Page 60 - 2024 CPC Corporation,Taiwan

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The lease liability is measured at amortized cost using the effective interest method. It is remeasured when:
— there is a change in future lease payments arising from the change in an index or rate; or
— there is a change in the Company’s estimate of the amount expected to be payable under a residual value guarantee; or
— there is a change of its assessment on whether it will exercise a purchase, extension or termination option; or
— there is a change of its assessment of lease period on whether it will exercise extension or termination option; or
— there is any lease modifications
When the lease liability is remeasured, other than lease modifications, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or in profit and loss if the carrying amount of the right-of-use asset has been reduced to zero.
When the lease liability is remeasured to reflect the partial or full termination of the lease for lease modifications that decrease the scope of the lease, the Company accounts for the remeasurement of the lease liability by decreasing the carrying amount of the right-of-use asset to reflect the partial or full termination of the lease, and recognize in profit or loss any gain or loss relating to the partial or full termination of the lease.
The Company presents right-of-use assets that do not meet the definition of investment and lease liabilities as a separate line item respectively in the statement of financial position.
The Company has elected not to recognize right-of-use assets and lease liabilities for short-term leases of machinery that have a lease term of 12 months or less and leases of low-value assets, including IT equipment. The Company recognizes the lease payments associated with these leases as an expense on a straight-line basis over the lease term.
3) Lessor
When the Company acts as a lessor, it determines at lease commencement whether each lease is a finance lease or an operating lease. To classify each lease, the Company makes an overall assessment of whether the lease transfers to the lessee substantially all of the risks and rewards of ownership incidental to ownership of the underlying asset. If this is the case, then the lease is a finance lease; if not, then the lease is an operating lease. As part of this assessment, the Company considers certain indicators such as whether the lease is for the major part of the economic life of the asset.
When the Company is an intermediate lessor, it accounts for its interests in the head lease and the sub-lease separately. It assesses the lease classification of a sub-lease with reference to the right-of -use asset arising from the head lease, not with reference to the underlying asset. If a head lease is a short-term lease to which the Company applies the exemption described above, then it classifies the sub-lease as an operating lease.
If an arrangement contains lease and non-lease components, the Company applies IFRS15 to allocate the consideration in the contract.
(j) Intangible assets
Intangible assets with finite useful lives that are acquired separately are initially measured at cost and subsequently measured at cost less accumulated amortization and accumulated impairment loss.
Amortization is recognized on a straight-line basis over the estimated useful lives of intangible assets from the date that they are available for use. The estimated useful life, residual value, and amortization method are reviewed at the end of each reporting period, with the effect of any changes in estimate accounted for on a prospective basis. The residual value of an intangible asset with a finite useful life should be assumed to be zero unless the Company expects to dispose of the intangible asset before the end of its economic life.
(k) Oil and gas interests and exploration expenses
All geological and geophysical exploration costs are charged to current income.
The costs of drilling exploratory wells (“exploration well expenses”) in sites that have not yet proven to contain reserves of commercial quantities (“unproven sites”) are initially charged to current income. Exploration well expenses are subsequently capitalized as part of “oil and gas interests” accounts when (i) sites are proven to contain mineral reserves of commercial quantities and (ii) the construction of the wellhead equipment or offshore production platforms and flow lines is complete. The exploration expenses