|
(5)
|
Notes to Interim Condensed Consolidated Financial Statements - Unaudited
|
Notes for change in significant accounting policies
The significant accounting policies adopted in the preparation of the unaudited interim condensed consolidated financial statements are consistent with those
followed in the preparation of the Group’s annual consolidated financial statements for the year ended December 31, 2018, except for the adoption of new and revised IFRS standards effective as of January 1, 2019.
The impacts of the adoption of new and revised IFRS issued by the International Accounting Standards Board that are mandatorily effective for an accounting
period that begins on or after January 1, 2019 on the Group’s unaudited interim condensed consolidated financial statements as of and for the three-month periods ended March 31, 2018 and 2019 and annual consolidated financial
statements for the year ended December 31, 2018 are as follows:
IFRS16
Leases
The Group has adopted IFRS 16
Leases
from the fiscal year beginning January 1, 2019. The Group has applied the modified retrospective method
permitted by IFRS 16 and recognized the cumulative amount of the impact as of January 1, 2019 upon adoption of the standard. As a result, the Group has not restated the amounts in the comparative reporting period prior to adoption of IFRS 16.
IFRS 16 sets out the principal for the recognition, measurement, presentation and disclosure of lease contracts for lessees and lessors. Under IFRS 16,
lessees no longer make a distinction between finance and operating leases as required under IAS 17, and apply a single accounting model. At the commencement date of a lease, lessees recognize a liability to make lease payments (i.e., the lease
liability) and an asset representing the right to use the underlying asset during the lease term (i.e., the
right-of-use
assets). Subsequently, lessees are required to
recognize separately the interest expense on the lease liability and the depreciation expense on the
right-of-use
assets. The
right-of-use
assets are depreciated on a straight-line basis over the shorter of the estimated useful life of the assets or the lease term. Lessors accounting under IFRS 16 remains substantially unchanged
from IAS 17.
Upon the adoption of IFRS 16, the Group recognized lease liabilities for its leases previously classified as operating lease under IAS 17.
The lease liabilities were measured at the present value of the remaining lease payments, discounted at the incremental borrowing rate as of January 1, 2019. The weighted average incremental borrowing rate used for the lease liabilities as of
January 1, 2019 was 2.21%.
The Group applied the following practical expedients permitted by IFRS 16 when applying IFRS 16:
|
|
-
|
Relied on its assessment of whether leases are onerous applying IAS 37 immediately before the date of initial
application as an alternative to an impairment review.
|
|
|
-
|
Accounted operating leases with less than 12 months of lease term remaining as of January 1, 2019 for as
short-term leases.
|
|
|
-
|
Used hindsight when determining the lease term of contract including extension options and/or termination
options.
|
The Group elected not to apply IFRS 16 to the agreements that were not identified as containing a lease component applying IAS
17 and IFRIC 4
Determining whether an Arrangement contains a Lease
.
|
|
|
|
|
|
|
(In millions of yen)
|
|
|
|
|
|
|
|
Commitments for operating lease as of December 31, 2018 as disclosed in the Group’s
consolidated financial statements
|
|
|
58,688
|
|
|
(Less) Short-term leases recognized as an expense on a straight-line basis
|
|
|
(549
|
)
|
|
(Less) Leases of
low-value
assets recognized as an expense
on a straight-line basis
|
|
|
(29
|
)
|
|
(Less) Lease contracts start on or after January 1, 2019
|
|
|
(2,802
|
)
|
|
|
|
|
|
|
|
Lease liabilities before discounts
|
|
|
55,308
|
|
|
Discounts using the Group’s incremental borrowing rate
|
|
|
(6,998
|
)
|
|
|
|
|
|
|
|
Lease liabilities recognized at January 1, 2019
|
|
|
48,310
|
|
|
|
|
|
|
|
As a result of above, the Group recognized 48,245 million yen 48,310 million yen for the
right-of-use
assets and lease liabilities, respectively, in the Consolidated Statement of Financial Position as of January 1, 2019.
Due to the adoption of IFRS 16, the infrastructure and communication expenses which included operating lease expenses, and other operating expenses decreased
by 263 million yen and 2,248 million yen, respectively for the three-month period ended March 31, 2019. The depreciation and amortization expenses which included the depreciation expenses of
right-of-use
assets, and finance costs which included interest expenses for lease liabilities increased by 2,394 million yen and 268 million yen, respectively for the three-month period ended
March 31, 2019.
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