Precision recognizes right-of-use assets primarily from its leases of real estate and vehicles and equipment.

	Real Estate			Vehicles and Equipment			Total
Balance, January 1, 2019	$	—		$	—		$	—
Transition adjustments		58,635			14,829			73,464
Additions		—			1,947			1,947
Derecognition		(29	)		—			(29	)
Depreciation		(4,055	)		(4,403	)		(8,458	)
Lease remeasurements		163			—			163
Effect of foreign currency exchange differences		(688	)		(257	)		(945	)
Balance, December 31, 2019	$	54,026		$	12,116		$	66,142
Additions		136			3,031			3,167
Derecognition		—			(2,597	)		(2,597	)
Depreciation		(3,900	)		(3,517	)		(7,417	)
Lease remeasurements		(6,233	)		2,602			(3,631	)
Effect of foreign currency exchange differences		(340	)		(156	)		(496	)
Balance, December 31, 2020	$	43,689		$	11,479		$	55,168

Precision’s real estate lease contracts often contain renewal options which may impact the determination of the lease term for purposes of calculating the lease obligation. If it is reasonably certain that a renewal option will be exercised, the renewal period is included in the lease term. When entering a lease, Precision assesses whether it is reasonably certain renewal options will be exercised. Reasonable certainty is established if all relevant facts and circumstances indicate an economic incentive to exercise the renewal option. For the majority of its real estate leases, Precision is reasonably certain it will exercise its renewal option. Accordingly, the renewal period has been included in the lease term used to calculate the lease obligation.

For the period ended December 31, 2020, Precision had total cash outflows of $9 million (2019 – $10 million) in relation to its lease obligations.

The Corporation has commitments under various lease agreements, primarily for real estate and vehicles and equipment. Terms of Precision’s real estate leases run for a period of one to 10 years while vehicle leases are typically for terms of between three and four years. Expected non-cancellable undiscounted operating lease payments are as follows:

	2020		2019
Less than one year	$	10,960	$	11,954
One to five years		29,630		33,566
More than five years		6,590		11,117
	$	47,180	$	56,637

Precision leases its rig equipment under long-term drilling contracts with terms ranging from one to five years. At December 31, 2020, the net book value of the underlying rig equipment subject to long-term drilling contracts was $477 million (2019 – $1 billion).

The following table sets out a maturity analysis of lease payments, showing the undiscounted lease payments to be received after December 31, 2020.

Precision adopted IFRS 16 on January 1, 2019 using the modified retrospective method of adoption. At the date of initial application, for those leases previously classified as an operating lease under IAS 17, Management elected to recognize and measure the respective right-of-use assets at the amount equal to the lease obligation, adjusted for any prepaid or accrued lease payment immediately before the date of initial application. The opening balance sheet adjustment in relation to these leases was:

At the date of transition, Precision derecognized $3 million of its deferred base rent balance which was established to straight-line amortize escalating corporate office rent expenses over the term of the lease.