6 Leases
Swisscom applied IFRS 16 “Leases” as at 1 January 2019 and elected to apply the modified retroactive approach for the first-time application. With this approach, right-of-use assets and lease liabilities were recognised in the same amount in the balance sheet. For further information, see Note 1, changes in accounting policies.
The leases of Swisscom comprise, in particular, the rental of operation and office buildings, of antenna sites and of network infrastructure. The Italian subsidiary, Fastweb, procures various access services from other fixed-network operators for the use of access lines to the end customer. Under IFRS 16 part of these access services is classified as a lease. The value of the individual access lines fulfils the criterion as an asset of low value. Swisscom applies the low value exemption of IFRS 16 for these leases. Accordingly, no right-of-use assets and lease liabilities will be recognised for these access services, the costs of which will be reported as direct costs.
Rights-of-use assets
| In CHF million | 30.6.2019 | 1.1.2019 | ||
|---|---|---|---|---|
| Land and buildings | 1,607 | 1,570 | ||
| Technical installations and network infrastructure | 136 | 111 | ||
| Other right-of-use assets | 3 | 2 | ||
| Net carrying amount of right-of-use assets | 1,746 | 1,683 |
Lease liabilities
| In CHF million | 30.6.2019 | 1.1.2019 | ||
|---|---|---|---|---|
| Land and buildings | 1,617 | 1,586 | ||
| Technical installations and network infrastructure | 135 | 110 | ||
| Other leases | 3 | 2 | ||
| Total lease liabilities | 1,755 | 1,698 | ||
| Thereof current lease liabilities | 220 | 210 | ||
| Thereof non-current lease liabilities | 1,535 | 1,488 |
Lease expenses
In CHF million |
IFRS 16 1.1.–30.6.2019 |
IAS 17 1.1.–30.6.2018 |
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|---|---|---|---|---|
| Depreciation of right-of-use assets | 122 | – | ||
| Interest expense on lease liabilities | 15 | – | ||
| Expense relating to operating leasing | – | 99 1 | ||
| Depreciation of assets under finance lease | – | 16 2 | ||
| Interest expense on finance lease liabilities | – | 12 | ||
| Expense relating to leases of low value assets | 64 3 | – | ||
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1 Disclosed under indirect costs.
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2 Disclosed under depreciation and amortisation of property, plant and equipment and intangible assets.
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3 Disclosed under direct costs.
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