3.5 Leases
Alpiq is lessee in various contracts particularly in connection with power plants, land, building and IT infrastructure rentals. These leases are concluded for a fixed term of one month to 20 years and may contain renewal or termination options. The table below shows the change in net carrying amounts of the right of use assets capitalised in the line item property, plant and equipment:
|
CHF million |
Rights of use buildings |
Rights of use power plants |
Rights of use others |
Total |
|
Net carrying amount at 1 January 2022 |
16 |
21 |
2 |
39 |
|
Acquisition / disposal of subsidiaries |
– 1 |
|
|
– 1 |
|
Investments |
8 |
|
|
8 |
|
Divestments / early termination |
– 2 |
|
|
– 2 |
|
Depreciation |
– 3 |
– 2 |
– 1 |
– 6 |
|
Currency translation differences |
– 1 |
– 1 |
|
– 2 |
|
Net carrying amount at 31 December 2022 |
17 |
18 |
1 |
36 |
|
Of which, cost value |
26 |
35 |
4 |
65 |
|
Of which, accumulated depreciation |
– 9 |
– 17 |
– 3 |
– 29 |
|
CHF million |
Rights of use buildings |
Rights of use power plants |
Rights of use others |
Total |
|
Net carrying amount at 1 January 2021 |
16 |
24 |
3 |
43 |
|
Investments |
4 |
|
|
4 |
|
Depreciation |
– 3 |
– 2 |
– 1 |
– 6 |
|
Currency translation differences |
– 1 |
– 1 |
|
– 2 |
|
Net carrying amount at 31 December 2021 |
16 |
21 |
2 |
39 |
|
Of which, cost value |
24 |
37 |
5 |
66 |
|
Of which, accumulated depreciation |
– 8 |
– 16 |
– 3 |
– 27 |
The change in carrying amounts of the lease liabilities included under financial liabilities can be seen in note 3.4. The total cash outflow from leases amounted to CHF 8 million in 2022 (previous year: CHF 8 million).
Accounting policies
The Alpiq Group applies a uniform approach for the recognition and measurement of leases. It does not make use of the practical expedients for short-term and low-value leases permitted under IFRS 16. At inception of a contract Alpiq assesses whether the contract is or contains a lease. A lease exists if a contract grants Alpiq the right to control a certain asset over a period of time in exchange for consideration. The right of use assets and the lease liabilities representing Alpiq’s obligation to make lease payments are recognised in the balance sheet at the time when the lease asset becomes available. The right of use assets are included under property, plant and equipment in the balance sheet. They are measured at amortised cost and depreciated on a straight-line basis over the lease term or the lifetime of the asset taking any impairment losses into account. Acquisition costs include the amount of recognised lease liabilities plus any dismantling obligations, directly attributable acquisition costs and one-off payments made at or before the start of the contract, less any lease incentives received.
The lease liabilities are initially recognised at the present value of the expected future lease payments. The present value is calculated with the lessee’s incremental borrowing rate applicable for the country, the term and the currency. In subsequent periods, the lease liabilities are measured at amortised cost by applying the effective interest method. The lease liabilities are recognised in current or non-current financial liabilities as appropriate.
The determination of the lease term as a basis for the expected future payments may require various estimates from management regarding the future use of the leased asset. Extension options are only taken into account in the contractual term if it is reasonably certain that the option will be exercised. Termination options are only taken into account if it is reasonably certain that the option will be exercised. Alpiq takes into account all relevant factors that create an economic incentive to exercise the option. Alpiq has internally defined the following limits to determine the contractual term for callable leases with an unlimited term: for buildings, car parks and power plants a maximum of ten years, and for all others such as furniture, IT equipment and vehicles a maximum of two years.