PLANT, PROPERTY AND EQUIPMENT

12 Months Ended

Sep. 30, 2020

PLANT, PROPERTY AND EQUIPMENT

5. PLANT, PROPERTY AND EQUIPMENT

5.	PLANT, PROPERTY AND EQUIPMENT
	Plant, property and equipment consisted of the following at September 30:

	2020			2019
Leased manufacturing facility	$	-		$	21,183,756
Research equipment		3,898,242			3,320,358
Furniture and equipment		99,768			125,872
Leasehold improvements		5,519,161			149,239
		9,517,171			24,779,225
Accumulated depreciation and amortization		(3,673,178	)		(8,953,589	)
Net plant, property and equipment	$	5,843,993		$	15,825,636

The Company leases its manufacturing facility under a finance lease. Prior to the adoption of ASC 842 effective October 1, 2019, the Company accounted for the manufacturing facility lease under the build-to-suit provisions of ASC 840. This guidance required the Company to record an asset and liability for construction costs incurred because it was involved in the construction of structural improvements and took construction risk prior to the commencement of the lease. Upon occupancy of the facility, the Company determined that because the lease did not meet the criteria to qualify for a sale-leaseback transaction, the established asset and liability would remain on the Company’s balance sheet and is included with property and equipment at September 30, 2019. As of September 30, 2019, accumulated depreciation on the manufacturing facility approximated $5.6 million.

On October 1, 2019, the Company adopted ASC 842 and elected the optional transition method that allows for a cumulative-effect adjustment in the period of adoption and no restatement to prior periods. Under ASC 842, the manufacturing facility lease no longer meets the criteria for a build-to-suit lease and is instead is classified as a finance lease. Under the provisions of ASC 842, the Company recognized a right-of-use asset and lease liability for this facility. These balances are classified with other leased assets and liabilities and are no longer included with plant and equipment on the September 30, 2020 balance sheet.

Depreciation expense for the year ended September 30, 2020 totaled approximately $2.1 million. Depreciation expense for the year ended September 30, 2019 totaled approximately $588,000 and includes depreciation on the leased manufacturing building of approximately $514,000.