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Right-of-use assets and lease liabilities
 12 Months Ended
Dec. 31, 2020
Lease liabilities and Right of use assets Disclosure Abstract  
Disclosure of leases [text block]
10. Right-of-use assets and lease liabilities
The following table summarizes the movements of the right-of-use assets of continuing operations:
(USD millions)
2020
2019
Right-of-use assets at January 1
1 677
1 554
Impact of acquisitions of businesses
32
Additions
346
537
Depreciation charge
– 330
– 305
Lease contract terminations  1
– 63
– 98
Impact of divestments
– 32
– 17
Currency translation effects
46
6
Total right-of-use assets at December 31  2
1 676
1 677
 1  Lease contract terminations also includes modifications to existing leases that result in reductions to the right-of-use assets, and reductions due to sub-leasing.
 2  No impairment charge was recorded in 2020 (2019: nil).
The following table shows the right-of-use assets carrying value and depreciation charge of continuing operations at December 31, 2020 and 2019, by underlying class of asset:


(USD millions)
December 31,

2020

carrying value
Depreciation

charge

2020
December 31,

2019

carrying value
Depreciation

charge

2019
Land
528
11
537
14
Buildings
963
207
990
194
Vehicles
155
100
129
87
Machinery and equipment, and other assets
30
12
21
10
Total right-of-use assets
1 676
330
1 677
305
The following table shows the lease liabilities of continuing operations by maturity at December 31, 2020 and 2019:


(USD millions)


Lease liabilities

2020
Lease liabilities

undiscounted

2020


Lease liabilities

2019
Lease liabilities

undiscounted

2019
Less than one year
286
338
246
295
Between one and two years
229
274
202
246
Between two and three years
186
226
163
202
Between three and four years
148
183
138
173
Between four and five years
129
160
119
150
After five years
1 027
2 326
1 081
2 419
Total lease liabilities
2 005
3 507
1 949
3 485
Less current portion of lease liabilities
– 286
– 338
– 246
– 295
Non-current portion of lease liabilities
1 719
3 169
1 703
3 190
At December 31, 2020 and December 31, 2019, there were no material future cash outflows, including extension options, excluded from the measurement of lease liabilities. The Group’s most material lease with a lease term extension, representing a lease liability value of USD 0.6 billion (2019: USD 0.6 billion), has a determined lease term end date of 2071 (2019: 2071).
In 2019, the Group completed sale and leaseback transactions for certain property, plant and equipment as part of its plans to consolidate sites. Transactions resulted in net cash inflows of USD 0.7 billion and the recognition of USD 96 million of lease liabilities, and USD 37 million of right-of-use assets. The right-of-use assets value reflects the proportion of the property, plant and equipment retained for a period of one to five years, with two five-year extension periods for certain right-of-use assets. The liabilities reflect the net present value of future lease payments. The net gain on the sale and leaseback transactions amounted to USD 478 million. There were no significant sale and leaseback transactions completed in 2020.
The following table provides additional disclosures related to right-of-use assets and lease liabilities of continuing operations for 2020 and 2019:
(USD millions)
2020
2019
Interest expense on lease liabilities  1
67
66
Expense on short-term leases
4
7
Expense on low-value leases
7
8
Total cash outflows for leases
379
339
Thereof:
Cash outflows for short-term leases

and low-value leases  2


11


15
Payments of interest  3
56
51
Payments of lease liabilities  4
312
273
 1  The weighted average interest rate is 3.4% (2019: 3.9%).
 2  Cash flows from short-term and low-value leases are included within total net cash flows from operating activities. The portfolio of short-term leases to which the Group is committed to at December 31, 2020 and 2019, is similar to the portfolio of short-term leases the Group entered into during 2020 and 2019.
 3  Included within total net cash flows from operating activities.
 4  Reported as cash outflows used in financing activities net of lease incentives received of USD nil (2019: USD 33 million).
The net investment held and income from subleasing right-of-use assets were not significant for 2020 and 2019. Income from leasing Novartis property, plant and equipment to third parties for both 2020 and 2019 was not significant.
Note 30 provides additional disclosures on discontinued operations.