On 1 July 2018, Elexxon PLC (Elexxon) obtained the right to use a manufacturing facility under a six-year lease. The required yearly lease payments were GHc22 million, beginning from 30 June 2019. The lease agreement specified that the lease payments (except yearly baseline payments of GH4 million included in the GH22 million) would increase every two years on the basis of increase in the Consumer Price Index (CPI) for the preceding 24 months. The CPI at the commencement date was 125 . Additionally, Elexxon is required to pay GH2.5 million every year if cost savings in that year is at least GH\&18 million. Elexxon's cost savings achieved with its other assets had been averaging GH\&13 million before the start of the lease. Elexxon incurred initial direct cost of GHc 1.5 million. Elexxon has also guaranteed GHS0.4m of the residual value of the asset. The residual value of the asset at the end of the lease term was estimated on 1 July 2018 at GHS1.5 million. There has not been any change in the guaranteed residual value since 1 July 2018. The rate implicit in the lease, which should have been 10% per annum, was not readily determinable by Elexxon. Elexxon's incremental borrowing rate was 13% per annum. At 30 June 2020 , the CPI was revised to 138 . The actual cost savings achieved by Elexxon in the years ended 30 June 2019 and 30 June 2020 were GHe 15 million and GHc20.5 million respectively. Elexxon has also guaranteed GHS0.4m of the residual value of the asset. The residual value of the asset at the end of the lease term was estimated on 1 July 2018 at GHS1.5 million. There has not been any change in the guaranteed residual value since 1 July 2018. The rate implicit in the lease, which should have been 10% per annum, was not readily determinable by Elexxon. Elexxon's incremental borrowing rate was 13\% per annum. At 30 June 2020 , the CPI was revised to 138 . The actual cost savings achieved by Elexxon in the years ended 30 June 2019 and 30 June 2020 were GH15 million and GH\&20.5 million respectively. Required In accordance with IFRS 16, discuss how the above lease would affect Elexxon's financial statements for the two years ended 30 June 2019 and 2020. Note: he cumulative discount factors based on 10% and 13% are provided below