XML 23 R12.htm IDEA: XBRL DOCUMENT

Operating Leases

3 Months Ended

Mar. 31, 2019

6.	Operating Leases

The Company has various operating lease agreements for its offices and service delivery centers. The Company has determined that the risks and benefits related to the leased properties are retained by the lessors. Accordingly, these are accounted for as operating leases.

These lease agreements are for terms ranging from two to 11 years and, in most cases, provide for rental escalations ranging from 1.75% to 10%. Most of these agreements are renewable at the mutual consent of the parties in the contract.

The Company adopted the

ASU Topic 842- Leases

beginning January 1, 2019 and adopted the practical expedients consistently for all its leases. Accordingly, the Company:

Did not reassess whether any expired or existing contracts are or contain leases.

Did not reassess the lease classification for any expired or existing leases.

Did not reassess initial direct costs for any existing leases.

In addition, the Company elected to retrospectively determine the lease term and assess impairment of right of use asset.

At the date of transition, the Company recognized an operating lease liability and right of use asset. The amount of lease liability is equal to the present value of the remaining lease payments as of January 1, 2019 discounted using the incremental borrowing rate of each respective country.

A right of use asset is measured at the amount of the lease liability adjusted for the amount of deferred straight-line rent, prepaid rent and lease incentive allowances previously recognized.

The table below summarizes the amounts recognized in the financial statements related to operating leases:

	For the three months ended
	March 31, 2019

Rent expense for long-term operating leases	$	415
Rent expense for short-term leases		86
Total rent expense	$	501

The following table presents the maturity profile of the Company’s operating lease liabilities based on the contractual undiscounted payments with a reconciliation of the these amounts to the remaining net present value of the operating lease liability reported in the consolidated balance sheet as of March 31, 2019.

Year	Amount

2019	$	1,399
2020		1,769
2021		1,356
2022		1,269
2023		1,047
2024 and thereafter		5,686
Total lease payments		12,526
Less: Interest		(3,811	)
Net present value of lease liabilities	$	8,715

Current portion	$	1,147
Long term portion		7,568
Total	$	8,715

The weighted average remaining lease terms and discount rates for all of our operating leases as of March 31, 2019 were as follows:

Weighted average lease term			78 months
Weighted average discount rate			8.96	%