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Lease Arrangements
12 Months Ended
Dec. 31, 2020
Disclosure Of Quantitative Information About Leases For Lessee [Abstract]  
Lease Arrangements

17.

LEASE ARRANGEMENTS

a.Right-of-use Assets

 

 

December 31

 

 

 

2019

 

 

2020

 

 

 

NT$

 

 

NT$

 

 

 

(In Millions)

 

Land and buildings

 

 

 

 

 

 

 

 

Handsets base stations

 

$

6,845

 

 

$

7,096

 

Others

 

 

1,916

 

 

 

1,708

 

Equipment

 

 

2,603

 

 

 

2,205

 

 

 

$

11,364

 

 

$

11,009

 

 

 

 

Year Ended December 31

 

 

 

2019

 

 

2020

 

 

 

NT$

 

 

NT$

 

 

 

(In Millions)

 

Additions to right-of-use assets

 

$

3,803

 

 

$

3,796

 

Depreciation charge for right-of-use assets

 

 

 

 

 

 

 

 

Land and buildings

 

 

 

 

 

 

 

 

Handsets base stations

 

$

2,728

 

 

$

2,729

 

Others

 

 

821

 

 

 

786

 

Equipment

 

 

419

 

 

 

416

 

 

 

$

3,968

 

 

$

3,931

 

The Company did not have significant sublease or impairment of right-of-use assets for the years ended December 31, 2019 and 2020.

b.Lease liabilities

 

 

December 31

 

 

 

2019

 

 

2020

 

 

 

NT$

 

 

NT$

 

 

 

(In Millions)

 

Lease liabilities

 

 

 

 

 

 

 

 

Current

 

$

3,291

 

 

$

3,382

 

Noncurrent

 

 

6,467

 

 

 

6,215

 

 

 

$

9,758

 

 

$

9,597

 

Ranges of discount rates for lease liabilities were as follows:

 

 

December 31

 

 

2019

 

2020

Land and buildings

 

 

 

 

Handsets base stations

 

0.58%-1.18%

 

0.46%-1.18%

Others

 

0.58%-9.00%

 

0.46%-9.00%

Equipment

 

0.58%-4.50%

 

0.46%-2.99%

c.Important lease-in activities and terms

The Company mainly enters into lease-in agreements of land and buildings for handsets base stations located all over Taiwan with lease terms from 1 to 20 years.  The lease agreements do not contain bargain purchase options to acquire the assets at the expiration of the respective leases.  For majority of the lease-in agreements on handsets base station, the Company has the right to terminate the agreement prior to the expiration date if the Company is unable to build the required telecommunication equipment, either due to legal restrictions, controversial events, or other events.

 

The Company also leases land and buildings for the use of offices, server rooms, and stores with lease terms from 1 to 30 years.  Most of the lease agreements for national land adjust the lease payment according to the changes of the announced land values by the authority.  At the expiry of the lease term, the Company does not have bargain purchase options to acquire the assets.

 

The lease agreements for equipment include a contract between Chunghwa and ST-2 Satellite Ventures Pte., Ltd. on March 12, 2010 to lease capacity on the ST-2 satellite.  For the information of lease agreements with related parties, please refer to Note 40 to the consolidated financial statements for details.

 

d.Other lease information

 

 

 

Year Ended December 31

 

 

 

2019

 

 

2020

 

 

 

NT$

 

 

NT$

 

 

 

(In Millions)

 

Expenses relating to low-value asset leases

 

$

7

 

 

$

8

 

Expenses relating to variable lease payments not included in

     the measurement of lease liabilities

 

$

6

 

 

$

5

 

Total cash outflow for leases

 

$

3,826

 

 

$

3,776

 

The Company leases certain equipment which qualify as low-value asset leases.  The Company has elected to apply the recognition exemption and, thus, not to recognize right-of-use assets and lease liabilities for these leases.

Lease-out arrangements under operating leases for freehold property, plant, and equipment and investment properties were set out in Notes 16 and 18 to the consolidated financial statements.