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14 Summary of significant accounting policies (continued)24.3 Other accounting policies (continued)3Property, plant and equipment (continued)4An item of property, plant and equipment is derecognised upon disposal, with any gain or loss arising (calculated as the difference 5between the net disposal proceeds and the carrying amount of the item) included in the consolidated income statement in the year 6of disposal.7Leases8The Group has applied IFRS 16 only to those contracts that were previously identified as a lease under IAS 17 Leases; any contracts not 9previously identified as leases have not been reassessed for the purposes of adopting IFRS 16. Accordingly, the definition of a lease under 10IFRS 16 has only been applied to contracts entered into on or after 1 January 2019.11Leases, other than those with a lease period of less than one year at inception, or where the original cost of the asset acquired would be 12a negligible amount (see Note 22), are capitalised at inception at the present value of the minimum lease payments. Lease payments are 13apportioned between the finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining 14balance of the liability. Finance charges are charged directly against income.15ROU assets are included within property, plant and equipment at cost and depreciated over their estimated useful lives, which normally 16equates to the lives of the leases, after considering anticipated residual values.17ROU assets which are sub-leased to customers are classified as finance leases if the lease agreements transfer substantially all the risks 18and rewards of usage to the lessee. All other sub-leases are classified as operating leases. When assets are subject to finance leases, 19the present value of the sub-lease is recognised as a receivable, net of allowances for expected credit losses and the related ROU asset 20is derecognised. The difference between the gross receivable and the present value of the receivable is recognised as unearned finance 21lease income.22Finance lease interest income is recognised over the term of the lease using the net investment method (before tax) so as to give a 23constant rate of return on the net investment in sub-leases. Operating lease rental income is recognised on a straight-line basis over the 24life of the lease.25Cash and cash equivalents26Cash and cash equivalents consist of cash at bank and in hand, short-term deposits (and customer balances).27Financial assets28Financial assets are recognised when the Group becomes party to the contracts that give rise to them. The Group classifies financial 29assets at inception as financial assets at amortised cost, financial assets at fair value through profit or loss or financial assets at fair value 30through other comprehensive income.31Financial assets at amortised cost are non-derivative financial assets with fixed or determinable payments that are not quoted in an 32active market. On initial recognition, financial assets at amortised cost are measured at fair value net of transaction costs.33Trade receivables are generally accounted for at amortised cost. Expected credit losses are recognised for financial assets recorded at 34amortised cost, including trade receivables. Expected credit losses are calculated by using an appropriate probability of default, taking 35accounts of a range of possible future scenarios and applying this to the estimated exposure of the Group at the point of default.36Financial assets at fair value through profit or loss include derivative financial instruments. Financial assets through profit or loss are 37measured initially at fair value with transaction costs taken directly to the consolidated income statement. Subsequently, the fair values 38are remeasured, and gains and losses are recognised in the consolidated income statement. 39Financial assets at fair value through other comprehensive income comprise equity investments that are designated as such on 40acquisition. These investments are measured initially at fair value. Subsequently, the fair values are remeasured, and gains and losses are 41recognised in the consolidated statement of comprehensive income. 42Financial liabilities43Financial liabilities comprise trade and other payables, interest-bearing loans and borrowings, contingent consideration, ante-post bets, 44guarantees and derivative financial instruments. On initial recognition, financial liabilities are measured at fair value net of transaction 45costs where they are not categorised as financial liabilities at fair value. Financial liabilities measured at fair value include contingent 46consideration, derivative financial instruments, ante-post bets and guarantees.47Financial liabilities at fair value are measured initially at fair value, with transaction costs taken directly to the consolidated income 48statement. Subsequently, the fair values are remeasured and gains and losses from changes therein are recognised in the consolidated 49income statement.50Trade and other payables are held at amortised cost and include amounts due to clients representing customer deposits and winnings, 51which are matched by an equal and opposite amount within cash and cash equivalents. 52All interest-bearing loans and borrowings are initially recognised at fair value net of issue costs associated with the borrowing. 53After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost using the effective interest 54rate method.55All financial liabilities are recorded as cash flows from financing activities. 561 Overview 8 Strategic report 88 Governance 140  Financial statements57Entain plc Annual Report 2023 16958Notes to the consolidated  59financial statements 60for the year ended  6131 December 2023