The Company has an operating lease which is a real estate lease for its headquarters in Fairfax, Virginia. This lease has a fixed lease term of months. The Company determines if an arrangement is a lease at inception. Operating leases are included in right-of-use operating lease assets and operating lease liabilities in the Company's balance sheets as of and As of and the Company does have any sales-type or direct financing leases.

 

The Company's operating lease asset represents its right to use an underlying asset for the lease term and lease liabilities represent its obligation to make lease payments arising from the lease. Operating lease assets and liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. Since the lease does provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The operating lease asset also includes any lease payments made and excludes lease incentives. Lease expense for lease payments is recognized on a straight-line basis over the lease term. The Company's lease agreement includes rental payments escalating annually for inflation at a fixed rate. These payments are included in the initial measurement of the operating lease liability and operating lease asset. The Company does have any rental payments which are based on a change in an index or a rate that can be considered variable lease payments, which would be expensed as incurred.

 

The Company's lease agreement does contain any material residual value guarantees or material restrictions or covenants.

 

The Company does sublease any real estate to parties.

 

The following table provides supplemental balance sheet information related to the Company's operating lease:

 

Balance Sheet		as of				as of
Classification		September 30, 2020				December 31, 2019
Assets:
Right-to-use operating lease asset		$	76,531			$	149,762
Liabilities:
Operating lease liability - current		$	72,458			$	103,955
Operating lease liability - non-current			-				45,595
Total lease liabilities		$	72,458			$	149,550

 

The following table reconciles the undiscounted cash flows to the operating lease liabilities recorded in the Company's balance sheet at

 

		September 30, 2020
Remainder of 2020		$	27,859
2021			46,433
Total lease payments			74,292
Less: discount			(1,834	)
Present value of lease liabilities		$	72,458

 

As of the Company's sole operating lease had a lease term of approximately months. The discount rate of the lease is equal to IAI's incremental borrowing rate at the measurement date of the lease agreement. The weighted average discount rate of the Company's operating lease is approximately For the months ended and the Company incurred of expense related to its operating leases. Rent expense for the months ended and was