Annual Report 2019

NOTESTOTHE CONSOLIDATED FINANCIAL STATEMENTS For the year ended 31 December 2019 50 The United Laboratories International Holdings Limited Annual Report 2019 2. APPLICATION OF NEW AND AMENDMENTS TO HONG KONG FINANCIAL REPORTING STANDARDS (“HKFRSs”) (Continued) New and amendments to HKFRSs that are mandatorily effective for the current year (Continued) 2.1 HKFRS 16 Leases (Continued) As a lessee (Continued) For leases that were classified as finance leases applying HKAS 17, the carrying amount of the right- of-use asset and the lease liability at the date of initial application shall be the carrying amount of the leased asset and lease liability immediately before that date measured applying HKAS 17. For those leases, the Group accounted for the right-of-use asset and the lease liability applying HKFRS 16 from the date of initial application. When applying the modified retrospective approach under HKFRS 16 at transition, the Group applied the following practical expedients to leases previously classified as operating leases under HKAS 17, on lease-by-lease basis, to the extent relevant to the respective lease contracts: i. excluded initial direct costs from measuring the right-of-use assets at the date of initial application; and ii. used hindsight based on facts and circumstances as at date of initial application in determining the lease term for the Group’s leases with extension and termination options.