Sasbadi Annual Report 2020

SASBADI HOLDINGS BERHAD 106 FINANCIAL STATEMENTS (continued) 9. Right-of-use assets (continued) (c) Depreciation charged during the year Group 2020 RM’000 Condominium 5 Leasehold land 642 Buildings 1,199 Motor vehicles 81 Total 1,927 (d) Extension options Some leases of buildings contain extension options up to 3 years, which are exercisable by the Group before the end of the non-cancellable contract period. Where practicable, the Group seeks to include extension options in new leases to provide operational flexibility. The extension options held are exercisable only by the Group and not by the lessor. The Group assesses at lease commencement whether it is reasonably certain to exercise the extension options. The Group reassesses whether it is reasonably certain to exercise the options if there is a significant event or significant change in circumstance within its control. (e) Significant judgements and assumptions in relation to leases The Group assesses at lease commencement by applying significant judgement whether it is reasonably certain to exercise the extension options. Group entities consider all facts and circumstances including their past practice and any cost that will be incurred to change the asset if an option to extend is not taken, to help it determine the lease term. The Group also applied judgement and assumptions in determining the incremental borrowing rate of the respective leases. Group entities first determine the closest available borrowing rates before using significant judgement to determine the adjustments required to reflect the term, security, value or economic environment of the respective leases.