21 » Lease Liabilities
As a result of initially applying IFRS 16, the company recognized lease liabilities in an amount of € 3.0 billion in relation to leases previously classified as operating leases. adidas’ weighted average borrowing rate applied to lease liabilities recognized in the statement of financial position on January 1, 2019 was 3.5%.
|
|
Dec. 31, 2019 |
|
Jan. 1, 2019 |
|---|---|---|---|---|
Land and buildings |
|
2,985 |
|
2,874 |
Technical equipment and machinery |
|
101 |
|
135 |
Other equipment, furniture and fixtures |
|
47 |
|
61 |
Lease liabilities |
|
3,132 |
|
3,070 |
The difference between operating lease commitments disclosed applying IAS 17 as reported at December 31, 2018, and the lease liabilities recognized at the date of first-time application of IFRS 16 on January 1, 2019, is shown in the following table:
Operating lease commitments as at December 31, 2018 |
|
2,984 |
Less: short-term leases recognized on a straight-line basis as expense |
|
(36) |
Less: low-value leases recognized on a straight-line basis as expense |
|
(14) |
Adjustments as a result of a different treatment of extension and termination options |
|
314 |
Adjustments: Other |
|
32 |
Gross lease liabilities as at January 1, 2019 |
|
3,280 |
Discounting |
|
(301) |
Discounted lease liabilities as at January 1, 2019 |
|
2,979 |
Plus: Finance lease liabilities recognized as at December 31, 2018 |
|
91 |
Lease liabilities recognized as at January 1, 2019 |
|
3,070 |
The lease liabilities held by adidas as at December 31, 2019 mature as follows:
|
|
Dec. 31, 2019 |
|---|---|---|
Within 1 year |
|
723 |
Between 1 and 5 years |
|
2,110 |
After 5 years |
|
732 |
Total |
|
3,566 |
Interest recognized on lease liabilities in 2019 amounted to € 101 million.
Expenses from leases classified as short-term or low-value or variable are excluded from the measurement of the lease liability. Further information on total expenses relating to short-term, low-value, and variable leases is provided in these Notes. note 33
In 2019, the total cash outflows for leases, including the above-mentioned leases not included in the calculation of the lease liability, amounted to € 874 million.