IBERSOL | Annual Report 2020

Consolidated Financial Statements which represents the interest rate that the Group would have to pay to borrow for a similar term, and with a similar guarantee, the funds necessary to obtain an asset of an equivalent value to the asset under right of use in a similar economic context. In order to determine the lease term, in cases where extension and / or termination options are defined, the Board of Directors evaluates the projected business plans and determines the lease term that best reflects their expectations of permanence in the contract. This expectation can be adjusted according to changes in business conditions. Lease liabilities are remeasured due to revaluations or changes to the lease. Interest on leases is shown in the consolidated statement of cash flows, in payments related to cash flows arising from financing activities. The amendment to IFRS 16 within Covid-19, allowed the use of a practical expedient for tenants, which exempts from the evaluation of the bonuses attributed by the les- sors qualify modifications to the leases. The Group opted for the application of this exemption, accounting for changes in rental payments, as variable rental rents in the periods in which the event or condition that led to the reduction in payment occurs. The practical expedient is only applicable when the following conditions are cumu- latively met: a) the change in lease payments results in a revised fee for the lease that is sub- stantially equal to, or less than, the fee immediately prior to the change; b) any reduction in lease payments only affects payments due on or before 30 June 2021; and c) there are no substantive changes to other lease terms and conditions. 2.20 PROFIT PER SHARE Basic The basic profit per share is calculated by dividing the profit payable to shareholders by the weighted mean number of ordinary shares issued during the period, exclud- ing ordinary shares acquired by the company and held as own shares (Note 16). Diluted The profit diluted per share is calculated by dividing the profit payable to sharehold- ers – adjusted by the dividends of convertible preference shares, convertible debt interest and gains and expenses resulting from the conversion – by the average number of ordinary shares issued during the period plus the average number of ordinary shares that may be issued in the conversion of ordinary shares that may be potentially used in the dilution. 330