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Note 9 - Leases
6 Months Ended
Apr. 30, 2020
Notes to Financial Statements  
Lessee, Operating Leases [Text Block]
9.
Leases
 
We lease certain office space for use in our operations. We assess each of these contracts to determine whether the arrangement contains a lease as defined by ASC
842
“Leases” ("ASC
842"
). In order to meet the definition of a lease under ASC
842,
the contractual arrangement must convey to us the right to control the use of an identifiable asset for a period of time in exchange for consideration. We recognize lease expense for these leases on a straight-line basis over the lease term and combine lease and non-lease components for all leases. Our office lease terms are generally from
three
to
five
years and generally contain renewal options. In accordance with ASC
842,
our lease terms include those renewals only to the extent that they are reasonably certain to be exercised. The exercise of these lease renewal options is generally at our discretion. In accordance with ASC
842,
the lease liability is equal to the present value of the remaining lease payments while the right of use (“ROU”) asset is based on the lease liability, subject to adjustment, such as for lease incentives. Our leases do
not
provide a readily determinable implicit interest rate and therefore, we must estimate our incremental borrowing rate. In determining the incremental borrowing rate, we consider the lease period and our collateralized borrowing rates.
 
Our lease population at
April 30, 2020
is comprised of operating leases where we are the lessee and these leases are primarily real estate for office space for our corporate office, division offices and design centers. As allowed by ASC
842,
we adopted an accounting policy election to
not
record leases with lease terms of
twelve
months or less on our Condensed Consolidated Balance Sheets.
 
Lease cost included in our Condensed Consolidated Statements of Operations in Selling, general and administrative expenses and payments on our lease liabilities are presented in the table below. Our short-term lease costs and sublease income are de minimis.
 
   
Three Months Ended
 
(In thousands)
 
April 30, 2020
 
Operating lease cost
 
$2,625
 
Cash payments on lease liabilities
 
$2,308
 
 
ROU assets are classified within Prepaids and other assets on our Condensed Consolidated Balance Sheets, while lease liabilities are classified within Accounts payable and other liabilities on our Condensed Consolidated Balance Sheets. The following table contains additional information about our leases:
 
 
(In thousands)  
At April 30, 2020
 
ROU assets
 
$21,144
 
Lease liabilities
 
$22,165
 
Weighted-average remaining lease term (in years)
 
3.7
 
Weighted-average discount rate (incremental borrowing rate)
 
9.5
%
 
Maturities of our operating lease liabilities as of
April 30, 2020
are as follows:
 
Year ended October 31,
 
(In thousands)
 
2020 (excluding the six months ended April 30, 2020)
 
$4,462
 
2021
 
8,069
 
2022
 
6,860
 
2023
 
3,584
 
2024
 
1,315
 
Thereafter
 
2,103
 
Total payments
 
26,393
 
Less: imputed interest
 
(4,228
)
Present value of lease liabilities
 
$22,165