Exxaro Resources Limited
Annual Financial Statements 2022
A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.
At inception, or upon reassessment, of a contract that contains a lease component, the consideration in the contract is allocated to each lease and non-lease component on the basis of their relative standalone prices.
An accounting policy choice was made not to apply IFRS 16 Leases to leases of intangible assets.
A lease is recognised as a lease liability and corresponding right-of-use asset at the commencement date of the lease. Each lease payment is allocated between the settlement of the lease liability and finance costs. The finance costs are charged to profit or loss over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the lease liability for each period. The right-of-use asset is depreciated over the shorter of the asset's useful life and the lease term on a straight-line basis, except when there is a purchase option which is expected to be exercised, in which case it is depreciated over the asset's useful life.
Non-lease components, contained in a lease, are recognised as an expense in profit or loss when incurred.
| Right-of-use assets | Lease liabilities |
Measured at cost which is:
|
Measured at the present value of the following lease payments:
|
| Right-of-use assets | Lease liabilities |
| The right-of-use asset is measured applying the cost model where a right-of-use asset falls
within the scope of IAS 16 Property, Plant and Equipment. Measured at:
|
The lease liability is measured by:
|
| Useful lives | 2022 | 2021 | Incremental borrowing rates | 2022 | 2021 |
| Land and buildings | 10 to 30 years | 10 to 30 years | Lease term greater than 12 months but less than 18 months | 7.85% | 7.85% |
|---|---|---|---|---|---|
| Residential land and buildings | 2 years | 2 years | Lease term greater than 18 months | 8.97% to 10.43% | 6.09% to10.43% |
| Buildings and infrastructure | 3 to 10 years | 3 to 10 years | |||
| Machinery, plant and equipment | 3 to 5 years | 3 to 5 years |
Payments associated with short-term leases and leases of low-value assets are recognised on a straight-line basis, over the lease term, as an expense in profit or loss. Short-term leases are leases with a lease term of 12 months or less. Leases of low-value assets comprise IT equipment, furniture, fittings and appliances as well as tools and other small equipment. Refer note 6.1.3.
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