IBERSOL | Integrated Management Report 2022

INTEGRATED MANAGEMENT REPORT 2022 With the adoption of IFRS 16, the distinction between operating leases (off balance sheet) and finance leases (included in the balance sheet) was eliminated at the lessee level, having been replaced by a model in which an asset identified with a right is ac- counted for of use and a corresponding liability for all lease agreements. The right of use is initially measured at cost and subsequently at cost net of deprecia- tion and impairment, adjusted by remeasuring the lease liability. The right of use is constituted by the initial value of the lease liabilities and by initial di- rect costs and payments made to the lessor before the effective date of the lease, minus any lease incentives received. The Group applies the recognition exemption provided for in paragraph 6 of IFRS 16 to short-term leases and leases where the underlying asset has a low value. Amortization The right of use is depreciated on a straight-line basis over the term of the lease, com- prising the non-cancellable period during which the lessee has the right to use an un- derlying asset and (i) the periods covered by an option to extend the lease, if the lessee has a reasonable certainty to exercise that option; (ii) the periods covered by an option to terminate the lease, if the lessee is reasonably certain not to exercise that option. Alternatively, in cases where the Group intends to exercise any existing call options for the underlying asset, the right of use is depreciated over the estimated useful life of the underlying asset. Impairment The rights of use subject to amortization are reassessed to determine any impairment, to be constituted or to be reversed, whenever events occur or changes in circumstances that cause the value at which they are recorded to be recoverable or not. An impair- ment loss is recognized in the consolidated statement of income and other comprehen- sive income for the excess amount of the asset’s carrying amount over its recoverable amount. The recoverable amount is the higher of an asset’s fair value minus expenses incurred in selling it and its value in use. In order to carry out impairment tests, assets are grouped at the lowest level at which cash flows can be identified separately (cash generating units). The assessment of the existence of signs of impairment of the CGU and the carrying out of the respective tests, if necessary, occurs on an annual basis. Each restaurant is con- sidered a cash generating unit (CGU), and in the case of airports each airport is a CGU. Each CGU comprises all the assets and liabilities attributable to each restaurant, namely: tangible fixed assets, intangible assets, rights of use and respective leasing liabilities. 429