The ABC Companies, Inc. adopted the new lease standard in the fiscal year ending in February 2020.
a. What is the operating lease liability as of February 1, 2020? Verify the present value calculation in the footnote and the amount on the balance sheet match.
b. What is the amount of operating lease assets as of February 1, 2020? Why aren't the asset and liability equal?
Additional information related to our operating leases is as follows (in thousands, except weighted-average data):
Fiscal Year 2019:
- Operating cash outflows included in the measurement of lease liabilities: $430,871
- Operating lease assets obtained in exchange for new operating lease liabilities: $296,289
- Weighted-average remaining lease term: 6.0 years
- Weighted-average discount rate: 5.9%
Maturities of our lease liabilities are as follows as of February 1, 2020 (in thousands):
Fiscal Year 2020: $395,672
Fiscal Year 2021: $388,112
Fiscal Year 2022: $326,224
Fiscal Year 2023: $263,431
Fiscal Year 2024: $202,604
Thereafter: $427,752
Total lease payments: $2,003,795
Less: Interest: $339,178
Present value of lease liabilities: $1,664,617
Lease payments exclude $71.1 million related to 21 leases that have been signed as of February 1, 2020 but have not yet commenced.
Rent Commitments Under Previous Lease Accounting Standard:
Future minimum annual rental commitments for all non-cancelable operating leases as of February 2, 2019 are as follows (in thousands):
Fiscal Year 2019: $428,698
Fiscal Year 2020: $386,466
Fiscal Year 2021: $331,032
Fiscal Year 2022: $268,667
Fiscal Year 2023: $206,424
Thereafter: $508,178
Total minimum rental commitments: $2,129,465
Rent expense applicable to non-cancelable operating leases was $423.8 million and $425.5 million in fiscal 2018 and fiscal 2017, respectively.
