11.

Leases

The Company is a lessee under certain operating leases for office space and equipment.

ASC

842

requires lessees to recognize leases on the balance sheet as a lease liability with a corresponding right of use ("ROU") asset, subject to certain permitted accounting policy elections.

Under ASC

842,

SPAR determines, at the inception of the contract, whether the contract is or contains a lease based on whether the contract provides SPAR the right to control the use of a physically distinct asset or substantially all of the capacity of an asset.

Many of SPAR's equipment leases are short-term or cancellable with notice. SPAR's office space leases have remaining lease terms between

one

and approximately

eleven

years, many of which include

one

or more options to extend the term for periods thereafter. Certain leases contain options to terminate the lease early, which

may

include a penalty for exercising the option. Many of the termination options require notice within a specified period, after which the option is

longer available to SPAR if

not

exercised. The extension options and termination options

may

be exercised at SPAR's sole discretion. SPAR does

not

consider in the measurement of ROU assets and lease liabilities an option to extend or terminate a lease if SPAR is

not

reasonably certain to exercise the option. As of the end of this reporting period, SPAR has

not

included any options to extend or terminate in its measurement of ROU assets or lease liabilities.

Certain of SPAR's leases include covenants that oblige SPAR, at its sole expense, to repair and maintain the leased asset periodically during the lease term. SPAR is

not

a party to any leases that contain residual value guarantees nor is SPAR a party to any leases that provide an option to purchase the underlying asset.

Many of SPAR's office space leases include fixed and variable payments. Variable payments relate to real estate taxes, insurance, operating expenses, and common area maintenance, which are usually billed at actual amounts incurred proportionate to SPAR's rented square feet of the building. Variable payments that do

not

depend on an index or rate are expensed by SPAR as they are incurred and are

not

included in the measurement of the lease liability.

Some of SPAR's leases contain both lease and non-lease components. Fixed and variable payments are allocated to each component relative to observable or estimated standalone prices. SPAR measures its variable lease costs as the portion of variable payments that are allocated to lease components.

SPAR measures its lease liability for each leased asset as the present value of lease payments, as defined in ASC

842,

allocated to the lease component, discounted using an incremental borrowing rate specific to the underlying asset. SPAR's ROU assets are equal to the lease liability. SPAR estimates its incremental borrowing rate based on the interest rate SPAR would incur to borrow an amount equal to the lease payments on a collateralized basis over a similar term in a similar economic environment.

The components of SPAR's lease expenses for the

nine

months ended

September 30, 2020

and

2019,

which are included in the condensed consolidated income statement, are as follows (in thousands):

		Three Months Ended		Three Months Ended		Nine Months Ended		Nine Months Ended
Lease Costs	Classification	September 30, 2020		September 30, 2019		September 30, 2020		September 30, 2019
Operating lease cost	Selling, General and Administrative Expense	$	701	$	482	$	2,084	$	1,544
Short-term lease cost	Selling, General and Administrative Expense	$	90	$	20		305		76
Variable costs	Selling, General and Administrative Expense	$	97	$	290		291		875
Total lease cost		$	888	$	792	$	2,680	$	2,495

Supplemental cash flow information related to SPAR's leases for

nine

months ended

September 30, 2020

and

2019

is as follows (in thousands):

	Three Months Ended		Three Months Ended			Nine Months Ended		Nine Months Ended
	September 30, 2020		September 30, 2019			September 30, 2020		September 30, 2019

Cash paid for amounts included in the measurement of lease liabilities	$	795	$	201		$	2,335	$	1,553

Assets obtained in exchange for new operating lease liabilities
Operating lease	$	-	$	5,736	(a)	$	213	$	5,736	(a)

(a) Amounts for the

nine

months ended

September 30, 2019

include the translation adjustment for the adoption of ASU

2016

discussed in Note

10.

September 30, 2020

, SPAR had the following maturities of lease liabilities related to office space and equipment, all of which are under non-cancellable operating leases (in thousands):

Period Ending September 30,	Amount
2020	$	603
2021		1,387
2022		737
2023		136
Total Lease Payments		2,863
Less: imputed interest		121
Total		2,742