Page 22 - Annual Report KELAG Group 2018
P. 22

Amendments: Long-term
            IAS 28   Interests in Associates and   12/10/2017    01/01/2019   None
                   Joint Ventures
                   Amendments: Prepayment   12/10/2017
            IFRS 9   Features with Negative   (22/03/2018)   01/01/2019   None
            IFRS 16   Leases                           01/01/2019     See below
                   Uncertainty over Income   07/06/2017
            IFRIC 23                                   01/01/2019     See below
                   Tax Treatments        (23/10/2018)

           IFRS 16 will replace IAS 17, IFRIC 4, SIC 15 and SIC 27 for financial years beginning on or after
           1 January 2019 and provides that, in future, the lessee must recognise all leases and all associated
           contractual rights and obligations. The changes to the recognition requirements for the lessor are
           minimal. Lease agreements that had previously, that is under IAS 17, been classified by lessees as
           operating leases are now, under IFRS 16, treated similarly to finance leases under IAS 17. Leases
           reclassified in this way 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 amortised, the
           lease liability is arithmetically remeasured. There are simplification options for short-term leases
           and leased assets of low value, for which IFRS 16 provides recognition exemptions. The KELAG
           Group will make use of the two practical expedients and therefore continue to recognise the
           corresponding lease payments from the contracts concerned through profit or loss.

           IFRS 16 still requests that lessors differentiate between finance leases and operating leases for
           accounting purposes. In this case, the accounting model of IFRS 16 does not significantly differ
           from that in IAS 17 Leases.

           The first-time application of IFRS 16 within the KELAG Group will be made retrospectively in the
           financial year 2019. The cumulative adjustment amounts will be recorded at the time of initial
           application. Based on the current findings from the implementation project, right-of-use assets
           and  lease  liabilities  of  roughly  EUR 10.5m  will  be  recognised.  This  increase  in  total  assets
           associated with IFRS 16 would cause the net gearing ratio to increase by an insignificant amount
           of 1.17 percentage points as of 31 December 2018. The contracts subject to accounting changes
           pursuant to IFRS 16 compared to the previous standard IAS 17 primarily relate to leases for land,
           floor space, radio transmission sites, vehicles as well as office equipment.
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