Chemical Company of Malaysia Berhad Annual Report 2019

| Notes to the Financial Statements (continued) | 30. Significant changes in accounting policies (continued) 30.1MFRS 16, Leases (continued) As a lessee (continued) At 1 January 2019, for leases that were classified as operating lease under MFRS 117, lease liabilities were measured at the present value of the remaining lease payments, discounted at the Group entities’ incremental borrowing rate as at 1 January 2019. The weighted-average rate applied is 4.90%. Right- of-use assets are measured at an amount equal to the lease liabilities at 1 January 2019, adjusted by the amount of any prepaid or accrued lease payments. The Group used the following practical expedients when applying MFRS 16 to leases previously classified as operating lease under MFRS 117: - applied a single discount rate to a portfolio of leases with similar characteristics; - applied the exemption not to recognise right-of-use assets and liabilities for leases with less than 12 months of lease term as at 1 January 2019; - excluded initial direct costs frommeasuring the right-of-use asset at the date of initial application; and - used hindsight when determining the lease term if the contract contains options to extend or terminate the lease. 208 CHEMICAL COMPANY OF MALAYSIA BERHAD