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RIGHT OF USE ASSET AND LEASE LIABILITY
 12 Months Ended
Dec. 31, 2023
Notes and other explanatory information [abstract]  
RIGHT OF USE ASSET AND LEASE LIABILITY

NOTE 11 — RIGHT OF USE ASSET AND LEASE LIABILITY

 

Net carrying amounts of right-of-use assets

 

The carrying amounts of right-of-use assets are as follows:

 

         
   As of December 31, 
   2023   2022 
Right-of-use asset – Buildings  $-   $2,541,123 
Right-of-use asset – Buildings (related party)   11,149,101    11,149,101 
Right-of-use asset – Leasehold   -    992,410 
Right-of-use asset – Office space   -    58,412 
Foreign currency translation   -    (119,182)
Accumulated depreciation of right-of-use assets   -    (1,723,114)
Accumulated depreciation of right-of-use assets (related party)   (997,456)   (325,040)
Lease modifications   (10,151,645)   - 
Right of use asset  $-   $12,573,710 

 

During the year ended December 31, 2023, the Group recorded depreciation of right-of-use assets of $1,004,913 (2022 — $814,220) out of which $332,497 (2022: $489,180) is related to ERL entity which has been spun off.

 

The amortization amount and interest expense of the lease for the year 2023 was $775,728 (2022: $466,094) and $787,341 (2022: $491,336) respectively.

 

During July 2022, the Group signed two lease agreements for University of Antelope Valley’s buildings with the former owners, a related party, both with 12-year terms. A right-of-use asset and a lease liability of $11,149,101 was booked to the Consolidated Balance Sheets for the leases. Management has conducted an assessment and concluded that it is appropriate to proceed with a full write-off of the asset and associated liability in question. This decision is based on the alignment of the liability with the full impairment of the relevant ROU asset. The closure order of the school, coupled with subsequent events, has prompted management to reassess the validity, enforceability and value of the agreement entered with the previous owners. The Company has recorded a gain of $308,763 due to lease modification during the year 2023. UAV is currently going through the process of close out audit to be submitted to the governing bodies. Refer to Note 36 for additional details.

 

Lease liabilities

 

The maturity analysis of lease liabilities is as follows:

 

         
   As of December 31, 
   2023   2022 
Within one year  $-   $1,664,966 
Two to five years   -    6,280,716 
Thereafter       -    17,871,937 
Gross lease liabilities   -    25,817,619 
Less: Imputed interest   -    (12,832,744)
Lease liabilities  $-   $12,984,875 
           
Lease liabilities – Current  $-   $1,590,538 
Lease liabilities - Non-Current   -    11,394,337 
Lease liabilities  $-   $12,984,875 

 

The weighted average discount rate utilized to calculate the present value of the lease liabilities was 4.97% (2022: 7.71%). The average remaining life of the leases is nil (2022: 22 years)