20974 29Metals AR23 WEB V1 - Flipbook - Page 170
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29Metals 2023 Annual Report
Consolidated Financial Statements continued
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29Metals Appendix 4E and Annual Financial Report for 29Metals Limited and its Controlled Entities for the year ended 31 December 2023
Consolidated Financial Statements
Note 20: Right-of-use assets (continued)
Recognition and measurement – Group as lessee (continued)
(ii) Lease liabilities
t the commencement date of the contract identified as containing a lease, the Group recognises ease liabilities measured at the present value of lease
payments to be made over the lease term he lease payments include fi ed payments (including in substance fi ed payments) less any lease incentives
receivable, variable lease payments that are based on an inde or rate and amounts e pected to be paid under residual value guarantees he lease
payments also include the e ercise price of a purchase option reasonably certain to be e ercised by the Group and payments of penalties for terminating
a lease, if the lease term reflects the Group e ercising the option to terminate he variable lease payments that do not depend on an inde or a rate are
recognised as an e pense in the period on which the event or condition that triggers the payment occurs
In calculating the present value of lease payments, the Group uses the incremental borrowing rate (‘/Z’, refer discussion below) at the lease
commencement fter the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease
payments made In addition, the carrying amount of lease liabilities is remeasured if there is a modification, a change in the lease term, a change in the in
substance fi ed lease payments or a change in the assessment to purchase the underlying asset
(iii) Short-term leases and leases of low-value assets
ayments associated with short term leases and leases of low value assets are recognised on a straight line basis as an e pense in the onsolidated
tatement of omprehensive Income hort term leases are leases with a lease term of months or less from the commencement date and do not
contain a purchase option ow value assets comprise office e uipment
Significant accounting judgements
Lease term
In determining the lease term, management considers all facts and circumstances that create an economic incentive to e ercise an e tension option, or
not e ercise a termination option tension options (or periods after termination options) are only included in the lease term if the lease is reasonably
certain to be e tended (or not terminated) his determination is reviewed if a significant event or a significant change in circumstances occurs that is
within the control of the lessee
Significant accounting estimates and assumptions
Estimation of the incremental borrowing rate to measure Lease liabilities
he Group cannot readily determine the interest rate implicit in its leases herefore, it uses the relevant I to measure ease liabilities he I is the
rate of interest that the Group would have to pay to borrow over a similar term, and with a similar security, the funds necessary to obtain an asset of a
similar value to the right of use asset in a similar economic environment he I , therefore, reflects what the Group would have to pay, which re uires
estimation when no observable rates are available and to ma e ad ustments to reflect the terms and conditions of the lease
efer to ote
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for ease liabilities
