29 BARBADOS PUBLIC WORKERS’ CO-OPERATIVE CREDIT UNION LIMITED | CONSOLIDATED ANNUAL REPORT 2020 BARBADOS PUBLIC WORKERS’ CO-OPERATIVE CREDIT UNION LIMITED Notes to the Consolidated Financial Statements For the year ended March 31, 2020 (Expressed in Barbados dollars) 12 2. Accounting Policies, continued (b) New standards, amendments and interpretations mandatory for the first time for the financial year A number of new standards, amendments to standards and interpretations are effective for annual periods beginning on or after January 1, 2019 and have been applied in preparing these consolidated financial statements. None of these have a significant effect on the consolidated financial statements except IFRS 16 disclosed below: IFRS 16 replaced leases guidance IAS 17 Leases , IFRIC 4 Determining whether an Arrangement contains a Lease , SIC-15 Operating Leases – Incentives and SIC-27 Evaluating the Substance of Transactions Involving the Legal Form of a Lease . IFRS 16 introduced a single, on-balance sheet lease accounting model for lessees. A lessee recognises a right-of-use asset representing its right to use the underlying asset and a lease liability representing its obligation to make lease payments. There are recognition exemptions for short-term leases and leases of low-value items. Lessor accounting remains similar to the previous standard – i.e. lessors continue to classify leases as finance or operating leases. The Group applied IFRS 16 using the modified retrospective approach, under which the cumulative effect of initial application is recognised in retained earnings at April 1, 2019. Accordingly, the comparative information presented for 2018 is not restated – i.e. it is presented, as previously reported, under IAS 17 and related interpretations. The details of the changes in accounting policies are disclosed below. Additionally, the disclosure requirements in IFRS 16 have not generally been applied to comparative information. Definition of a lease Previously, the Group determined at contract inception whether an arrangement was or contained a lease under IFRIC4Determining whether an Arrangement contains a Lease . The Group now assesses whether a contract is or contains a lease based on the definition of a lease as explained in Note 2(i). On transition to IFRS 16, the Group elected to apply the practical expedient to grandfather the assessment of which transactions are leases. The Group applied IFRS 16 only to contracts that were previously identified as leases. As a lessee As a lessee, the Group leases branches and office space. The Group previously classified these leases as operating leases under IAS 17 based on its assessment of whether the lease transferred significantly all of the risk and rewards incidental to ownership of the underlying asset of the Group. Under IFRS 16, the Group recognises right-of-use assets and lease liabilities for leases of branches and office premises. At commencement or on modification of a contract that contains a lease component, the Group allocates the consideration in the contract to each lease component on the basis of its relative standalone price. However, for leases of property the Group has elected not to separate non-lease components and account for the lease and associated non-lease components as a single lease component. On transition, for these leases, lease liabilities were measured at the present value of the remaining lease payments, discounted at the Group’s incremental borrowing rate as at April 1, 2019.
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