41061 Unite AR22 HI-RES WEB-READY - Flipbook - Page 224
222
THE UNITE GROUP PLC | Annual Report and Financial Statements 2022
NOTES TO THE FINANCIAL STATEMENTS continued
Section 4: Funding continued
4.6 Leases
4.6a) Lease liabilities
Accounting policies
The Group assesses whether a contract is or contains a lease, at inception of the contract. The Group recognises a
right of use asset (see note 3.1a) and a corresponding lease liability with respect to all lease arrangements in which
it is the lessee.
The lease liability is initially measured at the present value of the lease payments that are not paid at the
commencement date, discounted by using the Group’s incremental borrowing rate (since the rate implicit in the leases
cannot be readily determined) of 4.17%.
The lease liability is presented as a separate line in the consolidated balance sheet.
The lease liability is subsequently measured by increasing the carrying amount to reflect interest on the lease liability
(using the effective interest method) and by reducing the carrying amount to reflect the lease payments made.
The Group remeasures the lease liability whenever:
•
The lease term has changed, in which case the lease liability is remeasured by discounting the revised lease
payments using a revised discount rate.
•
The lease payments change due to changes in an index, in which cases the lease liability is remeasured by
discounting the revised lease payments using an unchanged discount rate (unless the lease payments change is
due to a change in a floating interest rate, in which case a revised discount rate is used).
•
A lease contract is modified and the lease modification is not accounted for as a separate lease, in which case
the lease liability is remeasured based on the lease term of the modified lease by discounting the revised lease
payments using a revised discount rate at the effective date of the modification.
The Group did not make any such adjustments during the period presented.
Undiscounted cash flows
Lease liabilities
2022
£m
2021
£m
Carrying value
2022
£m
2021
£m
87.5
91.9
Analysed as:
Non-current
Current
Total lease liability
4.8
4.9
92.3
96.8
4.9
Lease liability maturity analysis
Year 1
10.5
13.0
4.8
Year 2
10.9
13.3
6.7
5.4
Year 3
11.8
13.5
6.7
6.2
Year 4
12.4
13.4
7.4
6.7
Year 5
13.3
13.7
7.9
7.4
Onwards
80.6
94.2
58.8
66.2
139.5
161.1
92.3
96.8
Total
The Group does not face a significant liquidity risk with regard to its lease liabilities. Lease liabilities are monitored within
the Group’s treasury function.
