounting accounting have remained largely unchanged Details of these new requirements are described in note 2 3 The impact of of the the the adoption of of IFRS 16 on on the the the Group’s and the the the Company’s financial statements
are as follows:
The date of of initial application of of IFRS 16 for the the Group and the the Company is July 01 01 2019 The Group and the the Company have applied IFRS 16 using the the cumulative catch-up approach which:
• requires the the the Group and the the the Company to recognise the the the cumulative effect of initially applying IFRS 16 as an an an adjustment to the the opening balance of of retained earnings at at at the the date of of initial application • does not permit the restatement of comparatives which continue to be presented under IAS 17 and IFRIC 4 Impact of of the new definition of of a a a lease The Group and the the Company has made use of the the practical expedient available on on transition to to IFRS 16 not to to reassess whether a a a a a a a a a a contract is or or or contains a a a a a a a a a a lease lease Accordingly the the definition of a a a a a a a a a a lease lease in in fin in accordance with IAS 17 and IFRIC 4 will continue to to be be applied to to those leases entered or or modified before July 01 01 2019 The change in fin in in in definition of of a a a a a a a a lease mainly relates to the the concept of of control IFRS 16 determines whether a a a a a a a a contract contains a a a a a a a lease on on the the the the the basis of of of whether the the the the the customer has the the the the the right to to control the the the the the use of of of an identified asset for a a a a a a a period of of of time in exchange for consideration This is is is in in contrast to the focus on on on on ‘risks and and rewards’ in in IAS 17 and and IFRIC 4 The Group and and the the Company applied the the definition of a a a a a a a a a a a lease lease and and related guidance set out fin in IFRS 16 to all lease lease contracts entered into or or or or modified on on on or or or or after July 01 01 2019 (whether it it a a a a a lessor or or or or a a a a a lessee in in fin the the lease contract) The new definition in fin IFRS 16 has not significantly changed the the the the scope of of contracts that meet the the the the definition of of a a a a a a a a lease for the the the the Group and the the the the Company Impact on Lessee Accounting
i) Former operating leases IFRS 16 changes how the the Group and the the Company account for lease lease previously classified as as as as operating leases under IAS 17 which were off balance-sheet Applying IFRS 16 for all leases (except as as noted below) the the Group and the the Company:
a) Recognises right-of-use assets and and lease liabilities in fin in the the Group and and the the Company statement of of financial position initially measured at the present value of future lease payments b) Recognises depreciation of of of o right-of-use assets and and interest on on lease liabilities in in the the statement of of of o profit or loss and and other comprehensive income and c) Separates the total amount of cash paid into a a a a a a a a a a a principal portion (presented within financing activities) and interest (presented within operating activities) in in in the statement of cash flows 186 - UBP INTEGRATED REPORT 2020