UNITY BANK LIMITED 2022 Financial Report
ABN 11 087 650 315 UNITY BANK LIMITED 2022 Financial Report UNITY BANK LIMITED 2022 Financial Report
ABN 11 087 650 315 ABN 11 087 650 315
Short-term leases and leases of low-value assets The Bank has elected to not recognise right-of-use assets and lease liabilities for leases of low-value assets and short-term leases. Payments associated with short-term leases of equipment and all leases of low-value assets are recognised on a straight-line basis as an expense in profit or loss over the lease term. Short-term leases are leases with a lease term of 12 months or less. Low-value assets generally comprise IT equipment and small items of office furniture. Bank as lessor As a lessor the Bank classifies its leases as either operating or finance leases. A lease is classified as a finance lease if it transfers substantially all the risks and rewards incidental to ownership of the underlying As a lessor the Bank classifies its leases as either operating or finance leases. A lease is classified as a finance lease if it transfers substantially all the risks and rewards incidental to ownership of the underlying In determining the lease term, management considers all facts and circumstances that create an economic incentive to exercise an extension option, or not exercise a termination option. Extension options (or periods after termination options) are only included in the lease term if the lease is reasonably certain to be extended (or not terminated). For leases of property the following factors are normally the most relevant: • If there are significant penalties to terminate (or not extend), the Bank is typically reasonably certain to extend (or not terminate). • If any leasehold improvements are expected to have a significant remaining value, the Bank is typically reasonably certain to extend (or not terminate). • Otherwise, the Bank considers other factors including historical lease durations and the costs and business disruption required to replace the leased asset. The Bank assesses at lease commencement date whether it is reasonably certain to exercise the extension options or not exercise a termination option. The lease term is reassessed if an option is actually exercised (or not exercised) or the Bank becomes obliged to exercise (or not exercise) it. The assessment of reasonable certainty is only revised if a significant event or a significant change in circumstances occurs, which affects this assessment, and it is within the control of the lessee. The lease term is reassessed if an option is actually exercised (or not exercised) or the Bank becomes obliged to exercise (or not exercise) it. The assessment of reasonable certainty is only revised if a significant event or a significant change in circumstances occurs, which affects this assessment, and it is within the control of the lessee. asset, and classified as an operating lease if it does not. Critical judgements in determining the lease term asset, and classified as an operating lease if it does not. Critical judgements in determining the lease term e. Provision for employee benefits Provision is made for the Bank ’s liability for employee benefits arising from services rendered by employees to balance date. Short-term employee benefits are current liabilities included in employee benefits, measured at the undiscounted amount that the Group expects to pay as a result of the unused entitlement. Annual Leave is included in ‘other long - term benefit’ and discounte d when calculating the leave liability as the Group does not expect all annual leave for all employees to be used wholly within 12 months of the end of the reporting period. Employee benefits expected to be settled within one year, have been measured at their nominal amount. Annual leave liability is still presented as a current liability for presentation purposes under AASB 101 Presentation of Financial Statements. Short-term employee benefits are current liabilities included in employee benefits, measured at the undiscounted amount that the Group expects to pay as a result of the unused entitlement. Annual Leave is included in ‘other long - term benefit’ and discounte d when calculating the leave liability as the Group does not expect all annual leave for all employees to be used wholly within 12 months of the end of the reporting period. Employee benefits expected to be settled within one year, have been measured at their nominal amount. Annual leave liability is still presented as a current liability for presentation purposes under AASB 101 Presentation of Financial Statements. Other employee benefits payable later than one year have been measured at the present value of the estimated future cash outflows to be made for those benefits discounted using national government bond rates. Provision for long service leave is on a pro-rata basis from commencement of employment with the Bank based on the present value of its estimated future cash flows. Other employee benefits payable later than one year have been measured at the present value of the estimated future cash outflows to be made for those benefits discounted using national government bond rates. Provision for long service leave is on a pro-rata basis from commencement of employment with the Bank based on the present value of its estimated future cash flows. Short-term leases and leases of low-value assets The Bank has elected to not recognise right-of-use assets and lease liabilities for leases of low-value assets and short-term leases. Payments associated with short-term leases of equipment and all leases of low-value assets are recognised on a straight-line basis as an expense in profit or loss over the lease term. Short-term leases are leases with a lease term of 12 months or less. Low-value assets generally comprise IT equipment and small items of office furniture. Bank as lessor In determining the lease term, management considers all facts and circumstances that create an economic incentive to exercise an extension option, or not exercise a termination option. Extension options (or periods after termination options) are only included in the lease term if the lease is reasonably certain to be extended (or not terminated). For leases of property the following factors are normally the most relevant: • If there are significant penalties to terminate (or not extend), the Bank is typically reasonably certain to extend (or not terminate). • If any leasehold improvements are expected to have a significant remaining value, the Bank is typically reasonably certain to extend (or not terminate). • Otherwise, the Bank considers other factors including historical lease durations and the costs and business disruption required to replace the leased asset. The Bank assesses at lease commencement date whether it is reasonably certain to exercise the extension options or not exercise a termination option. e. Provision for employee benefits Provision is made for the Bank ’s liability for employee benefits arising from services rendered by employees to balance date.
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