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Leases | 12 Months Ended
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Dec. 31, 2019
Presentation of leases for lessee [Abstract] |
Disclosure of leases |
24. | Lease
1) | Company as a lessee
(1) | Lease contracts
The Company had recognized finance lease assets and liabilities only for those lease contracts classified as finance lease contracts under IAS 17 ‘Lease’. However, upon adoption of IFRS 16 ‘Lease’, the Company additionally recognized right-of-use assets and lease liabilities for those lease contracts that were classified operating lease previously under IAS 17 ‘Lease’. The Company applies the short-term leases recognition exemption to its lease contracts that have a lease term of 12 months or less from the commencement date, and recognized ￦20,127 million as expense for the year ended December 31, 2019. The Company also applies the leases of low-value assets recognition exemption to leases contracts with underlying assets considered to be low value (i.e., approximately less than ￦5 million), and recognized ￦1,616 million as expense for the year ended December 31, 2019. The Company has lease contracts for various items such as consecutive voyage charter contracts, power purchase agreements (PPA), real estate lease contracts including buildings, switchyard, and land for electric substation, vehicles, and other equipment.
(2) | Right-of-use assets as of December 31, 2019 are as follows:
|  |  |  |  | 2019 |
|  |  |  |  | Acquisition cost |  |  | Government grants |  |  | Accumulated depreciation |  |  | Book value |
|  |  |  |  | In millions of won |
Land |  | ￦ |  |  |  |  | 693,103 |  |  |  | — |  |  |  | (49,029 | ) |  |  | 644,074 |
Buildings |  |  |  |  |  |  | 54,980 |  |  |  | — |  |  |  | (20,403 | ) |  |  | 34,577 |
Structures |  |  |  |  |  |  | 28,198 |  |  |  | — |  |  |  | (2,554 | ) |  |  | 25,644 |
Machinery |  |  |  |  |  |  | 1,308 |  |  |  | — |  |  |  | (484 | ) |  |  | 824 |
Ships |  |  |  |  |  |  | 4,113,754 |  |  |  | — |  |  |  | (425,465 | ) |  |  | 3,688,289 |
Vehicles |  |  |  |  |  |  | 20,817 |  |  |  | — |  |  |  | (7,109 | ) |  |  | 13,708 |
Others(*) |  |  |  |  |  |  | 2,661,850 |  |  |  | — |  |  |  | (2,285,393 | ) |  |  | 376,457 |
|  | ￦ |  |  |  |  | 7,574,010 |  |  |  | — |  |  |  | (2,790,437 | ) |  |  | 4,783,573 |
| (*) | Including power purchase agreements (“PPA”) with GS EPS and two other LNG combined power suppliers.
(3) | Changes in right-of-use assets for the year ended December 31, 2019 are as follows:
|  |  |  |  | Beginning balance |  |  | Changes in accounting policies(*) |  |  | Increase |  |  | Depreciation |  |  | Ending balance |
|  |  |  |  | In millions of won |
Land |  | ￦ |  |  |  |  | — |  |  |  | 684,386 |  |  |  | 8,717 |  |  |  | (49,029 | ) |  |  | 644,074 |
Buildings |  |  |  |  |  |  | — |  |  |  | 36,874 |  |  |  | 18,106 |  |  |  | (20,403 | ) |  |  | 34,577 |
Structures |  |  |  |  |  |  | — |  |  |  | 20,840 |  |  |  | 7,358 |  |  |  | (2,554 | ) |  |  | 25,644 |
Machinery |  |  |  |  |  |  | — |  |  |  | — |  |  |  | 1,308 |  |  |  | (484 | ) |  |  | 824 |
Ships |  |  |  |  |  |  | — |  |  |  | 3,986,947 |  |  |  | 126,807 |  |  |  | (425,465 | ) |  |  | 3,688,289 |
Vehicles |  |  |  |  |  |  | — |  |  |  | 11,258 |  |  |  | 9,559 |  |  |  | (7,109 | ) |  |  | 13,708 |
Others(*) |  |  |  |  |  |  | — |  |  |  | 403,346 |  |  |  | 49,141 |  |  |  | (76,030 | ) |  |  | 376,457 |
|  | ￦ |  |  |  |  | — |  |  |  | 5,143,651 |  |  |  | 220,996 |  |  |  | (581,074 | ) |  |  | 4,783,573 |
| (*) | Including transferred amount of ￦195,704 million, which was classified as finance lease assets as of December 31, 2018.
