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Leases | 12 Months Ended
--- | ---
Dec. 31, 2023
Leases |
Leases | 23) Leases A lease is defined as a contract, or part of a contract, that conveys the right to control the use of identified property, plant, or equipment (an identified asset) for a period in exchange for consideration. The Company determines if a contract is a lease at the inception of the contract. At the commencement date of a lease, the Company measures the lease liability at the present value of the lease payments over the lease term, discounted using the discount rate for the lease. The Company uses the rate implicit in the lease, if available, otherwise the Company uses its incremental borrowing rate. Also, at the commencement date of a lease, the Company measures the cost of the related right-of-use asset which consists of the amount of the initial measurement of the lease liability, any lease payments made to the lessor at or before the commencement date, minus any lease incentives received and any initial direct costs incurred by the Company. Information about the Nature of Leases and Subleases The Company leases office space and equipment from third parties under various non-cancelable agreements. The Company has operating leases for office space for its segments in areas where it conducts business. The Company subleases some of this office space. The Company also has finance leases for certain equipment, such as copy machines and postage machines. The Company does not have any lease agreements with variable lease payments. The Company has not included any options to extend or terminate leases in the recognition of the right-of-use assets or lease liabilities because of the uncertainty that they will be exercised. No residual value guarantees have been provided to the Company. The Company does not have any restrictions or covenants imposed by leases. Leases that have not Commenced The Company does not have any leases that have not commenced that create significant rights or obligations for the Company. Related Party Lease Transactions The Company does not have any related party lease transactions that require disclosure as of December 31, 2023. SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES Notes to Consolidated Financial Statements Years Ended December 31, 2023 and 2022 23) Leases (Continued) Short-term Leases The Company made an accounting policy election not to apply the recognition requirements of ASC 842 to short-term leases, which are leases that, at the commencement date, have a lease term of 12 months or less and do not include an option to purchase the underlying assets that the lessee is reasonably certain to exercise. Significant Judgments and Assumptions The Company does not use any significant judgments or assumptions regarding the determination of whether a contract contains a lease; the allocation of the consideration in a contract between lease and nonlease components; or the determination of the discount rates for the leases. The following table presents the Company’s total lease cost recognized in earnings, amounts capitalized as right-of-use assets and cash flows from lease transactions. Schedule of Lease Cost Recognized in Earnings
|  | 2023 |  |  | 2022 |
|  | Years Ended December 31 |
|  | 2023 |  |  | 2022 |
Lease Cost |  |  |  |  |  |  |  |
Finance lease cost: |  |  |  |  |  |  |  |
Amortization of right-of-use assets (1) |  | $ | 25,573 |  |  | $ | 30,163 |
Interest on lease liabilities (2) |  |  | 1,713 |  |  |  | 2,773 |
Operating lease cost (3) |  |  | 3,914,954 |  |  |  | 4,498,894 |
Short-term lease cost (3)(4) |  |  | 1,874,556 |  |  |  | 1,135,003 |
Sublease income (3) |  |  | (323,272 | ) |  |  | (209,455 | )
Total lease cost |  | $ | 5,493,524 |  |  | $ | 5,457,378 |
Other Information |  |  |  |  |  |  |  |
Cash paid for amounts included in the measurement of lease liabilities: |  |  |  |  |  |  |  |
Operating cash flows from operating leases |  | $ | 4,007,919 |  |  | $ | 4,250,630 |
Operating cash flows from finance leases |  |  | 1,713 |  |  |  | 2,773 |
Financing cash flows from finance leases |  |  | 27,868 |  |  |  | 31,685 |
Right-of-use assets obtained in exchange for lease liabilities: |  |  |  |  |  |  |  |
Operating leases |  | $ | 160,348 |  |  | $ | 2,054,534 |
Finance leases |  |  | 12,332 |  |  |  | - |
Weighted-average remaining lease term (in years) |  |  |  |  |  |  |  |
Finance leases |  |  | 3.29 |  |  |  | 1.25 |
Operating leases |  |  | 2.88 |  |  |  | 3.46 |
Weighted-average discount rate |  |  |  |  |  |  |  |
Finance leases |  |  | 6.81 | % |  |  | 5.78 | %
Operating leases |  |  | 4.54 | % |  |  | 4.50 | %
(1) |  | Included in Depreciation on property and equipment on the consolidated statements of earnings
(2) |  | Included in Interest expense on the consolidated statements of earnings
(3) |  | Included in Rent and rent related expenses on the consolidated statements of earnings
(4) |  | Includes leases with a term of 12 months or less
SECURITY NATIONAL FINANCIAL CORPORATION AND SUBSIDIARIES Notes to Consolidated Financial Statements Years Ended December 31, 2023 and 2022 23) Leases (Continued) The following table presents the maturity analysis of the Company’s lease liabilities. Schedule of Future Minimum Rental Payments for Finance Leases and Operating Leases
|  | Finance Leases |  |  | Operating Leases |
Lease payments due in: |  |  |  |  |  |  |  |
2024 |  | $ | 7,187 |  |  | $ | 3,187,826 |
2025 |  |  | 3,525 |  |  |  | 2,073,045 |
2026 |  |  | 2,833 |  |  |  | 1,443,598 |
2027 |  |  | 2,833 |  |  |  | 340,112 |
2028 |  |  | 1,181 |  |  |  | 128,854 |
Thereafter |  |  | - |  |  |  | 195,695 |
Total undiscounted lease payments |  |  | 17,559 |  |  |  | 7,369,130 |
Less: Discount on cash flows |  |  | (2,009 | ) |  |  | (480,588 | )
Present value of lease liabilities |  | $ | 15,550 |  |  | $ | 6,888,542 |
The following table presents the Company’s right-of-use assets and lease liabilities. Schedule of Right-of-Use Assets and Lease Liabilities
|  |  |  | Year Ended December 31, |
|  | Balance Sheet Location |  | 2023 |  |  | 2022 |
Operating Leases |  |  |  |  |  |  |  |  |  |
Right-of-use assets |  | Other assets |  | $ | 6,374,336 |  |  | $ | 9,987,699 |
Right-of-use assets |  | Other assets |  | $ | 6,374,336 |  |  | $ | 9,987,699 |
Lease liabilities |  | Other liabilities and accrued expenses |  | $ | 6,888,542 |  |  | $ | 10,596,471 |
Lease liabilities |  | Other liabilities and accrued expenses |  | $ | 6,888,542 |  |  | $ | 10,596,471 |
Finance Leases |  |  |  |  |  |  |  |  |  |
Right-of-use assets |  |  |  | $ | 130,367 |  |  | $ | 228,221 |
Accumulated amortization |  |  |  |  | (115,565 | ) |  |  | (200,178 | )
Right-of-use assets, net |  | Property and equipment, net |  | $ | 14,802 |  |  | $ | 28,043 |
Right-of-use assets, net |  | Property and equipment, net |  | $ | 14,802 |  |  | $ | 28,043 |
Lease liabilities |  | Bank and other loans payable |  | $ | 15,550 |  |  | $ | 31,082 |
Lease liabilities |  | Bank and other loans payable |  | $ | 15,551 |  |  | $ | 31,082 |
The Company is also a lessor and has operating lease agreements with various tenants that lease its commercial properties. See Note 2 for information about the Company’s real estate held for investment.

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- Definition The entire disclosure for operating leases of lessee. Includes, but is not limited to, description of operating lease and maturity analysis of operating lease liability. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 842 -SubTopic 20 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//842-20/tableOfContent + Details
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