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Lease Arrangements
12 Months Ended
Dec. 31, 2019
Disclosure Of Quantitative Information About Leases For Lessee [Abstract]  
Lease Arrangements

17.

LEASE ARRANGEMENTS

a.Right-of-use Assets

 

 

 

December 31, 2019

 

 

 

NT$

 

 

 

(In Millions)

 

Land and buildings

 

 

 

 

Handsets base stations

 

$

6,845

 

Others

 

 

1,916

 

Equipment

 

 

2,603

 

 

 

$

11,364

 

 

 

 

Year Ended

December 31,

2019

 

 

 

NT$

 

 

 

(In Millions)

 

Additions to right-of-use assets

 

$

3,803

 

Depreciation charge for right-of-use assets

 

 

 

 

Land and buildings

 

 

 

 

Handsets base stations

 

$

2,728

 

Others

 

 

821

 

Equipment

 

 

419

 

 

 

$

3,968

 

b.Lease liabilities

 

 

 

December 31,

2019

 

 

 

NT$

 

 

 

(In Millions)

 

Lease liabilities

 

 

 

 

Current

 

$

3,291

 

Non-current

 

 

6,467

 

 

 

$

9,758

 

Range of discount rate for lease liabilities is as follows:

 

 

 

December 31,

2019

Land and buildings

 

 

Handsets base stations

 

0.58%-1.18%

Others

 

0.58%-9.00%

Equipment

 

0.58%-4.50%

c.Important lease-in activities and terms

The Company mainly enters into lease-in agreements of land and buildings for handsets base stations located all over Taiwan with lease terms from 1 to 20 years.  There’s no clause for bargain purchase options to acquire the assets at the expiry of the lease periods in the agreement.  In most lease-in agreements of handsets base station agreements, the Company is able to terminate the agreement prior to the maturity date provided that the premise the Company fails to meet the purpose to build telecommunication equipment due to legal restriction, controversial events, or other events.

 

The Company also leases land and buildings for the use of offices, server rooms, and stores with lease terms from 1 to 30 years.  Most of the lease agreements for national land adjust the lease payment according to the changes of present values of land announced by the authority.  At the expiry of the lease term, the Company does not have bargain purchase options to acquire the assets.

 

The lease agreements for equipment include a contract between Chunghwa and ST-2 Satellite Ventures Pte., Ltd. to lease capacity on the ST-2 satellite.  The information of lease agreements with related parties, please refer to Note 38 to the consolidated financial statements for details.

 

d.Other lease information

 

The future aggregate minimum lease payments under non-cancellable operating leases are as follows:

2018

 

 

December 31,

2018

 

 

 

NT$

 

 

 

(In Millions)

 

Within one year

 

$

3,439

 

Longer than one year but within five years

 

 

6,375

 

Longer than five years

 

 

744

 

 

 

$

10,558

 

2019

 

 

Year Ended

December 31,

2019

 

 

 

NT$

 

 

 

(In Millions)

 

Expenses relating to low-value asset leases

 

$

7

 

Expenses relating to variable lease

    payments not included in the measurement

    of lease liabilities

 

$

6

 

Total cash outflow for leases

 

$

3,826

 

The Company leases certain equipment which qualify as low-value asset leases.  The Company has elected to apply the recognition exemption and, thus, not to recognize right-of-use assets and lease liabilities for these leases.

Lease-out arrangements under operating leases for freehold property, plant, and equipment and investment properties are set out in Notes 16 and 18 to the consolidated financial statements.