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Right-of-use assets and Lease liabilities | 12 Months Ended
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Dec. 31, 2019
Leases [Abstract] |
Right-of-use assets and Lease liabilities | Right-of-use assets and Lease liabilities Alcon adopted IFRS 16, Leases effective January 1, 2019, as described in Note 3 to these Consolidated Financial Statements. Alcon has applied the modified retrospective method, with right-of-use assets measured at an amount equal to the lease liability, adjusted by the amount of the prepaid or accrued lease payments relating to those leases recognized in the balance sheet immediately before the date of initial application. In applying IFRS 16 for the first time, Alcon has used the following practical expedients on a lease by lease basis as permitted by the standard:
• | contracts previously identified as leases by applying IAS 17, Leases and IFRIC 4, Determining whether an Arrangement contains a Lease, have not been re-assessed under IFRS 16,
• | leases with a remaining lease term less than twelve months from the date of adoption and leases of low-value assets have not been recognized as right-of-use assets and lease liabilities,
• | measurement of right-of-use assets at the date of adoption excluded the initial direct costs, and
• | use of hindsight in determining the lease term for contracts containing options to extend or terminate the lease.
Right-of-use assets Right-of-use assets as of December 31, 2019 and January 1, 2019 were comprised of the following:
($ millions) | December 31, 2019 |  |  | January 1, 2019 |
Land | 20 |  |  | 20 |
Buildings | 277 |  |  | 226 |
Machinery & equipment and other assets | 27 |  |  | 33 |
Total right-of-use assets(1) | 324 |  |  | 279 |
(1) | Right-of-use assets, related to operating leases at the date of implementation of IFRS 16, were higher than the lease liabilities at the date of implementation of IFRS 16 by $3 million, due to the net impact of prepayments and accrued lease payments recognized at December 31, 2018. This impact was offset by the lease liability related to the finance lease exceeding the corresponding capital asset by $10 million.
Depreciation charges of $66 million for the year ended December 31, 2019 are shown in the table below by underlying class of asset:
($ millions) | 2019 |
Land | 1 |
Buildings | 47 |
Machinery & equipment and other assets | 18 |
Total | 66 |
Additions to right-of-use assets amounted to $116 million for the year ended December 31, 2019. Lease liabilities Lease liabilities of $286 million were recorded on January 1, 2019. The reconciliation of lease commitments disclosed as of December 31, 2018 and lease liabilities recorded on January 1, 2019 is as follows:
($ millions) |
Operating lease commitments as of December 31, 2018 | 222 |
Effect of discounting | (21 | )
Operating leases discounted using the incremental borrowing rate(1) | 201 |
Finance lease liabilities recognized as at December 31, 2018 | 89 |
Recognition exemption for short term and low-value leases | (4 | )
Lease liabilities as of January 1, 2019 | 286 |
(1) | Weighted average incremental borrowing rate of 2.9% was applied at January 1, 2019, the date of implementation of IFRS 16, Leases.
Lease liabilities totaled $341 million as of December 31, 2019, including $61 million in current lease liabilities and $280 million in non-current lease liabilities. The contractual maturities of the undiscounted lease liabilities as of December 31, 2019, are as follows:
($ millions) | Lease liabilities undiscounted |
Not later than one year | 73 |
Between one and five years | 176 |
Later than five years | 200 |
Total lease liabilities undiscounted | 449 |
($ millions) | Lease liabilities |
Not later than one year | 61 |
Between one and five years | 140 |
Later than five years | 140 |
Total lease liabilities | 341 |
Additional disclosures The following table provides additional disclosures related to right-of-use assets and lease liabilities:
($ millions) | 2019 |
Interest expense on lease liabilities | 11 |
Expense on short-term and low value leases | 3 |
Total cash outflows for leases | 59 |
Thereof: |
Lease liability payments(1) | 52 |
Interest payments(2) | 5 |
Short-term and low value lease payments(2) | 2 |
(1) | Reported as cash outflows from financing activities net of lease incentives received
(2) | Included within total net cash flows from operating activities
Prior to the adoption of IFRS 16, Alcon prepared the required disclosures for operating lease commitments and finance lease future minimum lease payments. Operational lease commitments as of December 31, 2018, were as follows:
($ millions) | 2018 |
Not later than one year | 50
Between one and five years | 135
Later than five years | 37
Total operational lease commitments | 222 |
Future minimum lease payments under finance leases, together with the present value of the minimum lease payments as of December 31, 2018, were as follows:
($ millions) | 2018 |
Not later than one year | — |
Between one and five years | 27 |
Later than five years | 153 |
Total minimum lease liabilities | 180 |
Less future finance charges | (91 | )
Present value of minimum lease payments | 89 |

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- Definition Leases [Abstract] + References No definition available. + Details
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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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