Finance and Operating Lease Obligations
|9 Months Ended|
Sep. 30, 2019
|Finance and Operating Lease Obligations||
Note 10 – Finance and Operating Lease Obligations
As more fully discussed in Note 1, we adopted ASU No. 2016-02, Leases (Topic 842), which requires leases with durations greater than 12 months to be recognized on the balance sheet, effective January 1, 2019, using the modified retrospective approach.
Generally, we use our estimated weighted average cost of capital at lease commencement as our interest rate, as most of our operating leases do not provide a readily determinable implicit interest rate.
The following table presents our lease-related assets and liabilities at September 30, 2019:
The following table presents certain information related to lease expense for finance and operating leases for the three and nine months ended September 30, 2019:
(1) The depreciation for the nine months ended September 30, 2019 has been adjusted for depreciation recorded in the prior year.
(2) Expenses are included in general and administrative expenses in our condensed consolidated statements of operations.
The following table presents supplemental cash flow information for the nine months ended September 30, 2019:
Aggregate future minimum rentals under right-to-use operating and finance leases are as follows:
As of September 30, 2019, the Company is in default of substantially all its finance lease obligations, therefore the aggregate future minimum rentals and accrued interest under finance leases in the amount of $0.6 million are deemed to be immediately due.
The entire disclosure for debt and capital lease obligations can be reported. Information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants. Also includes descriptions and amounts of capital leasing arrangements that consist of direct financing, sales type and leveraged leases. Disclosure may include the effect on the balance sheet and the income statement resulting from a change in lease classification for leases that at inception would have been classified differently had guidance been in effect at the inception of the original lease.
Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef