134 Woodside Petroleum Ltd|Annual Report 2018
(c) New and amended accounting standards and interpretations
issued but not yet eective
AASB 16 provides a new lessee accounting model which requires
a lessee to recognise assets and liabilities for all leases with a term
of more than 12 months unless the underlying asset is of low value.
The depreciation of the right of use asset and interest on the lease
liability will be recognised in the consolidated income statement.
Transition to AASB 16
The Group plans to adopt the modiﬁed retrospective approach
on transition, where the lease liability is measured at the present
value of future lease payments on the initial date of application,
being 1 January 2019. The lease asset is measured as if AASB 16
had been applied from the commencement of the lease with any
dierence between the lease asset and liability recognised as an
adjustment to opening retained earnings. Under this transition
method, prior period comparative ﬁnancial statements are not
required to be restated and the cumulative impact of applying
the standard is recognised in opening retained earnings on the
initial date of application, being 1 January 2019. The Group has
completed changes to the contracting process and the system
implementation to ensure ongoing compliance with AASB 16.
The Group has completed an impact assessment of AASB 16 and
estimates the following impact on its consolidated statement of
ﬁnancial position as at 31 December 2018:
Estimated Impact on Consolidated
Statement of Financial Position1
Right of use assets
Right of use lease liabilities
1. The net eect of the lease liabilities and right of use assets, adjusted for deferred
tax will be recognised against retained earnings.
The leases recognised by the Group under AASB 16 predominantly
relate to LNG vessels and property.
On adoption of AASB 16, operating lease expense will no longer
be recognised in gross proﬁt, depreciation of right-of-use assets
will be recognised in other costs and lease ﬁnancing costs will be
recognised in net ﬁnancing costs.
NOTES TO THE FINANCIAL STATEMENTS E. OTHER ITEMS
for the year ended 31 December 2018