Leases

12 Months Ended

Aug. 31, 2021

Leases

Leases

Note 8—Leases

Effective September 1, 2019 (the start of fiscal 2020), the Company adopted ASU 2016-02, Leases (Topic 842), using the modified retrospective approach and utilizing the effective date as its date of initial application. The Company has elected to apply the ‘package of practical expedients’ which allows it to not reassess i) whether existing or expired arrangements contain a lease, ii) the lease classification of existing or expired leases, or iii) whether previous initial direct costs would qualify for capitalization under the new lease standard.

At the inception of an arrangement, the Company determines whether the arrangement is or contains a lease based on the unique facts and circumstances present in the arrangement. Leases with a term greater than one year are recognized on the balance sheet as right-of-use (ROU) assets and short-term and long-term lease liabilities, as applicable. The Company does not have any financing leases that are material in nature.

Operating lease liabilities and their corresponding right-of-use assets are initially recorded based on the present value of lease payments over the expected remaining lease term. The interest rate implicit in lease contracts is typically not readily determinable. As a result, the Company utilizes its incremental borrowing rate to discount lease payments, which reflects the fixed rate at which the Company believes it could borrow on a collateralized basis the amount of the lease payments in the same currency, for a similar term, in a similar economic environment.

The Company has elected not to recognize leases with an original term of one year or less on the balance sheet. The Company typically only includes an initial lease term in its assessment of a lease arrangement. Options to renew a lease are not included in the Company’s assessment unless there is reasonable certainty that the Company will renew.

The following table presents the right-of-use asset and short-term and long-term lease liabilities amounts recorded on the consolidated balance sheet as of August 31, 2021 and 2020:

	August 31,		August 31,
	2021		2020
Assets
Operating lease right-of-use asset	$	9,312	$	8,821
Liabilities
Current (accrued expenses)	$	1,515	$	1,865
Operating lease long-term liabilities		7,202		6,395
Total lease liability	$	8,717	$	8,260

Lease cost

The components of lease costs for the years ended August 31, 2021 and 2020 are as follows:

	Year Ended August 31,
	2021		2020
Operating lease cost (a)	$	3,772	$	3,783

(a) Includes short-term leases and variable lease costs (e.g. common area maintenance), which are immaterial. ​ ​

Maturity of lease liability

The maturity of the Company's lease liabilities on August 31, 2021 was as follows:

	Future Operating
Year ending August 31,	Lease Payments
2022		1,750
2023		1,596
2024		1,519
2025		1,358
2026		1,075
2027 and thereafter		2,330
Less: Interest		(911)
Present value of lease liabilities	$	8,717

The weighted average remaining lease term and discount rates are as follows:

	August 31,			August 31,
	2021			2020
Lease Term and Discount Rate
Weighted average remaining lease term (years)
Operating leases		6.8			5.5
Weighted average discount rate (percentage)
Operating leases		3.1	%		3.1	%

Other Information

Supplemental cash flow information related to leases is as follows:

	Year Ended August 31,
	2021		2020
Operating cash outflows from operating leases	$	2,266	$	2,444
Total cash paid for amounts included in the measurement of lease liabilities	$	2,266	$	2,444

Total rental expense for all operating leases amounted to $3,772, $3,783 and $3,734 for the years ended August 31, 2021, 2020 and 2019, respectively.