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22. Lease liabilities

As of 1 January 2019 IFRS 16 is implemented in the balance sheet and P&L. In order to implement IFRS 16 a number of key options and practical expedients allowed under IFRS 16 were adopted of which the following are the most significant:

  • A modified retrospective approach was applied and therefore prior periods were not restated;

  • Not to recognise right-of-use assets and lease liabilities for short-term leases that have a lease term of 12 months or less and leases of low-value assets. The lease payments associated with these leases are recognised as an expense on a straight–line basis over the lease term;

  • To apply the ‘grandfather’ option, which means that all conclusions previously reached under IAS 17 (and IFRIC 4 Determining Whether an Arrangement Contains a Lease) are deemed compliant with IFRS 16;

  • To use hindsight in determining the lease term.

The lease liabilities can be specified as follows:

 

31-12-2021

31-12-2020

Land leases

143

152

Car leases

3

2

Office rental contracts

-

1

Total

146

155

   
  

Lease liabilities

Balance on 1 January 2020

 

130

New lease contracts

 

1

Amortization

 

(1)

Revaluation

 

25

Balance on 31 December 2020

 

155

New lease contracts

 

1

Buy-off landlease

 

(5)

Amortization

 

(1)

Revaluation

 

(4)

Balance as per 31 December 2021

 

146

 

31-12-2021

31-12-2020

Maturity

  

Year 1

       1

       1

Year 2-5

       2

       2

Onwards

143

152

Total

146

155

   
 

31-12-2021

31-12-2020

Current

1

       1

Non-current

145

   154

In 2021 the lease liabilities decreased with €9 million mainly due to the buy-off land lease in Amsterdam of €5 million and a revaluation of €4 million.

Land lease liabilities

The land liabilities are calculated based on a perpetual view. These land leases require monthly, quarterly, (semi) annual payments if the lease obligation is not redeemed for a certain time frame. For some land leases, a variable component is applicable based on an index. The lease liabilities are reassessed and re-measured after a new index is applicable or the lease payments are changed after a certain time frame by the lessor based on contractual terms.

The assumptions are based on the value of the contracts, or in case of the land leases based on value of the ground (WOZ) x increase factor (market increase). The weighted average discount rate used in 2021 by Vesteda for discounting the lease payments is 3.0%.