XML 27 R16.htm IDEA: XBRL DOCUMENT

Leases

6 Months Ended

Jun. 30, 2019

NOTE 10.

LEASES

The Company determines if an arrangement contains a lease at inception. ROU assets represent the right to use an underlying asset for the lease term and lease liabilities represent the obligation to make lease payments arising from the lease. ROU assets and liabilities are recognized at the lease commencement date based on the estimated present value of lease payments over the lease term.

The Company’s leases consist of leaseholds on office and call center space. The Company utilized a portfolio approach in determining the discount rate. The portfolio approach takes into consideration the range of the term, the range of the lease payments, the category of the underlying asset and the Company’s estimated incremental borrowing rate, which is derived from information available at the lease commencement date, in determining the present value of lease payments. The Company also considered its recent debt issuances as well as publicly available data for instruments with similar characteristics when calculating the incremental borrowing rates.

The lease term includes options to extend the lease when it is reasonably certain that the Company will exercise that option. These operating leases contain renewal options for periods ranging from three to five years that expire at various dates with no residual value guarantees. Future obligations relating to the exercise of renewal options is included in the measurement if, based on the judgment of management, the renewal option is reasonably certain to be exercised. Factors in determining whether an option is reasonably certain of exercise include, but are not limited to, the value of leasehold improvements, the value of the renewal rate compared to market rates, and the presence of factors that would cause a significant economic penalty to the Company if the option is not exercised. Management reasonably plans to exercise all options, and as such, all renewal options are included in the measurement of the right-of-use assets and operating lease liabilities.

Leases with a term of 12 months or less are not recorded on the balance sheet, per the election of the practical expedient noted above.

The Company recognizes lease expense for these leases on a straight-line basis over the lease term. The Company recognizes variable lease payments in the period in which the obligation for those payments is incurred. Variable lease payments that depend on an index or a rate are initially measured using the index or rate at the commencement date, otherwise variable lease payments are recognized in the period incurred.

The components of lease expense were as follows:

	Six Months Ended June 30, 2019

Operating leases		22,040
Interest on lease liabilities		2,642
Total net lease cost		22,682

Supplemental balance sheet information related to leases was as follows:

	June 30, 2019
Operating leases:
Operating lease ROU assets	$	213,414

Current operating lease liabilities, included in current liabilities	$	33,080
Noncurrent operating lease liabilities, included in long-term liabilities		180,334
Total operating lease liabilities	$	213,414

Supplemental cash flow and other information related to leases was as follows:

	Six Months Ended June 30, 2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	17,398
ROU assets obtained in exchange for lease liabilities:
Operating leases	$	230,812

Weighted average remaining lease term (in years):
Operating leases	2.3
Weighted average discount rate:
Operating leases	5	%

Total future minimum payments required under the lease obligations as of June 30, 2019 are as follows:

Twelve Months Ending December 31,
2019 (thereafter)	$	33,080
2020		80,160
2021		80,160
2022		20,014
Total lease payments	$	213,414
Less: amounts representing interest		(14,027	)
Total lease obligations	$	199,387