10. Operating Lease Right-of-use Assets and Operating Lease Liability
|9 Months Ended|
Sep. 30, 2019
|Operating Lease Right-of-use Assets and Operating Lease Liability||
Note 10 – Operating Lease Right-of-use Assets and Operating Lease Liability
The Company has one lease agreement and the lease is classified as operating at inception of the lease. The lease results in the recognition of ROU asset and lease liabilities on the balance sheet. ROU asset and operating lease liabilities are recognized based on the present value of lease payments over the lease term as of the commencement date. Because the leases do not provide an explicit or implicit rate of return, the Company determines incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments on an individual lease basis. We estimate our incremental borrowing rate to discount the lease payments based on information available at lease commencement. Lease expense for the lease is recognized on a straight-line basis over the lease term.
The Company’s leases do not contain any residual value guarantees or material restrictive covenants. Leases with a lease term of 12 months or less are not recorded on the balance sheet and lease expense is recognized on a straight-line basis over the lease term. The remaining term as of September 30, 2019 is 35 months ending August of 2022. The Company currently has no finance leases.
During the nine months ended September 30, 2019, cash paid for amounts included in the measurement of lease liabilities- operating cash flows from operating lease was $32,412. As of September 30, 2019, right-of-use (“ROU”) assets amounted to $159,636 with lease liabilities amounted to $170,554.
Right-of-use assets are summarized below:
Amortization on the right -of -use asset is included in rent expense on the statements of operations.
Operating Lease liabilities are summarized below:
Maturity of lease liabilities are as follows:
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.
Reference 1: http://www.xbrl.org/2003/role/disclosureRef