9. LEASES

The Company determines if an arrangement is a lease or contains a lease at inception. The Company leases some office equipment under finance leases. We also lease equipment related to our horse racing operations under operating leases. For lease accounting purposes, we do not separate lease and nonlease components, nor do we record operating or finance lease assets and liabilities for short term leases.

As our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date to determine the present value of lease payments. We recognize expense for operating leases on a straight-line basis over the lease term. The Company’s lease agreements do not contain any variable lease payments, material residual value guarantees or any restrictive covenants.

Lease costs related to operating leases were $19,974 and $31,463 for the nine months ended September 30, 2020 and 2019, respectively. The total lease expenses for leases with a term of twelve months or less for which the Company elected not to recognize a lease asset or liability was $256,967 and $434,332 for the nine months ended September 30, 2020 and 2019, respectively.

Lease costs included in depreciation and amortization related to our finance leases were $18,701 and $18,701 for the nine months ended September 30, 2020 and 2019. Interest expense related to our finance leases was immaterial.

The following table shows the classification of the right of use assets on our consolidated balance sheets:


		Nine Months Ended September 30,
	Balance Sheet Location	2020		2019
Assets
Finance	Land, buildings and equipment, net (1)	$	78,024	$	$ 104,184
Operating	Operating lease right-of-use assets		47,119		76,816
Total Leased Assets		$	125,143	$	$ 181,000

1 – Finance lease assets are net of accumulated amortization of $50,208 and $18,701 as of September 30, 2020 and 2019, respectively.

The following table shows the lease terms and discount rates related to our leases:


	Nine Months Ended September 30,
	2020	2019
Weighted average remaining lease term (in years):
Finance	2.9	4.0
Operating	0.8	1.3
Weighted average discount rate (%):
Finance	5.0%	5.0%
Operating	5.5%	5.4%

The maturity of operating leases and finance leases as of September 30, 2020 are as follows:


Nine Months Ended September 30, 2020	Operating leases		Finance leases
2020 remaining	$	2,079	$	7,185
2021		23,100		28,743
2022		23,100		28,743
2023		—		19,332
Total minimum lease obligations		48,279		84,003
Less: amounts representing interest		(1,160)		(5,979)
Present value of minimum lease payments		47,119		78,024
Less: current portion		(24,333)		(25,431)
Lease obligations, net of current portion	$	22,786	$	52,593