Assets for Lease, net

3 Months Ended

Mar. 31, 2021

Assets for Lease, net

Assets for Lease, net

4.           Assets for Lease, net

The Company enters into contracts with customers for the Company’s QuantaFlo^® product. The Company has determined these contracts meet the definition of a lease under Topic 842. Operating leases are short-term in nature (monthly, quarterly or one year), and all of which have renewal options. The assets that may be associated with these leasing arrangements are identified below as assets for lease. Upon shipment under operating leases, assets for lease are depreciated. Upon shipment under variable-fee license contracts, these assets for lease are sold to the customers, and the asset is recognized as cost of revenue under Accounting Standards Codification or ASC 606, Revenue from Contracts with Customers. During the three months ended March 31, 2021 and 2020, the Company recognized approximately $7,194 and $6,457, respectively, in lease revenues related to these arrangements, which is included in Revenues on the Condensed Statements of Income.

Assets for lease consist of the following:

	March 31,		December 31,
	2021		2020
Assets for lease	$	3,266	$	3,407
Less: accumulated depreciation		(1,438)		(1,466)
Assets for lease, net	$	1,828	$	1,941

Depreciation expense amounted to $113 and $128 for the three months ended March 31, 2021 and 2020, respectively. Reduction to accumulated depreciation for returned items was $141 and $65 for the three months ended March 31, 2021 and 2020, respectively. The Company recognized a loss on disposal of assets for lease in the amount of $83 and $66 for the three months ended March 31, 2021 and 2020, respectively.