Page 91 - Annual_Report_2020_2021

makes adjustments specific to the lease, e.g. term, country, currency and security.
lessee’s incremental borrowing rate is used, being the rate that the individual lessee would
effect. When
The lease payments are discounted using the interest rate implicit in the lease. If that rate
cannot be readily determined, which is generally the case for leases in the Agency, the
uses a build-up approach that starts with a risk-free interest rate adjusted for
as a starting point, adjusted to reflect changes in financing conditions since third
where possible, uses recent third-party financing received by the individual lessee
credit risk for leases held by the Agency, which does not have recent third-party
Lease payments to be made under reasonably certain extension options are also included in
have to pay to borrow the funds necessary to obtain an asset of similar value to the right- of-
use asset in a similar economic environment with similar terms, security and conditions.
take
they
until
liability
Summary of significant accounting policies (Continued)
To determine the incremental borrowing rate, the Agency:
lease any lease payments made at or before the commencement date less any lease
the The Agency is exposed to potential future increases in variable lease payments based on an adjustments to lease payments based on an index or rate take effect, the lease liability is Lease payments are allocated between principal and finance cost. The finance cost is charged to profit or loss over the lease period so as to produce a constant periodic rate of interest on Right-of-use assets are genera
in included not Right-of-use assets are measured at cost comprising the following: the amount of the initial measurement of lease liability equipment, it has chosen not to do so for the right-of-use buildings held by the Agency. lease term of 12 months or less. Low-value assets comprise light box. 25

AGENCY FOR VOLUNTEER SERVICE NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021 Leases (Continued) the measurement of the liability. - party financing was received - financing, and - are which rate, or reassessed and adjusted against the right-of-use asset. the remaining balance of the liability for each period. - - incentives received any initial direct costs, and - restoration costs. -

2. 2.14 index

in settlement is determined by considering the class of obligations as a whole. A provision is
recognised even if the likelihood of an outflow with respect to any one item included in the
the
Provisions are recognised when the Agency has a present legal or constructive obligation as
obligation, and the amount can be reliably estimated. Provisions are not recognised for future
Where there are a number of similar obligations, the likelihood that an outflow will be required
a result of past events, it is probable that an outflow of resources will be required to settle the
of Agency
estimate reflects the
best term
management’s lease

of if the
value present the expenditure required to settle the present obligation at the end of the reporting period. The discount rate used to determine the present value is a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The increase in the provision due to the passage of time is recognised as interest expense. Lease is recognised as a right-of-use ass

AGENCY FOR VOLUNTEER SERVICE NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021 Summary of significant accounting policies (Continued) Provisions operating losses. same class of obligations may be small. at measured are Provisions the leased asset is available for use by the Agency. stand-alone prices. index or rate as at the commencement date option, and penalties for terminating the of - payments exercising t

2. 2.13 Leases 2.14