On the date of commencement of the lease, the PZU Group classifies the given lease agreement as:
- inance lease – if substantially all of the risks and benefits following from the holding of the underlying asset are transferred or as
- operating lease – if the above conditions are not satisfied.
Classifying the given lease agreement, the PZU Group takes into account, among others, the fact whether the lease period constitutes a larger part of the economic useful life of the asset.
Finance lease
On the lease commencement date, the PZU Group recognizes the receivable in the amount of the net lease investment, i.e. the current value of minimum lease payments and unguaranteed residual value, if any, ascribed to the PZU Group. During the lease period the PZU Group recognizes interest income on the lease receivables.
Operating leases
Operating lease contracts apply mainly to properties.
Operating lease payments are recognized in the profit and loss account as revenue on a straight-line basis over the term of the lease.