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Leases
 6 Months Ended
Dec. 31, 2020
Leases [Abstract]  
Leases LeasesThe Company’s lease liabilities are recognized based on the present value of the remaining fixed lease payments, over the lease term, using a discount rate of similarly secured borrowings available to the Company. For the purpose of lease liability
measurement, the Company considers only payments that are fixed and determinable at the time of commencement. Any variable payments that depend on an index or rate are expensed as incurred. The Company accounts for non-lease components, such as common area maintenance, as a component of the lease, and includes it in the initial measurement of leased assets and corresponding liabilities. The Company’s lease terms and conditions may include options to extend or terminate. An option is recognized when it is reasonably certain that II-VI will exercise that option.
The Company’s lease assets also include any lease payments made and exclude any lease incentives received prior to commencement. Leased assets are tested for impairment in the same manner as long-lived assets used in operations.
The following table presents lease costs, which include short-term leases, lease term, and discount rates ($000):
Three Months Ended December 31, 2020Six Months Ended
December 31, 2020
Finance Lease Cost
Amortization of right-of-use assets$417 $833 
Interest on lease liabilities319 642 
Total finance lease cost$736 $1,475 
Operating lease cost9,547 18,600 
Sublease income368 735 
Total lease cost$9,915 $19,340 
Cash Paid for Amounts Included in the Measurement of Lease Liabilities
Operating cash flows from finance leases$319 $642 
Operating cash flows from operating leases9,229 17,692 
Financing cash flows from finance leases278 551 
Weighted-Average Remaining Lease Term (in Years)
Finance leases11.0
Operating leases7.2
Weighted-Average Discount Rate
Finance leases5.6 %
Operating leases6.7 %
Leases LeasesThe Company’s lease liabilities are recognized based on the present value of the remaining fixed lease payments, over the lease term, using a discount rate of similarly secured borrowings available to the Company. For the purpose of lease liability
measurement, the Company considers only payments that are fixed and determinable at the time of commencement. Any variable payments that depend on an index or rate are expensed as incurred. The Company accounts for non-lease components, such as common area maintenance, as a component of the lease, and includes it in the initial measurement of leased assets and corresponding liabilities. The Company’s lease terms and conditions may include options to extend or terminate. An option is recognized when it is reasonably certain that II-VI will exercise that option.
The Company’s lease assets also include any lease payments made and exclude any lease incentives received prior to commencement. Leased assets are tested for impairment in the same manner as long-lived assets used in operations.
The following table presents lease costs, which include short-term leases, lease term, and discount rates ($000):
Three Months Ended December 31, 2020Six Months Ended
December 31, 2020
Finance Lease Cost
Amortization of right-of-use assets$417 $833 
Interest on lease liabilities319 642 
Total finance lease cost$736 $1,475 
Operating lease cost9,547 18,600 
Sublease income368 735 
Total lease cost$9,915 $19,340 
Cash Paid for Amounts Included in the Measurement of Lease Liabilities
Operating cash flows from finance leases$319 $642 
Operating cash flows from operating leases9,229 17,692 
Financing cash flows from finance leases278 551 
Weighted-Average Remaining Lease Term (in Years)
Finance leases11.0
Operating leases7.2
Weighted-Average Discount Rate
Finance leases5.6 %
Operating leases6.7 %