|3 Months Ended|
Mar. 31, 2022
The Company determines if any arrangements contain a lease at its inception. The Company assesses whether or not the Company has control over the identified asset for a period of time during the contract period. Operating leases are included in non-current assets, current liabilities, and non-current liabilities in our consolidated balance sheet if the lease term is greater than 12 months. Finance leases are included in property and equipment, current liabilities, and non-current liabilities.
ROU assets represent the right to use underlying asset during the lease term and the lease liabilities represent the obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized on the commencement date of the lease based on the present value of the lease payments over the lease term. The operating lease ROU assets also include any prepaid lease payments, initial direct costs, deferred rent and lease incentives. The Company uses the incremental borrowing rate on based information available at the commencement date of the lease payments. The Company includes payments for any renewal or cancellable options that are reasonably certain that the Company will exercise.
Operating lease costs for lease payments are recognized on a straight-line basis over the lease term. The Company has one operating lease for its office lease in Canada and no finance leases.
The Company has elected to not record ROU assets and lease obligations for short-term leases with a term less than 12 months and recognizes the short-term leases as a lease expense to the profit or loss.
The components of lease expenses were as follows:
SCHEDULE OF LEASE EXPENSES
We have an operating lease for an office with a remaining lease term of 8 years. The discount rate was 7.0%.
The entire disclosure for operating leases of lessee. Includes, but is not limited to, description of operating lease and maturity analysis of operating lease liability.
Reference 1: http://www.xbrl.org/2003/role/disclosureRef