IMC ANNUALREPORT 2020 - Flipbook - Page 47
IMC ANNUAL REPORT 2021
FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
at cost, which comprises the initial amount of the lease liability adjusted
for any lease payments made at or before the commencement date,
plus any initial direct costs incurred.
The right-of-use asset is subsequently depreciated using the straightline method from the commencement date to the end of the lease term.
In addition, the right-of-use asset is periodically reduced by impairment
losses, if any, and adjusted for certain remeasurements of the lease
liability.
Consolidated
financial statements
Notes to the consolidated
financial statements
Company
financial statements
Other information
Independent Auditor’s report
The lease liability is initially measured at the present value of the lease
payments that are not paid at the commencement date, discounted
using the interest rate implicit in the lease or, if that rate cannot be
readily determined, the Group’s incremental borrowing rate. Generally,
the Group uses its incremental borrowing rate as the discount rate.
The Group determines its incremental borrowing rate by analyzing its
borrowings from various external sources and makes certain
adjustments to reflect the terms of the lease and type of asset leased.
Lease payments included in the measurement of the lease liability
comprise the following:
• fixed payments, including in-substance fixed payments;
• variable lease payments that depend on an index or a rate, initially
measured using the index or rate as at the commencement date;
• amounts expected to be payable under a residual value guarantee;
and
• the exercise price under a purchase option that the Group is
reasonably certain to exercise, lease payments in an optional renewal
period if the Group is reasonably certain to exercise an extension
option, and penalties for early termination of a lease unless the
Group is reasonably certain not to terminate early.
The lease liability is measured at amortized cost using the effective
interest method. It is remeasured when there is a change in future lease
payments arising from a change in an index or rate, if there is a change
in the Group’s estimate of the amount expected to be payable under
a residual value guarantee, if the Group changes its assessment of
whether it will exercise a purchase, extension or termination option or
if there is a revised in-substance fixed lease payment.
When the lease liability is remeasured in this way, a corresponding
adjustment is made to the carrying amount of the right-of-use asset,
or is recorded in profit or loss if the carrying amount of the right-of-use
asset has been reduced to zero.
The Group presents right-of-use assets in “property and equipment”
and lease liabilities in “other liabilities” in the statement of financial
position.
Short-term leases and leases of low-value assets
The Group has elected not to recognize right-of-use assets and lease
liabilities for leases of so-called low-value assets and short-term leases,
including leases of IT equipment. The Group recognizes the lease
payments associated with these leases as an expense on a straight-line
basis over the lease term.
2.14. INCOME TAX
The income tax expense or credit for the period is the tax payable on the
current period’s taxable income based on the applicable income tax rate
for each jurisdiction adjusted for changes in deferred tax assets and
liabilities attributable to temporary differences and to unused tax
losses.
The current income tax charge is calculated on the basis of the tax laws
enacted or substantively enacted at the end of the reporting period in
the countries where the Group’s subsidiaries and associates operate and
generate taxable income. Management periodically evaluates positions
taken in tax returns with respect to situations in which applicable tax
regulation is subject to interpretation. It establishes provisions where
appropriate on the basis of amounts expected to be paid to the tax
authorities.
Deferred income tax is provided in full, using the liability method, on
temporary differences arising between the tax bases of assets and
liabilities and their carrying amounts in the consolidated financial
statements. Deferred income tax is also not accounted for if it arises
from initial recognition of an asset or liability in a transaction other than
a business combination that at the time of the transaction affects
neither accounting nor taxable profit or loss. Deferred income tax is
determined using tax rates (and laws) that have been enacted or
substantially enacted by the end of the reporting period and are
expected to apply when the related deferred income tax asset is realized
or the deferred income tax liability is settled.
47