Page 161 - KWAP_AR2022

FoR BetteR RetuRns Annual Report 2022 159

notes to the
financial statements
for the year ended 31 december 2022

2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2.11 Leases (continued)

(ii) Recognition and initial measurement (continued)

As lessee (continued)
lease payments included in the measurement of the lease liability comprise the following:

• fixed payments, including in-substance fixed payments less any incentives receivable;
• variable lease payments that depend on an index or a rate, initially measured using the index or rate as
at the commencement date;
• amounts expected to be payable under a residual value guarantee;
• the exercise price under a purchase option that the Group is reasonably certain to exercise; and
• penalties for early termination of a lease unless the Group is reasonably certain not to terminate early.

the group excludes variable lease payments that linked to future performance or usage of the underlying
asset from the lease liability. instead, these payments are recognised in profit or loss in the period in which
the performance or use occurs.
the group has elected not to recognise right-of-use assets and lease liabilities for short-term leases that
have a lease term of 12 months or less and leases of low-value assets. the group recognises the lease
payments associated with these leases as an expense on a straight-line basis over the lease term.

As lessor
When the group acts as a lessor, it determines at lease inception whether each lease is a finance lease or
an operating lease.
to classify each lease, the group makes an overall assessment of whether the lease transfers substantially
all of the risks and rewards incidental to ownership of the underlying asset. if this is the case, then the lease
is a finance lease; if not, then it is an operating lease.
if an arrangement contains lease and non-lease components, the group applies mfrs 15: revenue from
contract with customers (mfrs 15) to allocate the consideration in the contract based on the stand-alone
selling prices.

When the group is an intermediate lessor, it accounts for its interests in the head lease and the sublease
separately. it assesses the lease classification of a sublease with reference to the right-of-use asset arising
from the head lease, not with reference to the underlying asset. if a head lease is a short-term lease to which
the group applies the exemption described above, then it classifies the sublease as an operating lease.