Laserfiche WebLink
<br /> <br />HARDESTY & HANOVER, LLC <br />Notes to Statement of Direct Labor, <br />Fringe Benefits and General Overhead <br />For the Year Ended December 31, 2019 <br /> <br /> <br />NOTE 6: DESCRIPTION OF DEPRECIATION AND LEASING POLICIES (Continued) <br /> <br />The total net amount paid and deferred for rent for 2019 by Hardesty & Hanover, LLC was <br />$3,893,649. <br /> <br /> Capital Leases <br />The company leases telephone equipment and computer equipment under capital leases. The <br />economic substance of the leases is that the Company is financing the acquisition of the assets <br />through the leases, and, accordingly, it is recorded in the Company’s assets and liabilities. <br /> <br />Deferred Rent <br />The terms of the Company’s lease obligations provide for scheduled escalations in the monthly rent. <br />In accordance with FASB ASC Topic 840, Leases, the noncontingent rent increases are being <br />amortized over the lives of the leases on a straight-line basis. Deferred rent of $627,585 at <br />December 31, 2019 represents the unamortized rent adjustment at that date. <br /> <br />Lease Incentive Payable <br />Included within the Company’s lease agreements for its New York City Main office is an allowance <br />for the landlord to pay the cost of initial improvements to the property up to a maximum of <br />$4,372,254. The Company has recorded leasehold improvements and a credit to lease incentive <br />payable of $4,367,863. This liability is amortized on a straight-line basis over the life of the lease <br />and as a reduction of the annual rent expense in the current and future years. As of December 31, <br />2019 the remaining liability balance is $3,589,434. For the year ended December 31, 2019, rent <br />was reduced by $253,926. The new lease expires December 31, 2030. <br /> <br />Leased assets included in Property & Equipment <br /> <br />The lease agreements contain a bargain purchase option at the end of the lease term. Depreciation <br />of assets held under capital leases is appropriately included with depreciation expense. <br /> <br /> <br />NOTE 7: DESCRIPTION OF RELATED PARTY TRANSACTIONS <br /> <br />Hardesty & Hanover Construction Services, LLC and Hardesty & Hanover, LLC are wholly owned <br />subsidiaries of Hardesty & Hanover Holding, LLC. Please see footnote 4 for the overhead rate <br />structure. <br /> <br />Personal Use of Company Vehicles – Certain employees of the Company have personal usage of <br />company vehicles. Amounts attributable to this personal use ($13,606 for 2019) were disallowed in <br />compliance with FAR 31.205-6(m)(2). <br /> <br /> <br /> <br /> <br /> <br /> <br /> <br />-13-