In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). UNIFI adopted the new lease guidance utilizing the modified retrospective transition method, applied at the date of adoption, recording existing leases as of the effective date, July 1, 2019. Under this method, no adjustment to comparative prior periods is required and, accordingly, financial statement information and disclosures required under Topic 842 will not be provided for dates and periods prior to July 1, 2019. UNIFI made no adjustment to the July 1, 2019 opening retained earnings balance for fiscal 2020.

UNIFI adopted the following practical expedients and elected the following accounting policies related to this standard update:

UNIFI routinely leases sales and administrative office space, warehousing and distribution centers, manufacturing space, transportation equipment, manufacturing equipment, and other information technology and office equipment from third parties. The lease terms range from 1 to 15 years with various options for renewal. There are no residual value guarantees, restrictions, covenants or sub-leases related to these leases. Variable lease payments are determined as the amounts included in the lease payment that are based on the change in index or usage. The adoption of this standard resulted in the recognition of operating lease right-of-use assets of $9,802 and corresponding lease liabilities of $10,105 with the difference adjusting prepayments and accruals on the consolidated balance sheet as of July 1, 2019. UNIFI’s accounting for finance leases remained substantially unchanged. The standard did not materially impact operating results or liquidity. Disclosures related to the amount, timing and uncertainty of cash flows arising from leases are included below.

The following table sets forth the balance sheet location and values of the Company’s lease assets and lease liabilities at June 28, 2020:

Classification	Balance Sheet Location	June 28, 2020
Lease Assets
Operating lease assets	Operating lease assets	$	8,940
Finance lease assets	Property, plant & equipment, net		22,012
Total lease assets		$	30,952

Lease Liabilities
Current operating lease liabilities	Current operating lease liabilities	$	1,783
Current finance lease liabilities	Current portion of long-term debt		3,563
Total current lease liabilities		$	5,346

Non-current operating lease liabilities	Non-current operating lease liabilities	$	7,251
Non-current finance lease liabilities	Long-term debt		7,818
Total non-current lease liabilities		$	15,069

Total lease liabilities		$	20,415

The following table sets forth the components of UNIFI’s total lease cost for fiscal 2020:

	For The Fiscal Year
Lease Cost	June 28, 2020
Operating lease cost	$	2,503
Variable lease cost		483
Finance lease cost:
Amortization of lease assets		2,527
Interest on lease liabilities		439
Short-term lease cost		1,124
Total lease cost	$	7,076

As of June 28, 2020, UNIFI was committed to leasing certain transportation equipment (i) commencing in the second quarter of fiscal 2021 and (ii) comprising finance leases of approximately $727.

The following table presents supplemental information related to leases at June 28, 2020:

	For The Fiscal Year
Other Information	June 28, 2020
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows used by operating leases	$	2,503
Financing cash flows used by finance leases	$	6,035
Non-cash activities:
Leased assets obtained in exchange for new operating lease liabilities	$	5,525
Leased assets obtained in exchange for new finance lease liabilities	$	6,301

UNIFI calculates its operating lease liabilities and finance lease liabilities entered into after the adoption of the new lease standard based upon UNIFI’s incremental borrowing rate (the “IBR”). When determining the IBR, we consider our centralized treasury function and our current credit profile. We then make adjustments to this rate for securitization, the length of the lease term, and leases denominated in foreign currencies. Generally, the IBR for each jurisdiction is the specific risk-free rate for the respective jurisdiction incremented for UNIFI’s corporate credit risk.

The following table sets forth UNIFI's weighted average remaining lease term in years and discount rate percentage used in the calculation of its outstanding lease liabilities as of June 28, 2020:

Weighted Average Remaining Lease Term and Discount Rate	June 28, 2020
Weighted average remaining lease term (years):
Operating leases		6.6
Finance leases		4.2
Weighted average discount rate (percentage):
Operating leases		5.0	%
Finance leases		3.6	%

Future minimum finance lease payments and future minimum payments under non-cancelable operating leases with initial lease terms in excess of one year under Topic 842 as of June 28, 2020 by fiscal year were:

Maturity of Lease Liabilities	Finance Leases			Operating Leases
Fiscal 2021	$	3,989		$	2,168
Fiscal 2022		3,684			1,722
Fiscal 2023		1,308			1,494
Fiscal 2024		1,309			1,223
Fiscal 2025		1,165			1,084
Fiscal years thereafter		1,410			3,071
Total minimum lease payments	$	12,865		$	10,762
Less estimated executory costs		(569	)		—
Less imputed interest		(915	)		(1,728	)
Present value of net minimum lease payments		11,381			9,034
Less current portion of lease obligations		(3,563	)		(1,783	)
Long-term portion of lease obligations	$	7,818		$	7,251

As reported in the 2019 Form 10-K under the previous accounting guidance, rental expenses incurred under operating leases and included in operating income consist of the following: