Note 3 - Recently-Adopted Accounting Pronouncements
|6 Months Ended|
Jun. 30, 2019
|Notes to Financial Statements|
|New Accounting Pronouncements and Changes in Accounting Principles [Text Block]||
February 2016,the Financial Accounting Standards Board issued ASU
“Leases: Topicthat requires lessees to recognize assets and liabilities on the balance sheet for most leases including operating leases, and followed it up with ASUs
842”), which clarified certain aspects of the new leases standard and provided an optional transition method.
We adopted Topic
January 1, 2019,and elected the optional transition method to initially apply the standard at the
January 1, 2019,adoption date. As a result, we applied the new lease standard prospectively to our leases existing or commencing on or after
January 1, 2019.Comparative periods presented were
notrestated upon adoption. Similarly, new disclosures under the standard were made for periods beginning
January 1, 2019,and
notfor prior comparative periods. Prior periods will continue to be reported under guidance in effect prior to
January 1, 2019.In addition, we elected the package of practical expedients permitted under the transition guidance within the standard, which among other things, allowed us to
notreassess contracts to determine if they contain leases, lease classification and initial direct costs. The standard did
notimpact our statements of operations and had
noimpact on our cash flows.
We have an operating lease which is a real estate lease for our headquarters in Fairfax, Virginia. This lease has a fixed lease term of
49months. We determine if an arrangement is a lease at inception. Operating leases are included in right-of-use operating lease assets, other current liabilities, and operating lease liabilities in our balance sheets as of
June 30, 2019.As of
June 30, 2019,we do
nothave any sales-type or direct financing leases.
Our operating lease assets represent our right to use an underlying asset for the lease term and lease liabilities represent our 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 our leases do
notprovide an implicit rate, we use our 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. Our 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. We do
nothave 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.
We have lease agreements which
maycontain lease and non-lease components, which are accounted for as a single performance obligation to the extent that the timing and pattern of transfer are similar for the lease and non-lease components and the lease component qualifies as an operating lease. We do
notrecognize lease liabilities and operating lease assets for leases with a term of
12months or less. We recognize these lease payments on a straight-line basis over the lease term.
Upon adoption of Topic
January 1, 2019,the Company recorded a Right-to-use operating lease asset of
$244,877and a lease liability of
Our lease agreements do
notcontain any material residual value guarantees or material restrictions or covenants.
notsublease any real estate to
The following table provides supplemental balance sheet information related to IAI's operating leases:
The following table reconciles the undiscounted cash flows to the operating lease liabilities recorded in our balance sheet.
June 30, 2019,our operating lease had a weighted average lease term of approximately
2.0years. The discount rate of our lease is equal to our incremental borrowing rate at the measurement date of the lease agreement. The weighted average discount rate of our operating lease is approximately
June 30, 2019,we incurred
$52,244of expense related to our operating leases. Rent expense for the
June 30, 2018was
June 30, 2019,there were
noshort-term leases with a term less than
The entire disclosure of changes in accounting principles, including adoption of new accounting pronouncements, that describes the new methods, amount and effects on financial statement line items.
Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef