Leases

12 Months Ended

Mar. 31, 2020

Leases [Abstract]

Leases

6. Leases

We adopted Topic 842 on April 1, 2019 using the current period adjustment method of adoption to recognize leases with a duration greater than 12 months on the balance sheet. The impact of adoption on April 1, 2019 was recognition of operating lease liabilities of $16.3 million and related Right-of-Use (“ROU”) assets of $13.8 million. Prior period financial statements have not been restated and therefore the comparative amounts are not presented below or on the Consolidated Balance Sheets as of March 31, 2019. For operating leases with a term greater than 12 months, we have recorded the lease liability at the present value of lease payments over the remaining lease term and the related ROU asset. The remaining lease term has been determined for each lease considering factors such as renewal options, termination options, our Company’s historical practices in exercising such options, and current business knowledge which may impact lease related decisions. The majority of our leases are comprised of real estate leases for our respective offices around the globe. Our finance leases consist of office equipment. We have no residual value guarantees or restrictions or covenants imposed by, or associated with our active leases. Since our current leases do not provide an implicit rate of return, our incremental borrowing rates used to determine the value of lease payments in implementation are estimated as of April 1, 2019, based on collateralized rates for a term similar to each remaining lease term.

We have elected the package of practical expedients permitted under the transition guidance which includes the ability to carryforward the previously determined lease classification (operating or finance), forgo the assessment whether active contracts contain a lease, and whether capitalized costs associated with a lease meet the definition of “initial direct costs” as defined within Topic 842. In the event that any of our leases contain nonlease components, we have elected the practical expedient to account for each separate lease component and the associated nonlease component(s) as a single lease component. We have also elected the accounting policy to forgo applying the guidance of Topic 842 to short term leases (defined as a term of 12 months or less, without a purchase option which we are reasonably certain to exercise).

As of March 31, 2020, we do not have any leases which have not yet commenced. We do not have any related party leases or sublease arrangements. We have variable payments for expenses such as common area maintenance and taxes. We do not have variable payments that are based on an index or rate. As a result, we do not include variable payments in the calculation of the lease liability. Any variable costs are expensed as incurred.

The components of lease expenses for the fiscal 2020 period were as follows:

		Year Ended
(in thousands)	March 31, 2020
Operating leases expense		$	4,193
Finance lease expense:
Amortization of ROU assets			23
Interest on lease liabilities			6
Total finance lease expense			29
Variable lease costs			271
Short term lease expense			88
Total lease expense		$	4,581

Other information related to leases for fiscal 2020 was as follows:

	Year Ended
Supplemental cash flow information	March 31, 2020
Cash paid for amounts included in the measurement of lease liabilities    (in thousands):
Operating cash flows for operating leases	$	4,873
Operating cash flows for finance leases		8
Financing cash flows for finance leases		24
ROU assets obtained in exchange for lease obligations (in thousands):
Operating leases	$	2,734
Finance leases		17
Weighted average remaining lease terms
Operating leases		5.04
Finance leases		2.16
Weighted average discount rates
Operating leases		10.37	%
Finance leases		4.38	%

The table below reconciles the undiscounted future minimum lease payments (displayed by year and in the aggregate) under non-cancelable leases with terms of more than one year to the total lease liabilities recognized on the Consolidated Balance Sheet as of March 31, 2020:

Year ending (in thousands)	Operating leases			Finance leases
2021	$	4,927		$	29
2022		4,207			21
2023		2,855			5
2024		2,685			2
2025		2,083			—
Thereafter		3,901			—
Total undiscounted future minimum lease payments		20,658			57
Less: difference between undiscounted lease payments and discounted lease    liabilities		(5,322	)		(8	)
Total lease liabilities	$	15,336		$	49

As previously disclosed on our March 31, 2019 Form 10-K and under the previous lease accounting standard, future minimum lease payments under non-cancelable leases as of March 31, 2019 were as follows:

Year ending (in thousands)	Operating leases		Finance leases
2020	$	4,143	$	27
2021		3,945		23
2022		3,166		15
2023		1,916		—
2024		1,770		—
Thereafter		4,497		—
Total lease payments		19,437		65
Less: Amounts representing interest		—		(8	)
Present value of lease liabilities	$	19,437	$	57

