10.3.2 Finance lease receivables
Accounting policies
Finance leases are disclosed in the statement of financial position as receivables, at amounts equal to the net investment in the lease less the principal component of lease payments for a given financial year calculated based on a pattern reflecting a constant periodic rate of return on the lessor’s net investment outstanding in respect of the finance lease.
Finance income from interest on a finance lease is disclosed in the relevant reporting periods based on a pattern reflecting a constant periodic rate of return on the net investment outstanding in respect of the finance lease.
Income from operating leases is recognised in the statement of comprehensive income on a straight-line basis over the lease term.
The Group has developed and operates the “LOTOS Family” Franchise Programme, which defines the procedures for managing service stations. The Group has entered into franchise agreements with entities operating service stations at their own risk and for their own account (Partners). Receivables under franchise agreements represent mainly expenditure on the design of DOFO service stations operated by dealers under agreements executed for periods from 5 to 10 years.
| Lease payments | Present value of lease payments | |||
|---|---|---|---|---|
| Dec 31 2021 | Dec 31 2020 | Dec 31 2021 | Dec 31 2020 | |
| Up to 1 year | 4.1 | 5.1 | 4.1 | 5.1 |
| From 1 to 5 years | 7.2 | 7.7 | 7.1 | 7.6 |
| Total | 11.3 | 12.8 | 11.2 | 12.7 |
| Less unrealised finance income | (0.1) | (0.1) | – | – |
| Present value of lease payments | 11.2 | 12.7 | 11.2 | 12.7 |
| including: | ||||
| long-term portion | 7.1 | 7.6 | ||
| short-term portion | 4.1 | 5.1 | ||