(4) | Lease liabilities as of December 31, 2018 and December 31, 2019 are as follows:
|  |  |  |  | 2018 |
|  |  |  |  | Minimum lease payment |  |  | Present value of minimum lease payment |
|  |  |  |  | In millions of won |
Less than 1 year |  | ￦ |  |  |  |  | 87,709 |  |  |  | 57,200 |
1 ~ 5 years |  |  |  |  |  |  | 228,783 |  |  |  | 170,676 |
More than 5 years |  |  |  |  |  |  | 65,250 |  |  |  | 55,930 |
|  | ￦ |  |  |  |  | 381,742 |  |  |  | 283,806 |
|  |  |  |  | 2019 |
|  |  |  |  | In millions of won |
Less than 1 year |  | ￦ |  |  |  |  | 686,445 |
1 ~ 5 years |  |  |  |  |  |  | 2,334,883 |
More than 5 years |  |  |  |  |  |  | 2,735,681 |
|  |  |  |  |  |  | 5,757,009 |
Less : Discount |  |  |  |  |  |  | (686,876 | )
Present value of lease payment |  | ￦ |  |  |  |  | 5,070,133 |
(5) | The details of the liquidity classification of lease liabilities (Prior year : finance lease liabilities) as of December 31, 2018 and 2019 are as follows:
|  |  |  |  | 2018 |  |  | 2019 |
|  |  |  |  | In millions of won |
Current lease liabilities |  | ￦ |  |  |  |  | 57,200 |  |  |  | 635,349 |
Non-current lease liabilities |  |  |  |  |  |  | 226,606 |  |  |  | 4,434,784 |
|  | ￦ |  |  |  |  | 283,806 |  |  |  | 5,070,133 |
(6) | Changes in lease liabilities for the years ended December 31, 2018 and 2019 are as follows:
|  |  |  |  | 2018 |
|  |  |  |  | Beginning balance |  |  | Acquisition |  |  | Decrease |  |  | Ending balance |
|  |  |  |  | In millions of won |
Finance lease liabilities |  | ￦ |  |  |  |  | 418,260 |  |  |  | — |  |  |  | (134,454 | ) |  |  | 283,806 |
|  |  |  |  | 2019 |
|  |  |  |  | Beginning balance |  |  | Changes in accounting policies |  |  | Increase |  |  | Decrease |  |  | Interest expenses |  |  | Others(*) |  |  | Ending balance |
|  |  |  |  | In millions of won |
Lease liabilities |  | ￦ |  |  |  |  | 283,806 |  |  |  | 4,943,584 |  |  |  | 218,800 |  |  |  | (659,387 | ) |  |  | 85,950 |  |  |  | 197,380 |  |  |  | 5,070,133 |
| (*) | Including translation effect of foreign currency lease liabilities and others.
(7) | Details of expense relating to lease contracts as lessee for the year ended December 31, 2019 are as follows:
|  |  |  |  | 2019 |
|  |  |  |  | In millions of won |
Depreciation of right-of-use assets |  | ￦ |  |  |  |  | 581,074 |
Interest expenses of lease liabilities |  |  |  |  |  |  | 85,950 |
Leases expenses for short-term leases |  |  |  |  |  |  | 20,127 |
Leases expenses for leases of low-value assets |  |  |  |  |  |  | 1,616 |
Variable lease payments |  |  |  |  |  |  | (15,912 | )
|  | ￦ |  |  |  |  | 672,855 |
(8) | Minimum lease payment and contingent rent payment recognized as an expense as a lessee for the year ended December 31, 2018 are as follows:
|  |  |  |  | 2018 |
|  |  |  |  | In millions of won |
Minimum lease payment |  | ￦ |  |  |  |  | 111,530 |
Contingent rent payment |  |  |  |  |  |  | (18,872 | )
|  | ￦ |  |  |  |  | 92,658 |
(9) | The total cash outflow related to the lease contract, including cash outflows due to short-term leases and leases of low-value asset leases, amounts to ￦665,218 million.