Leases

6. Leases

We adopted Topic 842 on April 1, 2019 using the current period adjustment method of adoption to recognize leases with a duration greater than 12 months on the balance sheet. The impact of adoption on April 1, 2019 was recognition of operating lease liabilities of $16.3 million and related Right-of-Use (“ROU”) assets of $13.8 million. Prior period financial statements have not been restated and therefore the comparative amounts are not presented below or on the Consolidated Balance Sheets as of March 31, 2019. For operating leases with a term greater than 12 months, we have recorded the lease liability at the present value of lease payments over the remaining lease term and the related ROU asset. The remaining lease term has been determined for each lease considering factors such as renewal options, termination options, our Company’s historical practices in exercising such options, and current business knowledge which may impact lease related decisions. The majority of our leases are comprised of real estate leases for our respective offices around the globe. Our finance leases consist of office equipment. We have no residual value guarantees or restrictions or covenants imposed by, or associated with our active leases. Since our current leases do not provide an implicit rate of return, our incremental borrowing rates used to determine the value of lease payments in implementation are estimated as of April 1, 2019, based on collateralized rates for a term similar to each remaining lease term.

We have elected the package of practical expedients permitted under the transition guidance which includes the ability to carryforward the previously determined lease classification (operating or finance), forgo the assessment whether active contracts contain a lease, and whether capitalized costs associated with a lease meet the definition of “initial direct costs” as defined within Topic 842. In the event that any of our leases contain nonlease components, we have elected the practical expedient to account for each separate lease component and the associated nonlease component(s) as a single lease component. We have also elected the accounting policy to forgo applying the guidance of Topic 842 to short term leases (defined as a term of 12 months or less, without a purchase option which we are reasonably certain to exercise).

As of March 31, 2020, we do not have any leases which have not yet commenced. We do not have any related party leases or sublease arrangements. We have variable payments for expenses such as common area maintenance and taxes. We do not have variable payments that are based on an index or rate. As a result, we do not include variable payments in the calculation of the lease liability. Any variable costs are expensed as incurred.

The components of lease expenses for the fiscal 2020 period were as follows:

		Year Ended
(in thousands)	March 31, 2020
Operating leases expense		$	4,193
Finance lease expense:
Amortization of ROU assets			23
Interest on lease liabilities			6
Total finance lease expense			29
Variable lease costs			271
Short term lease expense			88
Total lease expense		$	4,581

Other information related to leases for fiscal 2020 was as follows:

	Year Ended
Supplemental cash flow information	March 31, 2020
Cash paid for amounts included in the measurement of lease liabilities    (in thousands):
Operating cash flows for operating leases	$	4,873
Operating cash flows for finance leases		8
Financing cash flows for finance leases		24
ROU assets obtained in exchange for lease obligations (in thousands):
Operating leases	$	2,734
Finance leases		17
Weighted average remaining lease terms
Operating leases		5.04
Finance leases		2.16
Weighted average discount rates
Operating leases		10.37	%
Finance leases		4.38	%

The table below reconciles the undiscounted future minimum lease payments (displayed by year and in the aggregate) under non-cancelable leases with terms of more than one year to the total lease liabilities recognized on the Consolidated Balance Sheet as of March 31, 2020:

Year ending (in thousands)	Operating leases			Finance leases
2021	$	4,927		$	29
2022		4,207			21
2023		2,855			5
2024		2,685			2
2025		2,083			—
Thereafter		3,901			—
Total undiscounted future minimum lease payments		20,658			57
Less: difference between undiscounted lease payments and discounted lease    liabilities		(5,322	)		(8	)
Total lease liabilities	$	15,336		$	49

As previously disclosed on our March 31, 2019 Form 10-K and under the previous lease accounting standard, future minimum lease payments under non-cancelable leases as of March 31, 2019 were as follows:

Year ending (in thousands)	Operating leases		Finance leases
2020	$	4,143	$	27
2021		3,945		23
2022		3,166		15
2023		1,916		—
2024		1,770		—
Thereafter		4,497		—
Total lease payments		19,437		65
Less: Amounts representing interest		—		(8	)
Present value of lease liabilities	$	19,437	$	57