BIRLESIM_2021_ANNUAL REPORT

BİRLEŞİM MÜHENDİSLİK 2021 ANNUAL REPORT 161 Birleşim Mühendislik Isıtma Soğutma Havalandırma Sanayi Ticaret A.Ş. and Its Subsidiary (All amounts expressed in Turkish Lira (“TL”)) Notes to the Consolidated Financial Statements For the Year Ended 31 December 2021 2. BASIS OF PRESENTATION OF THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) (k) Summary of Significant Accounting Policies (continued) Leases (continued) Right-of-use asset The right-of-use asset is initially recognized at cost comprising of: a) Amount of the initial measurement of the lease liability; b) Any lease payments made at or before the commencement date, less any lease incentives received; c) Any initial direct costs incurred by the Group. To apply a cost model, the Group measure the right-of-use asset at cost: a) Less any accumulated depreciation and any accumulated impairment losses; and b) Adjusted for any remeasurement of the lease liability. The Group applies the straight-line method to depreciate the right of use. If the lease transfers ownership of the underlying asset to the lessee by the end of the lease term or if the cost of the right-of-use asset reflects that the lessee will exercise a purchase option, the Group depreciate the right-of-use asset from the commencement date to the end of the useful life of the underlying asset. Otherwise, the Group depreciate the right-of-use asset from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. The Group apply TAS 36 Impairment of Assets to determine whether the right-of-use asset is impaired and to account for any impairment loss identified. Lease liability At the commencement date, The Group measure the lease liability at the present value of the lease payments that are not paid at that date. The lease payments are discounted using the interest rate implicit in the lease, if that rate can be readily determined. If that rate cannot be readily determined, the Group use the lessee’s incremental borrowing rate. At the commencement date, the lease payments included in the measurement of the lease liability comprise the following payments for the right to use the underlying asset during the lease term that are not paid at the commencement date: a) Fixed payments, less any lease incentives receivable, b) Variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement date, c) The exercise price of a purchase option if the Group is reasonably certain to exercise that optio, and d) Payments of penalties for terminating the lease, if the lease term reflects the Group exercising an option to terminate the lease. After the commencement date, the Group measure the lease liability by: a) Increasing the carrying amount to reflect interest on the lease liability, b) Reducing the carrying amount to reflect the lease payments made, and c) Remeasuring the carrying amount to reflect any reassessment or lease modifications, or to reflect revised insubstance fixed lease payments.