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NOTES TO THE
FINANCIAL STATEMENTS

for the financial year ended 31 december 2020 (continUed)

2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2.9 (i) Lessee accounting
the Group and the company consider whether a contract is, or contains a lease. a lease is defined as “a contract,
or part of a contract, that conveys the right to use an asset (the underlying asset) for a period of time in exchange
for consideration”.

to apply this definition, the Group and the company assesses whether the contract meets three key evaluations
inteGrated annUal rePort 2020 • the contract contains an identified asset, which is either explicitly identified in the contract or implicitly specified
which are whether:

by being identified at the time the asset is made available to the Group or the company;
• the Group or the Company has the right to obtain substantially all of the economic benefits from use of the
identified asset throughout the period of use, considering its rights within the defined scope of the contract; or

• the Group or the Company has the right to direct the use of the identified asset throughout the period of use.
the Group and the company assesses whether it has the right to direct “how and for what purpose” the asset is
used throughout the period of use.
194
Measurement and recognition of leases as a lessee
at lease commencement date, the Group and the company recognises a right-of-use asset and a lease liability
bimb holdinGS berhad 199701008362 (423858-X) advance of the lease commencement date (net of any incentives received).
on the statement of financial position. the right-of-use asset (“roU”) is measured at cost, which is made up of
the initial measurement of the lease liability, any initial direct costs incurred by the Group and the company, an
estimate of any costs to dismantle and remove the asset at the end of the lease, and any lease payments made in

the Group has elected not to separate the lease and non-lease components for property lease.
the Group and the company depreciates the roU on a straight-line basis from the lease commencement date to
the earlier of the end of the useful life of the roU or the end of the lease term. the Group and the company also
assesses the roU for impairment when such indicators exist.
at the commencement date, the Group and the company measures the lease liability at the present value of

the lease payments unpaid at the date, discounted using the profit rate implicit in the lease if that rate is readily
available or the Group and the company incremental financing rate.
lease payments included in the measurement of the lease liability are made up of fixed payments (including in
substance fixed), variable payments based on an index or rate, amounts expected to be payable under a residual
value guarantee and payments arising from options reasonably certain to be exercised.

Subsequent to initial measurement, the liability will be reduced for payments made and increased for profit
expense. it is remeasured to reflect any reassessment or modification, or if there are changes in in-substance fixed
payments.
When the lease liability is remeasured, the corresponding adjustment is reflected in the roU, or profit and loss if
the roU is already reduced to zero.

the Group and the company has elected to account for short-term leases and leases of low-value assets using
the practical expedients. instead of recognising a roU and lease liability, the payments in relation to these are
recognised as an expense in profit or loss on a straight-line basis over the lease term.