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Leases
 6 Months Ended
Dec. 31, 2021
Leases [Abstract]  
Leases Leases
The 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, 2021Six Months Ended December 31, 2021
Finance Lease Cost
Amortization of right-of-use assets$418 $838 
Interest on lease liabilities302 609 
Total finance lease cost$720 $1,447 
Operating lease cost9,176 18,395 
Sublease income143 507 
Total lease cost$9,753 $19,335 
Cash Paid for Amounts Included in the Measurement of Lease Liabilities
Operating cash flows from finance leases$302 $609 
Operating cash flows from operating leases8,850 17,665 
Financing cash flows from finance leases312 622 
Weighted-Average Remaining Lease Term (in Years)
Finance leases10.0
Operating leases6.9
Weighted-Average Discount Rate
Finance leases5.6 %
Operating leases5.9 %
Leases Leases
The 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, 2021Six Months Ended December 31, 2021
Finance Lease Cost
Amortization of right-of-use assets$418 $838 
Interest on lease liabilities302 609 
Total finance lease cost$720 $1,447 
Operating lease cost9,176 18,395 
Sublease income143 507 
Total lease cost$9,753 $19,335 
Cash Paid for Amounts Included in the Measurement of Lease Liabilities
Operating cash flows from finance leases$302 $609 
Operating cash flows from operating leases8,850 17,665 
Financing cash flows from finance leases312 622 
Weighted-Average Remaining Lease Term (in Years)
Finance leases10.0
Operating leases6.9
Weighted-Average Discount Rate
Finance leases5.6 %
Operating leases5.9 %