Gardens By the Bay 2019/2020

FINANCIAL STATEMENTS 106 NOTES TO FINANCIAL STATEMENTS 31 March 2020 (a) Impact of the new definition of a lease The Company has made use of the practical expedient available on transition to FRS 116 not to reassess whether a contract is or contains a lease. Accordingly, the definition of a lease in accordance with FRS 17 and INT FRS 104 will continue to be applied to those leases entered or changed before 1 April 2019. The change in definition of a lease mainly relates to the concept of control. FRS 116 determines whether a contract contains a lease on the basis of whether the customer has the right to control the use of an identified asset for a period of time in exchange for consideration. This is in contrast to the focus on ‘risks and rewards’ in FRS 17 and INT FRS 104. The Company applies the definition of a lease and related guidance set out in FRS 116 to all lease contracts entered into or modified on or after 1 April 2019 (whether it is a lessor or a lessee in the lease contract). The new definition in FRS 116 does not significantly change the scope of contracts that meet the definition of a lease for the Company. (b) Impact on lessee accounting Former operating leases FRS 116 changes how the Company accounts for leases previously classified as operating leases under FRS 17, which were off-balance-sheet. Applying FRS 116 for all leases (except as noted below), the Company: a) Recognises right-of-use assets and lease liabilities in the statement of financial position, initially measured at the present value of the remaining lease payments, with the right-of-use asset adjusted by the amount of any prepaid or accrued lease payments in accordance with FRS 116:C8(b)(ii); b) Recognises depreciation of right-of-use assets and interest on lease liabilities in the statement of comprehensive income; and c) Separates the total amount of cash paid into a principal portion (presented within financing activities) and interest (presented within operating activities) in the statement of cash flows. Lease incentives (e.g. free rent period) are recognised as part of the measurement of the right-of-use assets and lease liabilities whereas under FRS 17 they resulted in the recognition of a lease incentive liability, amortised as a reduction of rental expense on a straight-line basis. Under FRS 116, right-of-use assets are tested for impairment in accordance with FRS 36 Impairment of Assets . For short-term leases (lease term of 12 months or less) and leases of low-value assets, the Company has opted to recognise lease expense on a straight-line basis as permitted by FRS 116. This expense is presented within other expenses in the statement of comprehensive income.