7. Operating Leases

The Company has various 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 eleven 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 to the contract.

The Company adopted ASU 2016-02, effective January 1, 2019, and applied the practical expedients consistently for all of 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 the right-of-use asset.

Under the standard, the Company recognizes an operating lease liability and right-of-use asset. The amount of right-of use asset is equal to the present value of the remaining lease payments discounted using the incremental borrowing rate of each respective country. Modifications, if any are recalculated and corresponding adjustments are made to the carrying values of both the lease liability and right-of-use assets.

A right-of-use asset is measured as 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 years presented (in thousands):


	Year Ended
	December 31, 2020		December 31, 2019

Rent expense for long-term operating leases	$	1,667	$	1,813
Rent expense for short-term leases		619		297
Total rent expense	$	2,286	$	2,110

The following table presents the maturity profile of the Company’s operating lease liabilities based on the contractual undiscounted payments with a reconciliation of these amounts to the remaining net present value of the operating lease liability reported in the consolidated balance sheet as of December 31, 2020 (in thousands):


Year	Amount

2021	$	1,565
2022		1,531
2023		1,261
2024		1,027
2025		1,043
2026 and thereafter		3,490
Total lease payments		9,917
Less: Interest		(2,595)
Net present value of lease liabilities	$	7,322

Current portion	$	990
Long-term portion		6,332
Total	$	7,322

The weighted average remaining lease terms and discount rates for all of our operating leases as of December 31, 2020 were as follows:


Weighted-average lease term remaining		65 months
Weighted-average discount rate		8.68%