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21. Leasing

The Group has entered into several leases for vehicles and machinery. The leases have lease terms of three to four years.

The development of the lease liabilities is as follows:

in thousand EUR   2020   2019
At 1 January   2 173   2 173
Additions   1 592   1 514
Interest expenses   127   65
Redemption   –596   –1 362
Payments   –942   –217
Currency effects   –4  
At 31 December   2 350   2 173
Thereof current   1 108   776
Thereof non-current   1 242   1 397
Right-of-use assets
in thousand EUR   Leased buildings
and building
improvements
  Leased
machinery
and vehicles
  Total
At 1 January 2019   131   3 059   3 190
Additions     1 166   1 166
Depreciation   –29   –1 077   –1 106
Disposals      
Currency effects     0   0
At 31 December 2019   102   3 148   3 250
 
Additions   407   1 185   1 592
Depreciation   –70   –1 281   –1 351
Disposals     –71   –71
Currency effects   –5   0   –4
At 31 December 2020   434   2 981   3 415

As of 31 December, other operating expenses contain the following expenses in connection with leases:

in thousand EUR   2020   2019
Expenses for short-term leases   330   335
Expenses for leases of low value   1   1
Total operating lease expenses   331   336
Accounting policies

Each contract is assessed at inception, whether it constitutes or contains a lease. This is given, when the contract conveys the right to control the use of the identified asset for the period of use in exchange for substantially all of the economic benefits. Precious Woods elected to apply the recognition exemptions to short-term leases and low value leases. For such leases no right-of-use asset and no lease liability are recorded, instead the lease payments are recognized as operating expenses.

At the commencement date, the lease liability is measured at the present value of future lease payments to be made over the lease term. Incremental borrowing rates are used for the discount rates. The right-of-use asset corresponds initially to the lease liability, plus any initial direct costs, advance payments and dismantling or removing costs. The right-of-use asset is depreciated on a straight-line basis over the shorter of the lease term or the useful life. If at the end of the lease term the ownership of the leased asset is transferred to the lessee or the lessee is reasonably certain to exercise the purchase option, then the right-of-use asset has to be depreciated according to the useful life defined for property, plant and equipment.