2) | Company as a lessor
(1) | Finance lease contracts
The Company entered into power purchase agreements (“PPA”) with Jordan Electric Power Company to provide a 373MW level Qatrana gas combined power plant over a 25-year lease term, and an 89.1MW level Fujeij wind power plant over a 20-year lease term. Also, the Company has provided fly-ash pipe conduit as finance leases with an average lease term of 7 years. In addition, the Company provides 30 energy storage system installation projects and 96 energy efficiency contracts as finance leases with a lease term of 1 to 10 years. Also, the Company entered into a PPA with the Comission Federal de Electricidad in Mexico to provide for 25 years (from December 2013 to November 2038) all electricity generated from the power plant after completion of its construction and collect rates consisting of fixed costs (to recover the capital) and variable costs during the contracted period.
(2) | Profit and loss related to finance lease:
|  |  |  |  | 2019 |
|  |  |  |  | In millions of won |
Finance income on the net investment in the lease |  | ￦ |  |  |  |  | 97,392 |
(3) | Maturity analysis of the lease payments receivable and reconciliation of the undiscounted lease payments to the net investment in the lease as of December 31, 2019 are as follows:
|  |  |  |  | 2019 |
|  |  |  |  | In millions of won |
Less than 1 year |  | ￦ |  |  |  |  | 173,093 |
1 ~ 2 years |  |  |  |  |  |  | 150,895 |
2 ~ 3 years |  |  |  |  |  |  | 150,596 |
3 ~ 4 years |  |  |  |  |  |  | 149,364 |
4 ~ 5 years |  |  |  |  |  |  | 145,964 |
More than 5 years |  |  |  |  |  |  | 1,740,652 |
|  |  |  |  |  |  | 2,510,564 |
Less : Unearned finance income |  |  |  |  |  |  | (1,331,723 | )
Net investment in the lease |  | ￦ |  |  |  |  | 1,178,841 |
The implicit interest rate for a lease term is determined on the lease contract date. The implicit interest rate of the finance lease contracts is from 3.5% up to 16.48% per year as of December 31, 2019. (prior year : 3.5% ~ 9.12%)
(4) | Finance lease receivables as of December 31,2018 are as follows:
|  |  |  |  | 2018 |
|  |  |  |  | Minimum lease payment |  |  | Present value of minimum lease payment |
|  |  |  |  | In millions of won |
Less than 1 year |  | ￦ |  |  |  |  | 124,918 |  |  |  | 84,688 |
1 ~ 5 years |  |  |  |  |  |  | 467,518 |  |  |  | 223,622 |
More than 5 years |  |  |  |  |  |  | 1,333,016 |  |  |  | 675,036 |
|  | ￦ |  |  |  |  | 1,925,452 |  |  |  | 983,346 |
(5) | Changes in the allowance for doubtful accounts of finance lease receivables for the year ended December 31, 2018 and 2019 are as follows:
|  |  |  |  | 2018 |  |  | 2019 |
|  |  |  |  | In millions of won |
Beginning balance |  | ￦ |  |  |  |  | — |  |  |  | 1,133 |
Bad debt expense |  |  |  |  |  |  | 1,133 |  |  |  | — |
Reversal of allowance for doubtful accounts |  |  |  |  |  |  | — |  |  |  | (271 | )
Ending balance |  | ￦ |  |  |  |  | 1,133 |  |  |  | 862 |

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- Definition The entire disclosure for leases. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Name IFRS -Number 16 -IssueDate 2019-01-01 -Section Presentation -URI http://eifrs.ifrs.org/eifrs/xifrs-link?type=IFRS&num=16&code=ifrs-tx-2019-en-r&doctype=Standard&dita_xref=IFRS16_g47-50_TI -URIDate 2019-03-27 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Name IFRS -Number 16 -IssueDate 2019-01-01 -Section Disclosure -URI http://eifrs.ifrs.org/eifrs/xifrs-link?type=IFRS&num=16&code=ifrs-tx-2019-en-r&doctype=Standard&dita_xref=IFRS16_g51-60_TI -URIDate 2019-03-27 + Details
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