The Company determines if an arrangement is or contains a lease at contract inception. These lease agreements have remaining lease terms of 1 to 5 years. The Company recognizes a right-of-use (“ROU”) asset and a lease liability at the lease commencement date. The lease liability is initially measured at the present value of the unpaid lease payments as of the lease commencement date. Key estimates and judgments include how the Company determines (1) the discount rate it uses to discount the unpaid lease payments to present value, (2) the lease term, and (3) lease payments.

ASC 842 requires a lessee to discount its unpaid lease payments using the interest rate implicit in the lease or, if that rate cannot be readily determined, its incremental borrowing rate. Generally, the Company cannot determine the interest rate implicit in the lease because it does not have access to the lessor's estimated residual value or the amount of the lessor's deferred initial direct costs. Therefore, the Company generally uses its incremental borrowing rate as the discount rate for the lease. The Company's incremental borrowing rate for a lease is the rate of interest it would have to pay on a collateralized basis to borrow an amount equal to the lease payments under similar terms. Because the Company does not generally borrow on a collateralized basis, it uses quoted interest rates obtained from financial institutions as an input to derive an appropriate incremental borrowing rate, adjusted for the amount of the lease payments, the lease term, and the effect on that rate of designating specific collateral with a value equal to the unpaid lease payments for that lease.

The Company’s lease agreements may include options to extend the lease following the initial term. At the time of adopting ASC 842, the Company determined that it was reasonably certain it would exercise the option to renew; accordingly, these options were considered in determining the initial lease term. The Company elected the practical expedient of hindsight in determining the option to renew. The Company has since reassessed the assumption of the renewal term and determined that due to the COVID-19 pandemic, the Company is now expecting more of its workforce to be working from home permanently. Therefore, expecting a reduction in overall square footage of office space needs, the Company no longer believes it is reasonably certain it will exercise most of its options to renew, and therefore, has removed the renewal term of several lease obligations. The subsequent re-measurement reduced the right-of-use asset and related lease liability on the consolidated balance sheet, but had an immaterial impact on the income statement.

For lease agreements entered into or reassessed after the adoption of ASC 842, the Company has elected the practical expedient to account for the lease and non-lease components as a single lease component. Therefore, for those leases, the lease payments used to measure the lease liability include all of the fixed consideration in the contract.

Variable lease payments associated with the Company’s leases are recognized upon occurrence of the event, activity, or circumstance in the lease agreement on which those payments are assessed.

Leases with an initial term of 12 months or less are not recorded on the consolidated balance sheet. The Company recognizes lease expense for these leases on a straight-line basis over the lease term.

The components of lease expenses are as follows:


	March 31, 2023		March 31, 2022		March 31, 2021
Operating lease expense	$	12,259,000	$	13,768,000	$	15,591,000
Finance lease expense		92,000		98,000		77,000
Short-term lease expense		16,000		13,000		174,000
Variable lease expense		555,000		495,000		328,000
Total lease expenses	$	12,922,000	$	14,374,000	$	16,170,000

The following table presents assets and liabilities recorded on the Company’s consolidated balance sheets related to its operating leases:


	March 31, 2023			March 31, 2022
Right-of-use asset, net	$	27,721,000		$	35,020,000
Short-term lease liability	$	9,900,000		$	13,348,000
Long-term lease liability		23,860,000			29,792,000
Total lease liabilities	$	33,760,000		$	43,140,000
Weighted average remaining lease term	4.07 years			4.32 years
Weighted average finance lease term	2.25 years			3.25 years
Weighted average discount rate		2.8	%		2.6	%

Supplemental cash flow information related to operating leases for fiscal years ended March 31, 2023 and 2022 were as follows:


	March 31, 2023			March 31, 2022
Cash paid for amounts included in the measurement of operating lease liabilities	$	14,348,000		$	15,001,000
Operating lease liabilities arising from obtaining ROU assets	$	55,269,000		$	54,311,000
Finance lease liabilities arising from obtaining ROU assets	$	358,000		$	358,000
Reductions to ROU assets resulting from reductions to operating lease liabilities	$	(4,912,000	)	$	1,550,000

As of March 31, 2023, maturities of operating and financing lease liabilities for each of the next five years and thereafter are as follows:


2024	$	10,638,000
2025		8,579,000
2026		6,195,000
2027		4,472,000
2028		3,464,000
Thereafter		2,660,000
Total lease payments		36,008,000
Less interest		(2,248,000	)
Total lease liabilities	$	33,760,000

As of March 31, 2023, the Company has approximately $5.0 million of additional operating lease commitments that have not yet commenced. These leases commence in 2023 and have lease terms between 3 years and 5 years.