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Leases (Tables)

12 Months Ended

Jun. 30, 2020

Summary of Movements in Lease Liabilities

The Group applied IFRS 16/AASB 16 ‘Leases’ (IFRS 16) from 1 July 2019. The Group elected to apply the modified retrospective transition approach, with no restatement of comparative periods. The comparative information relating to leases presented throughout the Financial Statements is in accordance with IAS 17/AASB 117 ‘Leases’ (IAS 17). Refer to note 38 ‘New and amended accounting standards and interpretations’ for information on the transition effects of IFRS 16 and policy choices made on implementation. Movements in the Group’s lease liabilities during the year are as follows:


	2020
	US$M
At the beginning of the financial year (1)		715
IFRS 16 transition		2,301
Additions		436
Remeasurements of index-linked freight contracts		733
Lease payments		(761	)
Foreign exchange movement		(43	)
Amortisation of discounting		90
Transfers and other movements		(28	)

At the end of the financial year		3,443

Comprising:
Current liabilities		853
Non-current liabilities		2,590

(1)	Relates to existing finance leases at 1 July 2019.

Summary of Maturity Profile of Lease Liabilities

The maturity profile of lease liabilities based on the undiscounted contractual amounts is as follows:


Lease liability (1)	2020		2019
	US$M		US$M
Due for payment:
In one year or less or on demand		927		110
In more than one year but not more than two years		630		110
In more than two years but not more than five years		1,335		307
In more than five years		1,043		501

Total		3,935		1,028

Carrying amount		3,443		715

(1)	Lease liability as at 30 June 2019 represents finance lease liabilities under IAS 17.

Summary of Minimum Lease Payments under Non-cancellable Operating Leases

The Group’s aggregate amounts of minimum lease payments under

non-cancellable

operating leases at 30 June 2019 under IAS 17 were as follows (reported under note 32 ‘Commitments’ in FY2019):


Commitments under operating leases	2019
	US$M
Due not later than one year		440
Due later than one year and not later than five years		876
Due later than five years		589

Total		1,905

Summary of Movements in Right of Use Assets

Movements in the Group’s right-of-use assets during the year are as follows:


2020	Land and buildings			Plant and equipment			Total
	US$M			US$M			US$M
Net book value
At the beginning of the financial year (1)		–			492			492
Assets recognised on adoption of IFRS 16		754			1,400			2,154
Additions		104			332			436
Remeasurements of index-linked freight contracts		–			733			733
Depreciation expensed during the period		(113	)		(543	)		(656	)
Depreciation classified as exploration		–			(34	)		(34	)
Impairments, net of reversals		(2	)		(22	)		(24	)
Transfers and other movements		(54	)		–			(54	)

At the end of the financial year		689			2,358			3,047

– Cost		804			3,349			4,153
– Accumulated depreciation and impairments		(115	)		(991	)		(1,106	)

(1)	Relates to assets previously held under finance leases under IAS 17.

Summary of Amounts Recorded in Income Statement and Cash Flow Statements

Amounts recorded in the income statement and the cash flow statement for the year were:


	2020
	US$M		Included within
Income statement
Depreciation of right-of-use assets		656	Profit from operations
Short-term, low-value and variable lease costs (1)		675	Profit from operations
Interest on lease liabilities		90	Financial expenses
Cash flow statement
Principal lease payments		671	Cash flows from financing activities
Lease interest payments		90	Cash flows from operating activities

(1)	Relates to US$438 million of variable lease costs, US$211 million of short-term lease costs and US$26 million of low-value lease costs.