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LEASES

12 Months Ended

Jun. 30, 2020

Leases [Abstract]

LEASES

NOTE 14 — LEASES

We have operating and finance leases for datacenters, corporate offices, research and development facilities, retail stores, and certain equipment. Our leases have remaining lease terms of 1 year to 20 years, some of which include options to extend the leases for up to 5 years, and some of which include options to terminate the leases within 1 year.

The components of lease expense were as follows:

(In millions)
Year Ended June 30,		2020					2019				2018
Operating lease cost		$	2,043			$	1,707			$	1,585
Finance lease cost:
Amortization of right-of-use assets		$	611			$	370			$	243
Interest on lease liabilities			336				247				175
Total finance lease cost		$	947			$	617			$	418

Supplemental cash flow information related to leases was as follows:

(In millions)
Year Ended June 30,		2020					2019				2018
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases		$	1,829			$	1,670			$	1,522
Operating cash flows from finance leases			336				247				175
Financing cash flows from finance leases			409				221				144
Right-of-use assets obtained in exchange for lease obligations:
Operating leases			3,677				2,303				1,571
Finance leases			3,467				2,532				1,933

Supplemental balance sheet information related to leases was as follows:

(In millions, except lease term and discount rate)
June 30,		2020				2019
Operating Leases
Operating lease right-of-use assets		$	8,753			$	7,379
Other current liabilities		$	1,616			$	1,515
Operating lease liabilities			7,671				6,188
Total operating lease liabilities		$	9,287			$	7,703
Finance Leases
Property and equipment, at cost		$	10,371			$	7,041
Accumulated depreciation			(1,385	)			(774	)
Property and equipment, net		$	8,986			$	6,267
Other current liabilities		$	540			$	317
Other long-term liabilities			8,956				6,257
Total finance lease liabilities		$	9,496			$	6,574
Weighted Average Remaining Lease Term
Operating leases			8 years				7 years
Finance leases			13 years				13 years
Weighted Average Discount Rate
Operating leases			2.7%				3.0%
Finance leases			3.9%				4.6%

Maturities of lease liabilities were as follows:

(In millions)
Year Ending June 30,		Operating Leases				Finance Leases
2021		$	1,807			$	880
2022			1,652				894
2023			1,474				903
2024			1,262				916
2025			1,000				1,236
Thereafter			3,122				7,194
Total lease payments			10,317				12,023
Less imputed interest			(1,030	)			(2,527	)
Total		$	9,287			$	9,496

As of June 30, 2020, we have additional operating and finance leases, primarily for datacenters, that have not yet commenced of $3.4 billion and $3.5 billion, respectively. These operating and finance leases will commence between fiscal year 2021 and fiscal year 2023 with lease terms of 1 year to 16 years.

During fiscal year 2020, we recorded an impairment charge of $161 million to operating lease right-of-use assets due to the closing of our Microsoft Store physical locations.

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- References

No definition available.

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- Definition

The entire disclosure for lessee entity's leasing arrangements including, but not limited to, all of the following: (a.) The basis on which contingent rental payments are determined, (b.) The existence and terms of renewal or purchase options and escalation clauses, (c.) Restrictions imposed by lease agreements, such as those concerning dividends, additional debt, and further leasing.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/otherTransitionRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 840
-URI http://asc.fasb.org/topic&trid=2208923

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