Integrated report 2019
Exxaro Resources Limited
Group and company annual financial statements
for the year ended 31 December 2019
(a) Useful lives of right-of-use assets
In determining the useful lives of right-of-use assets, management considers all available information about the lease term as well as the asset’s useful life itself. The estimated useful lives of right-of-use assets are determined on the same basis as those of property, plant and equipment.
(b) Incremental borrowing rates
In determining the incremental borrowing rates, management considers the term of the lease, the nature of the asset being leased and the funding strategy and principles applied by the group’s treasury department.
(c) Extensions and termination options
In determining the lease term, management considers all facts and circumstances that create an economic incentive to exercise an extension option, or not exercise a termination option. Extension options (or periods after termination options) are only included in the lease term if the lease is reasonably certain to be extended (or not terminated). The assessment is reviewed if a significant event or a significant change in circumstances occurs which affects this assessment and that is within the control of the lessee.
