LEASES

Our leases primarily consist of operating leases for office space. All of our leases are operating leases. For any lease with an initial term in excess of twelve months, the related lease assets and lease liabilities are recognized on the condensed consolidated balance sheets as either operating or financing leases at the inception of an agreement where it is determined that a lease exists. We have lease agreements that contain both lease and non-lease components, and we have elected to combine lease and non-lease components for all classes of assets. Leases with an initial term of twelve months or less are not recorded on the condensed consolidated balance sheets. Instead we recognize lease expense for these leases on a straight-line basis over the lease term.

Operating lease assets represent the right to use an underlying asset for the lease term and operating lease liabilities represent the obligation to make lease payments. These assets and liabilities are recognized based on the present value of future payments over the lease term at the commencement date. We generally use a collateralized incremental borrowing rate based on information available at the commencement date, including the lease term, in determining the present value of future payments. Our lease terms generally do not include options to extend or terminate the lease unless it is reasonably certain that the option will be exercised.

Our leases typically require payment of real estate taxes and common area maintenance and insurance. These components comprise the majority of our variable lease cost and are excluded from the present value of our lease obligations. Fixed payments may contain predetermined fixed rent escalations. We recognize the related rent expense on a straight-line basis from the commencement date to the end of the lease term.

12. LEASES (CONTINUED)

The following table shows the supplemental balance sheet information related to our leases (in thousands):



	Balance Sheet Location	December 31, 2019
Assets
Operating leases	Other non-current assets	$	15,041
Total lease assets		$	15,041

Liabilities
Operating leases	Other current liabilities	$	1,926
Operating leases	Other non-current liabilities	17,483
Total lease liabilities		$	19,409

Components of our lease cost were as follows (in thousands):



	Statement of Operations Location	Three months ended December 31, 2019
Operating lease cost	Cost of goods sold and SG&A	$	852
Variable lease cost	Cost of goods sold and SG&A	23
Total lease cost		$	875

The following table below presents supplemental information related to operating leases (in thousands):



	Three months ended December 31, 2019
Cash paid for amounts included in the measurement of operating lease liabilities	$	416
Right-of-use assets obtained in exchange for new operating lease liabilities	$	—



		December 31, 2019
Weighted average remaining lease term - operating leases		8.0 years
Weighted average discount rate - operating leases		4.50%

The table below reconciles the undiscounted cash flows for each of the first five years as well as all the remaining years to the operating lease liabilities recorded on the condensed consolidated balance sheet as of December 31, 2019 (in thousands):



Fiscal year	Amount
Remainder of 2020	$	2,296
2021	3,070
2022	2,732
2023	2,420
2024	2,150
2025	2,142
Thereafter	9,219
Total future undiscounted lease payments	24,029
Less imputed interest	(4,620		)
Total reported lease liability	$	19,409

12. LEASES (CONTINUED)

As follows, aggregate annual future minimum rental commitments under operating leases with noncancelable terms of more than one year at September 30, 2019 were reported under previous lease accounting standards (in thousands):



Fiscal year	Amount
2020	$	2,596
2021	2,575
2022	2,314
2023	2,056
2024	2,095
Thereafter	11,361
Total minimum payments required	$	22,997