BARBADOS PUBLIC WORKERS’ CO-OPERATIVE CREDIT UNION LIMITED | CONSOLIDATED ANNUAL REPORT 2020 30 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) 13 2. Accounting Policies, continued (b) New standards, amendments and interpretations mandatory for the first time for the financial year, continued Right-of-use assets are measured at their carrying amount as if IFRS 16 had been applied since the commencement date, discounted using the Group’s incremental borrowing rate at the date of initial application. The Group used a number of practical expedients when applying IFRS 16 to leases previously classified as operating leases under IAS 17. In particular, the Group: • relied on its assessment of whether leases are onerous under IAS 37Provisions, Contingent Liabilities and Contingent Assets immediately before the date of initial application as an alternative to performing an impairment review; • did not recognise right-of-use assets and liabilities for leases for which the lease term ends within 12 months of the date of initial application; • did not recognise right-of-use assets and liabilities for leases of low-value assets (i.e. IT equipment); • excluded initial direct costs from measuring the right-of-use asset at the date of initial application; and • used hindsight when determining the lease term. As a lessor The Group leases out commercial motor vehicles. The Group classified these leases as finance leases of property and equipment in note 2(i) and 14. The Group is not required to make any adjustments on transition to IFRS 16 for leases in which it acts as a lessor. The Group has applied IFRS 15Revenue from Contracts with Customers to allocate consideration in the contract to each lease and non-lease component. Impact on consolidated financial statements Impact on transition On transition to IFRS 16, the Group recognised additional right-of-use assets and additional lease liabilities, recognising the difference in retained earnings. The impact on transition is summarised below: April 1, 2019 Right-of-use assets presented in property and equipment $ 6,212,367 Lease liabilities 6,308,772 Retained earnings (96,402) When measuring lease liabilities for leases that were classified as operating leases, the Group discounted lease payments using its incremental borrowing rate at April 1, 2019. The weighted-average rate applied is 4.95%.
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