Gardens By the Bay 2019/2020

GARDENS BY THE BAY ANNUAL REPORT 2019/20 107 NOTES TO FINANCIAL STATEMENTS 31 March 2020 The Company has used the following practical expedients when applying the cumulative catch-up approach to leases previously classified as operating leases applying FRS 17. • The Company has applied a single discount rate to a portfolio of leases with reasonably similar characteristics. • The Company has elected not to recognise right-of-use assets and lease liabilities to leases for which the lease term ends within 12 months of the date of initial application. • The Company has excluded initial direct costs from the measurement of the right-of-use asset at the date of initial application. • The Company has used hindsight when determining the lease term when the contract contains options for extension or termination of the lease. (c) Impact on Lessor Accounting FRS 116 does not change substantially how a lessor accounts for leases. Under FRS 116, a lessor continues to classify leases as either finance leases or operating leases and account for those two types of leases differently. However, FRS 116 has changed and expanded the disclosures required, in particular regarding how a lessor manages the risks arising from its residual interest in leased assets. (d) Financial impact of initial application of FRS 116 The weighted average lessee’s incremental borrowing rate applied to lease liabilities recognised in the statement of financial position on 1 April 2019 is 1.90%. The following table shows the operating lease commitments disclosed applying FRS 17 at 31 March 2019, discounted using the incremental borrowing rate at the date of initial application and the lease liabilities recognised in the statement of financial position at the date of initial application. $ Operating lease commitments as at 31 March 2019 9,763,367 Effect of discounting the above amounts (193,855) Short-term leases (137,170) Present value of the lease payments due in periods covered by extension options that are included in the lease term and not previously included in operating lease commitments 15,189 Lease liabilities recognised as at 1 April 2019 9,447,531 In addition, the Company recognised right-of-use assets of $9,447,531 as at 1 April 2019 upon transition to FRS 116 as disclosed in Note 11.