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Finance Lease Receivable | 3 Months Ended | 12 Months Ended
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Mar. 31, 2022 | Dec. 31, 2021
Text Block [Abstract] |  |
Finance Lease Receivable | NOTE 6. FINANCE LEASES RECEIVABLE The Company has entered into finance lease arrangements for certain of its rental assets . The initial terms of the leases entered into range from three to ten years . The value of the finance lease receivable is comprised of the following:
|  | Minimum lease payments and unguaranteed residual value |  |  | Present value of minimum lease payments and unguaranteed residual value |
|  | March 31, 2022 |  |  | December 31, 2021 |  |  | March 31, 2022 |  |  | December 31, 2021 |
Less than one year |  | $ | 21,981 |  |  | $ | 16,420 |  |  | $ | 20,235 |  |  | $ | 15,248 |
Between one and five years |  |  | 94,323 |  |  |  | 64,739 |  |  |  | 70,944 |  |  |  | 49,546 |
Later than five years |  |  | 82,490 |  |  |  | 62,827 |  |  |  | 46,378 |  |  |  | 38,564 |
|  | $ | 198,794 |  |  | $ | 143,986 |  |  | $ | 137,557 |  |  | $ | 103,358 |
Less: Unearned finance income |  |  | (61,237 | ) |  |  | (40,628 | ) |  |  | — |  |  |  | — |
|  | $ | 137,557 |  |  | $ | 103,358 |  |  | $ | 137,557 |  |  | $ | 103,358 |
|  | March 31, 2022 |  |  | December 31, 2021 |
Balance, January 1 |  | $ | 103,358 |  |  | $ | 64,274 |
Additions |  |  | 38,947 |  |  |  | 40,154 |
Interest income |  |  | 2,895 |  |  |  | 5,417 |
Billings and payments |  |  | (5,826 | ) |  |  | (6,597 | )
Currency translation effects |  |  | (1,817 | ) |  |  | 110 |
|  | $ | 137,557 |  |  | $ | 103,358 |
During the three months ended March 31, 2022, the Company recognized $6.6 million of selling profit related to the commencement of finance leases (March 31, 2021 – nil). Additionally, the Company recognized $2.9 million of interest income on the finance lease receivable (March 31, 2021 – $1.1 million). Income related to variable lease payments was nominal during the three months ended March 31, 2022 and 2021. The average interest rates implicit in the leases are fixed at the contract date for the entire lease term. At March 31, 2022 the average interest rate was 7.8 percent per annum (December 31, 2021 – 8.0 percent). The finance lease receivables at the end of reporting period are neither past due nor impaired. | NOTE 11. FINANCE LEASES RECEIVABLE The Company entered into finance lease arrangements for certain of its rental assets. The terms of the leases entered into range from three to 10 years. During the fourth quarter of 2021, the Company entered into an agreement to extend an existing contract. The new arrangement has been determined to be accounted for as a finance lease. Enerflex, as a manufacturer lessor, recognizes selling profit or loss on a finance lease at the commencement date. Revenue from contracts that have been classified as finance leases for newly built equipment is recorded as Engineered Systems revenue. Revenue from contracts that have been classified as finance leases related to existing or pre-owned equipment, is recorded as Energy Infrastructure revenue. Upon commencement of the new lease, the Company recognizes revenue, based on the fair value of the underlying assets, and cost of goods sold, determined to be the net book value of those assets, in the consolidated statements of earnings. The finance lease interest portion will be recognized in the Energy Infrastructure product line over the lease term. In addition, the Company recognizes a finance lease receivable equal to the revenue recognized and derecognized the net book value of the underlying assets from rental equipment. The value of the finance lease receivable is comprised of the following:
|  | Minimum lease payments |  |  | Present value of minimum lease payments |
December 31, |  | 2021 |  |  | 2020 |  |  | 2021 |  |  | 2020 |
Less than one year |  | $ | 16,420 |  |  | $ | 3,047 |  |  | $ | 15,248 |  |  | $ | 2,928 |
Between one and five years |  |  | 64,739 |  |  |  | 42,129 |  |  |  | 49,546 |  |  |  | 34,020 |
Later than five years |  |  | 62,827 |  |  |  | 45,445 |  |  |  | 38,564 |  |  |  | 27,326 |
|  | $ | 143,986 |  |  | $ | 90,621 |  |  | $ | 103,358 |  |  | $ | 64,274 |
Less: unearned finance income |  |  | (40,628 | ) |  |  | (26,347 | ) |  |  | — |  |  |  | — |
|  | $ | 103,358 |  |  | $ | 64,274 |  |  | $ | 103,358 |  |  | $ | 64,274 |
December 31, |  | 2021 |  |  | 2020 |
Balance, January 1 |  | $ | 64,274 |  |  | $ | 900 |
Additions |  |  | 40,154 |  |  |  | 64,270 |
Interest income |  |  | 5,417 |  |  |  | 80 |
Billings and payments |  |  | (6,597 | ) |  |  | (639 | )
Currency translation effects |  |  | 110 |  |  |  | (337 | )
|  | $ | 103,358 |  |  | $ | 64,274 |
During the year ended December 31, 2021, the Company recognized $6.2 million of selling profit related to the commencement of finance leases (December 31, 2020 – $14.7 million; December 31, 2019 – nil). Additionally, during the twelve months ended 2021, the Company recognized $5.4 million of interest income on the finance lease receivable (December 31, 2020 – $0.1 million; December 31, 2019 – $0.1 million). Income related to variable lease payments was nominal during the years ended December 31, 2021, 2020, and 2 0 19. The average interest rates implicit in the leases are fixed at the contract date for the entire lease term. At December 31, 2021 the average interest rate was 8.0 percent per annum (December 31, 2020 – 7.5 percent ). The finance lease receivables at the end of reporting period are neither past due nor impaired.

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