The Company has lease agreements for real estate including corporate offices and warehouse space, vehicles and certain office equipment.

At the inception of a contractual arrangement, the Company determines whether it contains a lease by assessing whether there is an identified asset and whether the contract conveys the right to control the use of the identified asset in exchange for consideration over a period of time. If both criteria are met, the Company calculates the associated lease liability and corresponding right-of-use asset upon lease commencement. Operating lease assets and liabilities are recognized based on the present value of minimum lease payments over the lease term using an appropriate discount rate. Right-of-use assets also include any lease payments made at or before lease commencement and any initial direct costs incurred and exclude any lease incentives received.

The discount rate used is the rate that the Company would have to pay to borrow on a collateralized basis over a similar term for an amount equal to the lease payments in a similar economic environment. At the lease commencement date, the discount rate implicit in the lease is used to discount the lease liability, if readily determinable. If not readily determinable or lease do not contain an implicit rate, the Company’s incremental borrowing rate is used as the discount rate. Discount rates are updated when there is a new lease or a modification to an existing lease, and the methodology is reassessed annually.

The Company records operating lease liabilities within current liabilities or long-term liabilities based upon the length of time associated with the lease payments. The Company records its operating lease right-of-use assets as long-term assets. Leases with an initial term of 12 months or less are not recognized on the consolidated balance sheet. The Company have elected the practical expedient where lease agreements with lease and non-lease components are accounted for as a single lease component for all assets. The Company’s financing leases are not material to our financial statements.

The Company adopted ASC Topic 842 on April 1, 2019 using the optional transition method. As such, the disclosures required under ASC Topic 842 are not presented for periods before the date of adoption.

The Company elected the package of transitional practical expedients for leases existing prior to the adoption date. The Company did not reassess whether existing contracts are or contain leases, leases retained their historical lease classification and initial direct costs were not reassessed for capitalization under the new standard. Operating lease assets and liabilities were recognized based on the present value of minimum lease payments over the remaining lease term as of the adoption date.

The following table presents supplemental balance sheet information related to the Company’s operating leases:

	March 31, 2021		March 31, 2020
	(in $000's)
Assets
Operating lease right-of-use assets in other assets	$	6,109	$	11,760
Liabilities
Operating lease liabilities in other current liabilities		2,459		3,671
Operating lease liabilities in other long-term liabilities		3,657		8,549
Total operating lease liabilities	$	6,116	$	12,220

In March 2021, the Company acquired the building adjacent to its corporate headquarters that it had been leasing in Danvers, Massachusetts. The total acquisition cost for the land and building was approximately $17.5 million, with $3.4 million being recorded to land and $13.8 million being recorded to building and building improvements. In addition, the Company reclassified $11.0 million in leasehold improvements and $4.7 million in right-of-use assets and recorded a $0.5 million adjustment to remove the prior lease liability due to the termination of the lease agreement upon the property acquisition.

Expense charged to operations under operating leases was $4.1 million and $3.7 million during the fiscal years ended March 31, 2021 and 2020, respectively. Short-term lease expenses were not material.

(in thousands, except lease term and discount rate)

Fiscal Years Ended March 31,
2022	$	2,574
2023		1,404
2024		1,165
2025		617
2026		77
Thereafter		599
Total minimum lease payments		6,436
Less: imputed interest		(320	)
Present value of operating lease liabilities	$	6,116

Weighted average remaining lease term	4.02

Weighted average discount rate		1.96	%

In March 2021, as part of the $17.5 million purchase of a building located in Danvers, Massachusetts, we assumed existing leases with third parties for a portion of the building which are classified as operating leases. The leases have annual escalating payments and the latest expires in March 2025 in accordance with the terms and conditions of the existing agreement. For the year ended March 31, 2021, operating lease income was not material.