Vector AR’19 ― notes to the financial statements (continued)
15. Leases CONTINUED 15.5 Transition to NZ IFRS 16 Leases
$M
Operating lease commitment at 30 June 2018 as disclosed in the Group’s financial statements Discounted using the incremental borrowing rate at 1 July 2018
40.2 30.2
0.5
Finance lease liabilities as at 1 July 2018
Recognition exemption for: Short-term leases
(0.5)
13.0
Extension options reasonably certain to be exercised
(2.3)
Net changes in leases
Lease liabilities recognised at 1 July 2018
40.9
Transition
The group applied NZ IFRS 16 from 1 July 2018 using the modified retrospective approach. Leases entered into and identified by the group include property leases, building access rights, and vehicle leases. In assessing whether an arrangement is, or contains a lease, the group considers whether the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset, the group assesses whether: —— the contract involves the use of an identified asset; —— the group has the right to obtain substantially all of the economic benefits from use of the asset throughout the period of use; and —— the group has the right to direct the use of the asset. On transition, the group applied the following practical expedient available from NZ IFRS 16: —— to not recognise right of-use assets and liabilities for short-term leases with lease terms ending within 12 months from the date of transition. The costs related to these leases are recognised in the profit or loss; and —— to not reassess whether an arrangement is, or contains a lease, at the date of transition if such arrangement was previously identified as a lease applying NZ IAS 17 and IFRIC 4. The table below summarises the key impacts on the group’s segment note for the year ended 30 June 2019.
INCREASE / (DECREASE)
Profit or Loss for the year ended 30 June 2019
REGULATED NETWORKS $M
GAS TRADING $M
TECHNOLOGY $M
CORPORATE $M
TOTAL $M
Operating expenses
(1.3)
(1.4)
(4.3)
(1.4)
(8.4)
EBITDA
1.3
1.4
4.3
1.4
8.4
Depreciation and amortisation
1.1 0.4
1.3 0.7
4.2 0.6
1.2 0.3
7.8 2.0
Interest costs
Profit/(loss) before income tax
(0.2)
(0.6)
(0.5)
(0.1)
(1.4)
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