5. Equipment under operating leases, net:

The Company’s equipment under operating leases consists of the following (in thousands):


	Balance				Depreciation/		Balance
	December 31,				Amortization		September 30,
	2018		Additions		Expense		2019
Equipment under operating leases, net	$	10,001	$	1,513	$	(973)	$	10,541
Initial direct costs, net of accumulated amortization of $165 thousand at September 30, 2019 and $148 thousand at December 31, 2018		185		5		(46)		144
Total	$	10,186	$	1,518	$	(1,019)	$	10,685

Additions to net investment in operating lease assets are stated at cost. All of the Company’s leased property was acquired beginning in March 2016 through August 2019.

Impairment of equipment under operating leases:

Recorded values of the Company’s leased asset portfolio are reviewed each quarter to confirm the reasonableness of established residual values and to determine whether there is indication that an asset impairment might have taken place. The Company uses a variety of sources and considers many factors in evaluating whether the respective book values of its assets are appropriate. In addition, the Company may direct a residual value review at any time if it becomes aware of issues regarding the ability of a lessee to continue to make payments on its lease contract. An impairment loss is measured and recognized only if the estimated undiscounted future cash flows of the asset are less than their net book value. The estimated undiscounted future cash flows are the sum of the residual value of the asset at the end of the asset’s lease contract and undiscounted future rents from the existing lease contract, if any. The residual value assumes, among other things, that the asset is utilized normally in an open, unrestricted and stable market. Short-term fluctuations in the marketplace are disregarded and it is assumed that there is no necessity either to dispose of a significant number of the assets, if held in quantity, simultaneously or to dispose of the asset quickly. Impairment is measured as the difference between the fair value (as determined by a valuation method using discounted estimated future cash flows, third party appraisals or comparable sales of similar assets as applicable based on asset type) of the asset and its carrying value on the measurement date. Upward adjustments for impairments recognized in prior periods are not made in any circumstances. As a result of these reviews, management determined that no impairment losses existed during the three and nine months ended September 30, 2019 and 2018.

The Company utilizes a straight-line depreciation method for equipment in all of the categories currently in its portfolio of operating lease transactions. Depreciation expense on the Company’s equipment totaled $338 thousand and $304 thousand for the respective three months ended September 30, 2019 and 2018. For the nine months September 30, 2019 and 2018, depreciation expense totaled $973 thousand and $912 thousand, respectively.

IDC amortization expense related to the Company’s operating leases totaled $45 thousand and $17 thousand for the respective three months ended September 30, 2019 and 2018. For the nine month periods ended September 30, 2019 and 2018, IDC amortization expense totaled $46 thousand and $49 thousand, respectively.

Operating leases:

Property on operating leases consists of the following (in thousands):


	Balance						Balance
	December 31,				Reclassifications		September 30,
	2018		Additions		or Dispositions		2019
Transportation, rail	$	3,679	$	—	$	—	$	3,679
Mining		1,728		1,022		—		2,750
Construction		1,242		242		—		1,484
Paper processing		1,058		—		—		1,058
Marine vessels		1,041		—		—		1,041
Containers		860		—		—		860
Agriculture		742		—		—		742
Materials handling		711		249		—		960
Aviation		1,306		—		—		1,306
Transportation, other		97		—		—		97
		12,464		1,513		—		13,977
Less accumulated depreciation		(2,463)		(973)		—		(3,436)
Total	$	10,001	$	540	$	—	$	10,541

The average estimated residual value for assets on operating leases was 38% of the assets’ original cost at both September 30, 2019 and December 31, 2018.

At September 30, 2019, the aggregate amounts of future minimum lease payments receivable are as follows (in thousands):


	Operating
	Leases
Three months ending December 31, 2019	$	510
Year ending December 31, 2020		1,862
2021		1,365
2022		1,146
2023		1,091
2024		724
Thereafter		527
	$	7,225

The useful lives for each category of leases is reviewed at a minimum of once per quarter. As of September 30, 2019, the respective useful lives of each category of lease assets in the Company’s portfolio are as follows (in years):


Equipment category		Useful Life
Transportation, rail		35 - 50
Marine vessel		20 - 30
Containers		15 - 20
Aviation		15 - 20
Mining		10 - 15
Paper processing		10 - 15
Agriculture		7 - 10
Construction		7 - 10
Materials handling		7 - 10
Transportation		7 - 10