Page 148 - DUT Annual Report 2020

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DURBAN UNIVERSITY OF TECHNOLOGY ANNUAL REPORT 2020
DURBAN UNIVERSITY OF TECHNOLOGY
NOTES TO THE CONSOLIDATED ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2020
12. LEASE LIABILITY
Opening balance 1 January 2020 Adoption of IFRS 16
Additions during the year Interest expense Payments during the year
Net liability as at 31 December 2020
Non-current liability Current liability
2020 2019 R’000 R’000
4 355 -
3 851 776 (2 852)
6 130
3 034 3 096
6 130
- 4 940
619
516 (1 720)
4 355
3 096 1 259
4 355
Lease modifications are accounted for as separate leases if the modification increases the scope of the lease by adding the right to use one or more underlying assets and the consideration for the lease increases by an amount commensurate with the stand-alone price for the increase in scope. Lease modifications that do not give rise to a separate lease are accounted for by adjusting the right-of-use asset
University as the lessee
Upon lease commencement, the University recognizes a right-of-use asset and a finance lease liability. The right- of-use asset is initially measured at the carrying amount of the finance lease liability plus any initial direct costs incurred by the University. Adjustments for lease incentives, payments at or commencement of the lease and restoration obligations are added to the carrying amount of the right-of-use asset where applicable
The finance lease liability is initially measured at the present value of the lease payments payable over the lease term, discounted at the rate implicit in the lease or, where this cannot be determined, at the University’s incremental borrowing rate. After lease commencement, the lessee measures the finance lease liability by increasing the carrying amount to reflect interest on the finance lease liability and reducing the carrying amount to reflect the lease payments made.
The subsequent finance lease liability is remeasured to reflect changes in:
• The lease term using the revised discount rate.
• Assessment of any purchase options.
• Amounts payable or expected to be payable under residual value guarantees.
All subsequent remeasurements are treated as adjustments to the right-of-use assets. Where the right-of-use asset value is nil, any adjustment is recognised in net surplus or deficit.
Expenses relating to short term leases of 12 months or less are written off to net surplus or deficit.
University as the lessor
Leases where the University does not transfer substantially all the risks and benefits of ownership of the asset are classified as operating leases. Lease income from operating leases is recognised in income on a straight-line basis over the lease term.