XML 18 R9.htm IDEA: XBRL DOCUMENT

LEASES

9 Months Ended

Sep. 30, 2022

3. LEASES

LEASES

Accounting and reporting guidance for leases requires that leases be evaluated and classified as either operating or finance leases by the lessee and as either operating, sales-type or direct financing leases by the lessor. For leases with terms greater than 12 months, the Company records the related right-of-use (“ROU”) asset and lease obligation at the present value of lease payments over the term. Leases may include fixed rental escalation clauses, renewal options and / or termination options that are factored into the determination of lease payments when appropriate. The Company’s operating leases are included in ROU assets, lease liabilities-current portion and lease liability-less current portion in the accompanying consolidated balance sheets. ROU assets represent the Company’s right to use an underlying asset for the lease term, and lease liabilities represent the obligation to make lease payments arising from the lease. The Company’s leases do not usually provide a readily determinable implicit rate; therefore, an estimate of the Company’s incremental borrowing rate is used to discount the lease payments based on information available at the lease commencement date. The discount rate used was 5.5%.

The table below summarizes the right-of-use asset and lease liability for the nine months ended September 30, 2022 and the year ended December 31, 2021:

	September 30, 2022			December 31, 2021
Right of Use Assets
Balance, January 1	$	217,267		$	483,113
Right of use assets, beginning balance		217,267			483,113
Depreciation		(37,748	)		(265,846	)
Balance, end of period	$	179,519		$	217,267
Right of use assets, ending balance	$	179,519		$	217,267
Lease Liability
Balance, January 1	$	217,267		$	483,113
Lease liability, beginning balance	$	217,267		$	483,113
Lease interest expense		6,687			22,057
Payments		(44,435	)		(287,903	)
Balance, end of period	$	179,519		$	217,267
Lease liability, ending balance		179,519			217,267

Short-term portion	$	57,735		$	77,715
Long-term portion		121,784			139,552
Total	$	179,519		$	217,267
Lease liability, ending balance		179,519			217,267

Undiscounted rent payments for the next four years are as follows:

SCHEDULE OF UNDISCOUNTED RENT PAYMENTS


2022		14,175
2023		58,080
2024		59,520
2025		61,020
Total	$	192,795
Impact of discounting		(13,276	)
Lease liability, September 30, 2022	$	179,519