##### Leases

AASB Leases, Determining whether an Arrangement contains a Lease, AASB Leases, Determining whether an Arrangement contains a Lease, 16 replaces AASB 117 AASB Interpretation 4 Operating Leases-Incentives Evaluating the Substance of Transactions AASB Interpretation 115 and AASB Interpretation 127 Involving the Legal Form of a Lease. AASB 16 sets out the principles for the recognition, measurement, presentation and disclosure of leases and requires lessees to account for all leases on the balance sheet by recording a Right-Of-Use (RoU) asset and a lease liability except for leases that are shorter than 12 months and leases where the underlying asset is of low value (deemed to be below $10,000). AASB 16 also requires the lessees to separately recognise the interest expense on the lease liability and the depreciation expense on the right-of-use asset, and remeasure the lease liability upon the occurrence of certain events (e.g. a change in the lease term, a change in future lease payments resulting from a change in an index or rate used to determine those payments). The amount of the remeasurement of the lease liability will generally be recognised as an adjustment to the RoU asset. Lessor accounting under AASB 16 is substantially unchanged from AASB 117. Lessors will continue to classify all leases using the same classification principle as in AASB 117 and distinguish between two types of leases: operating and finance leases. The effective date is for annual reporting periods beginning on or after 1 January 2019. DJPR intends to adopt AASB 16 in 2019–20 financial year when it becomes effective. DJPR will apply the standard using a modified retrospective approach with the cumulative effect of initial application recognised as an adjustment to the opening balance of accumulated surplus at 1 July 2019, with no restatement of comparative information. Various practical expedients are available on adoption to account for leases previously classified by a lessee as operating leases under AASB 117. DJPR will elect to use the exemptions for all short-term leases (lease term less than 12 months) and low value leases (deemed to be below $10,000). In addition, AASB 2018–8 – Amendments to Australian Accounting Standards – Right-of-Use Assets (RoU) of Not-for-Profit Entities allows a temporary option for not-for-profit entities to not measure RoU assets at initial recognition at fair value in respect of leases that have significantly below-market terms, since further guidance is expected to be developed to assist not-for-profit entities in measuring RoU assets at fair value. The Standard requires an entity that elects to apply the option (i.e. measures a class or classes of such RoU assets at cost rather than fair value) to include additional disclosures. DJPR intends to choose the temporary relief to value the RoU asset at the present value of the payments required (at cost). DJPR has performed a detailed impact assessment of AASB 16 and the potential impact in the initial year of application has been estimated as follows: increase in RoU ($217.5 million), • increase in related depreciation ($29.1 million), • increase in lease liability ($217.5 million), • increase in related interest ($8.4 million) calculated using effective interest method, and • decrease in rental expense ($29.8 million). •

#### Revenue and Income

AASB 15 supersedes AASB 118 Revenue, AASB 111 Construction Contracts and related Interpretations and it applies, with limited exceptions, to all revenue arising from contracts with its customers. AASB 15 establishes a five-step model to account for revenue arising from an enforceable contract that imposes a sufficiently specific performance obligation on an entity to transfer goods or services. AASB 15 requires entities to only recognise revenue upon the fulfilment of the performance obligation. Therefore, entities need to allocate the transaction price to each performance obligation in a contract and recognise the revenue only when the related obligation is satisfied.

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DJPR Annual Report 2018–19