LEASES

12 Months Ended

Sep. 30, 2020

On October 1, 2019, we adopted new accounting guidance related to the accounting for leases. See Note 2 for further information about this guidance and for a discussion of our accounting policies related to leases.

As of September 30, 2020, our lease commitments resulted in ROU assets of $321 million and lease liabilities of $345 million, which were included in “Other assets” and “Other payables,” respectively, on our Consolidated Statements of Financial Condition. The weighted-average remaining lease term and discount-rate for our leases was five years and 3.86%, respectively, as of September 30, 2020.

Lease expense

Lease expense is recognized on a straight-line basis over the lease term if the ROU asset has not been impaired or abandoned.

The following table details the components of lease expense, which is included in “Occupancy and equipment” expense on our Consolidated Statements of Income and Comprehensive Income.


$ in millions	Year ended September 30, 2020
Lease costs	$	98
Variable lease costs	$	26

Variable lease costs in the preceding table includes payments for common area maintenance charges and other variable costs that are not reflected in the measurement of ROU assets and lease liabilities.

Lease liabilities

The maturities of lease liabilities as of September 30, 2020 are presented in the following table.


Fiscal year ended September 30,	$ in millions
2021	97
2022	83
2023	65
2024	48
2025	34
Thereafter	55
Gross lease payments	382
Less: interest	(37)
Present value of lease liabilities	$	345

Lease payments in the preceding table exclude $201 million of legally binding minimum lease payments for leases signed but not yet commenced. These leases are estimated to commence between fiscal year 2021 and 2022 with lease terms ranging from five years to 11 years.

Statement of cash flows supplemental information


$ in millions	Year ended September 30, 2020
Cash outflows - lease liabilities	$	101
Non-cash - ROU assets recorded for new and modified leases	$	74

Minimum future lease commitments (under previous GAAP)

As of the date of adoption, our undiscounted minimum annual rental commitments were materially unchanged from the disclosure in Note 17 of our 2019 Form 10-K, which is included in the following table.


Fiscal year ended September 30,	$ in millions
2020	$	103
2021	95
2022	79
2023	66
2024	49
Thereafter	127
Total	$	519