How does Beef O Bradys recognize lease expense for lease payments?

Right-of-Use Assets and Lease Liabilities - The ROU assets represent the Company's right to use an underlying asset for the lease term and lease liabilities represent the Company's obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. The calculation of the operating lease ROU asset also includes any lease payments made to the lessor prior to the lease commencement date and is reduced by lease incentives received. The estimated lease term may include options to extend or terminate the lease when it is reasonably certain that management will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term.

Remeasurement - ln general, if changes in the lease payments occur requiring a remeasurement of the lease liability, an adjustment is made to the ROU asset, and if the ROU asset is zero, then an adjustment is made to net income. Upon remeasurement of lease liability, the discount rate will be updated as of that date on the basis of the remaining lease term.

Risk-Free Rate - For the Company's leases for which there is no disclosed or implicit interest rate, management uses the risk-free rate, if determinable, based on the information available at commencement date in determining the present value of lease payments. In determining the risk-free rate, management uses the daily U.S. Treasury Rate in effect at the commencement date of the lease and is for a term that approximates the estimated lease term. This policy election can be made separately by asset class and is applied, consistently, to all leases that fall within that asset class. The Company applies this policy, consistently, for all leases entered into within those asset classes.

Source: Item 23 — RECEIPTS. (FDD pages 66–330)