Page 20 - KELAG Annual Report 2017
P. 20

result in an increase in total assets through the capitalisation of the right to use the underlying
           asset and the concurrent recognition of a lease liability equivalent to the present value of the lease
           payment.  While  the  right-of-use  asset  is  subsequently  depreciated,  the  lease  liability  is
           remeasured using valuation techniques. There are simplification options for short-term leases and
           low-value leased assets.

           Central database solutions to administer and recognise leases in the KELAG Group in future are
           currently  being  examined  in  the  group-wide  IFRS  16  conversion  project.  At  the  same  time,
           relevant contracts are undergoing inspection and their content reviewed pursuant to the criteria
           in  IFRS  16. The  new  IFRS  16  regulations  will  result  in  an  increase  in  total  assets,  lower  other
           operating expenses and increased depreciation and interest expenses and the postponement of
           lease expenses until the inception of the respective contractual term. However, based on the
           information at hand, it is assumed that the implementation of IFRS 16 will not have any significant
           effects on the equity ratio.

           The first-time application of IFRS 16 within the KELAG Group will be retroactive in the financial
           year 2019. The cumulative adjustment amounts will be recorded at the time of initial application.
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