Yinson Annual Report 2020

235 Annual Report 2020 3. Standards, amendments to published standards and interpretations, which are applicable and adopted by the Group and the Company (continued) Adoption of MFRS 16 (continued) (a) The Group as a lessee (i) Leases classified as operating leases under MFRS 117 On adoption of MFRS 16, the Group and the Company recognised lease liabilities in relation to leases which had previously been classified as ‘operating leases’ under the principles of MFRS 117. These liabilities were measured at the present value of the remaining lease payments, discounted using the lessee’s incremental borrowing rate as of 1 February 2019. The associated right-of-use assets were measured at the amount equal to the lease liability, adjusted by the amount of any prepaid or accrued lease payments relating to that lease recognised in the statements of financial position of the Group and the Company as at 1 February 2019. In applying MFRS 16 for the first time, the Group and the Company have applied the following practical expedients permitted by the standard to leases previously classified as operating leases under MFRS 117: • the use of a single discount rate to a portfolio of leases with reasonably similar characteristics; • reliance on previous assessments on whether leases are onerous; • the accounting for operating leases with a remaining lease term of less than 12 months as at 1 February 2019 as short-term leases; • the exclusion of initial direct costs for the measurement of the right-of-use asset at the date of initial application; and • the use of hindsight in determining the lease term where the contract contains options to extend or terminate the lease. (ii) Leases classified as finance leases under MFRS 117 For leases previously classified as finance leases and presented as a part of ‘Property, plant and equipment’, the Group and the Company recognised the carrying amount of the lease asset and lease liability immediately before transition which were measured applying MFRS 117 as the carrying amount of the right-of-use asset and the lease liability at the date of initial application. (b) The Group as a lessor There are no material changes to accounting by the Group as a lessor upon adoption of MFRS 16.