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Operating Lease Right-of-Use Asset and Operating Lease Liability
12 Months Ended
Dec. 31, 2019
Lessee Disclosure [Abstract]  
Operating Lease Right-of-Use Asset and Operating Lease Liability [Text Block]

11. Operating Lease Right-of-Use Asset and Operating Lease Liability

 

The Company had one operating lease right-of-use asset and related operating lease liability and had recognized as such, effective January 1, 2019, based on the present value of lease payments over the lease term that expires on March 31, 2034, calculated to be $217,755 ($297,074 CAD). The Company used its estimated secured incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. The operating lease right-of-use asset was being amortized on a straight-line basis over the lease term which expires March 31, 2034 and amortization expense is included under office and administration expense in the consolidated statements of operations and comprehensive loss. The Company does not act as a lessor nor does it have any leases classified as financing leases.

 

The operating lease right-of-use asset was periodically reviewed for impairment losses. The Company used the long-lived assets impairment guidance in ASC Subtopic 360-10, Property, Plant and Equipment-Overall, to determine whether the operating lease right-of-use asset was impaired, and if so, the amount of the impairment loss to recognize.

 

The Company monitored for events or changes in circumstances that required a reassessment of its operating lease right-of-use asset. When a reassessment results in the remeasurement of a lease liability, a corresponding adjustment is made to the carrying amount of the corresponding operating lease right-of-use asset.

 

Effective May 24, 2019, the Company acquired the shares of 1684567, the company that owned the land upon which the right-of-use asset was situated. As a result, the Company is both the tenant and the landlord and as such, no longer recognizes an operating right-of-use asset and related operating lease liability.

 

For the year ended December 31, 2019, the Company recorded $6,118 ($8,117 CAD) (2018-$nil; $nil CAD), for the amortization of the operating lease right-of-use asset.

 

For the year ended December 31, 2019, the Company incurred interest of $2,441 ($3,239 CAD), on the operating lease liability.