SRSEC Reporting Desk

Leases (ASC 842)

What to check in your filing: Check ROU/lease liability disclosures, discount rate judgments and classification.

3 staff comments from 3 companies. Outcomes: Responded: 2, Agreed to revise: 1

Frontier Group Holdings, Inc. (ULCC) · 2026-03-17 · Form 10-K for the Fiscal Year ended December 31, 2025 Filed February 18, 2026 · Comment 2 · Aircraft Rent Expense and Maintenance Obligations, page 108 Responded
Staff comment: We note that you report aircraft lease extensions in each period which impact your accruals for the right-of-use asset and corresponding liability, although which also yield reductions to aircraft rent due to changes in estimates for lease termination costs. Your accounting policy disclosure explains that some leases with initial terms greater than 12 months include rental escalation clauses, renewal options, termination options and/or other items that cause variability and are factored into the determination of lease payments when appropriate, although does not indicate how these assessments are based on or utilize the criteria of exercise being reasonably certain to occur. Please expand… letter →
Company response: to the Staff’s other questions, although this additional detail may no longer be necessary given that the Company did not exercise any aircraft lease extension options during the fiscal years ended December 31, 2025, 2024 and 2023. During the years ended December 31, 2025, 2024 and 2023, the Company extended a total of 44 aircraft leases. None of these 44 leases had been previously extended in any manner, including pursuant to the exercise of an extension option in the original lease or a separately negotiated amendment, and each lease was extended for the first time pursuant to a separately negotiated amendment to the original lease agreement. The Company has no history of exercising… response letter →
Leases (ASC 842)
HAWKINS INC (HWKN) · 2026-02-27 · Hawkins, Inc. Form 10-K for Fiscal Year Ended March 30, 2025 Form 8-K Furnished January 28, 2026 · Comment 2 · Note 14 - Leases, page 45 Agreed to revise
Staff comment: Please disclose the cash paid for amounts included in the measurement of lease liabilities pursuant to ASC 842-20-50-4.g.1. letter →
Company response: We intend to disclose cash paid for amounts included in the measurement of lease liabilities in the notes to our audited consolidated financial statements in future filings beginning with our Form 10-K for the year ending March 29, 2026. Note 15 - Segment Information, page 45 response letter →
Leases (ASC 842)
SMITH & WESSON BRANDS, INC. (SWBI) · 2026-01-16 · Form 10-K for the Fiscal Year Ended April 30, 2025 Form 10-Q for the Quarter Ended October 31, 2025 Form 8-K furnished D · Comment 1 · Note 3. Leases, page F-17 Responded
Staff comment: We note your disclosure that as part of the Relocation, on January 31, 2023, you entered into (i) an assignment and assumption agreement with AOUT, pursuant to which AOUT assumed all of your rights, entitlement, and obligations in, to, and under the Missouri Lease, or the Assignment and Assumption Agreement, and (ii) an amended and restated guaranty in favor of RCS-S&W Facility, LLC, as successor in interest to the Original Missouri Landlord, pursuant to which Smith & Wesson Sales Company was added as a guarantor, or the Amended and Restated Guaranty. We also note that because of the Amended and Restated Guaranty, you continue to account for this lease as you have since prior to the… letter →
Company response: At the time we entered into the Assignment and Assumption Agreement (the “Assignment Agreement”) and related Amended and Restated Guaranty (the “A&R Guaranty”), we evaluated the requirements of ASC 842-20-35-14, noting that, because we have not been relieved of our primary obligation under the head lease and also because the head lessor (RCS-S&W Facility, LLC) has equal recourse to us and the assignee under the Assignment Agreement (American Outdoor Brands, Inc.), we would be required to continue to account for the head lease in the same manner that we had before the effectiveness of the Assignment Agreement. This conclusion was reached based on the language in the A&R Guaranty that states… response letter →
Leases (ASC 842)Errors, Restatements & Item 4.02
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