Subsequently, the right of use is amortised over the expected term of the lease, while the lease liability is stated at amortised cost, i.e. adding the interest recognised in the financial result, and deducting the amount of the lease payments made.
The Group applies the two exemptions allowed by IFRS 16, and as a result leases with a term of 12 months or less and leases of assets with individual value when new of less than USD 5,000 are not recognised in the balance sheet. Consequently, the payments on these leases are recognised on a straight-line basis over the lease term in the income statement.
If the Group performs a sale and leaseback operation – consisting of selling an asset to a third party and then renting it back as lessee – which is classified as a sale under IFRS 15, it measures the right-of-use asset resulting from the lease as the proportion of the asset’s previous book value that corresponds to the right of use retained by the Group. Also, the gain on the sale of the asset by the Group only corresponds to the proportion of the right of use actually transferred to the third party. The lease liability is not adjusted, unless the conditions of the sale or lease do not reflect market values.
Off-balance sheet commitments presented in note 21.1.1 concern:
The accounting treatment of a lease contract in which the Group is lessor depends on the classification of the contract. For a finance lease which transfers substantially all risks and rewards inherent to ownership of the underlying asset to the lessee, the Group recognises a financial asset in its balance sheet instead of the initial fixed asset; in this case, the receivable is equal to the discounted value of future lease payments.
| (in millions of euros) | 31/12/2021 | Increases (1) | Decreases | Changes in the scope of consolidation | Other movements (2) | 31/12/2022 |
|---|---|---|---|---|---|---|
| Land and buildings | Land and buildings 31/12/20215,152 |
Land and buildings Increases (1)250 |
Land and buildings Decreases- |
Land and buildings Changes in the scope of consolidation(33) |
Land and buildings Other movements (2)133 |
Land and buildings 31/12/2022 5,502 |
| Other installations, plant, machinery, equipment & other | Other installations, plant, machinery, equipment & other 31/12/20211,052 |
Other installations, plant, machinery, equipment & other Increases (1)103 |
Other installations, plant, machinery, equipment & other Decreases- |
Other installations, plant, machinery, equipment & other Changes in the scope of consolidation1 |
Other installations, plant, machinery, equipment & other Other movements (2)(48) |
Other installations, plant, machinery, equipment & other 31/12/2022 1,108 |
| Gross value | Gross value31/12/20216,204 | Gross valueIncreases (1)353 | Gross valueDecreases- | Gross valueChanges in the scope of consolidation(32) | Gross valueOther movements (2)85 | Gross value 31/12/2022 6,610 |
| Land and buildings | Land and buildings 31/12/2021(1,529) |
Land and buildings Increases (1)(562) |
Land and buildings Decreases- |
Land and buildings Changes in the scope of consolidation14 |
Land and buildings Other movements (2)135 |
Land and buildings 31/12/2022 (1,942) |
| Other installations, plant, machinery, equipment & other | Other installations, plant, machinery, equipment & other 31/12/2021(529) |
Other installations, plant, machinery, equipment & other Increases (1)(163) |
Other installations, plant, machinery, equipment & other Decreases- |
Other installations, plant, machinery, equipment & other Changes in the scope of consolidation1 |
Other installations, plant, machinery, equipment & other Other movements (2)74 |
Other installations, plant, machinery, equipment & other 31/12/2022 (617) |
| Depreciation and impairment | Depreciation and impairment31/12/2021(2,058) | Depreciation and impairmentIncreases (1)(725) | Depreciation and impairmentDecreases- | Depreciation and impairmentChanges in the scope of consolidation15 | Depreciation and impairmentOther movements (2)209 | Depreciation and impairment 31/12/2022 (2,559) |
| NET VALUE | NET VALUE31/12/20214,146 | NET VALUEIncreases (1)(372) | NET VALUEDecreases- | NET VALUEChanges in the scope of consolidation(17) | NET VALUEOther movements (2)294 | NET VALUE 31/12/2022 4,051 |
(1) Increases concern right-of-use assets recognised in respect of new leases.
(2) Other movements include the effect of contract revisions on right-of-use assets and translation differences.
The main impacts of recognition in the income statement of lease contracts as lessee, in accordance with IFRS 16, are as follows:
| (in millions of euros) | 2022 | 2021 |
|---|---|---|
| Income from subleases | Income from subleases 2022 7 |
Income from subleases 202156 |
| Variable lease expenses | Variable lease expenses 2022 (53) |
Variable lease expenses 2021(53) |
| Expenses on short-term leases or leases of low-value assets | Expenses on short-term leases or leases of low-value assets 2022 (108) |
Expenses on short-term leases or leases of low-value assets 2021(70) |
| Income from sale and leaseback operations | Income from sale and leaseback operations 2022 - |
Income from sale and leaseback operations 2021- |
| Operating profit before depreciation and amortisation | Operating profit before depreciation and amortisation 2022 (154) |
Operating profit before depreciation and amortisation2021(67) |
| Depreciation on right-of-use assets | Depreciation on right-of-use assets 2022 (725) |
Depreciation on right-of-use assets 2021(723) |
| Operating profit | Operating profit 2022 (879) |
Operating profit2021(790) |
| Interest expense on the lease liability | Interest expense on the lease liability 2022 (77) |
Interest expense on the lease liability 2021(75) |
| INCOME BEFORE TAXES OF CONSOLIDATED COMPANIES | INCOME BEFORE TAXES OF CONSOLIDATED COMPANIES 2022 (956) |
INCOME BEFORE TAXES OF CONSOLIDATED COMPANIES2021(865) |
