Quarterly report pursuant to Section 13 or 15(d)

Finance Lease ROU's

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Finance Lease ROU's
6 Months Ended
Dec. 31, 2019
Finance Lease ROU's  
Finance Lease ROU's

5.   Finance Lease ROU’s

As discussed above, the Company adopted ASC 842 effective July 1, 2019 using the modified retrospective approach for all leases entered into before the effective date.

iBio CDMO is leasing its facility in Bryan, Texas as well as certain equipment from the Second Eastern Affiliate under the Sublease. See Note 9 for more details of the terms of the Sublease.

The economic substance of the Sublease is that the Company is financing the acquisition of the facility and equipment. As the Sublease involves real estate and equipment, the Company separated the equipment component and accounted for the facility and equipment as if each was leased separately.

The following table summarizes by category the gross carrying value and accumulated amortization of finance lease ROU (in thousands):

 

 

 

 

 

 

 

 

 

    

December 31,

    

June 30,

 

 

2019

 

2019

ROU - Facility

 

$

25,761

 

$

 —

ROU - Equipment

 

 

7,728

 

 

 —

 

 

 

33,489

 

 

 —

Accumulated amortization

 

 

(5,043)

 

 

 —

Net finance lease ROU

 

$

28,446

 

$

 —

 

Amortization expense was approximately $415,000  and $830,000 for the three and six months ended December 31, 2019 , respectively.