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CITY OF PARIS, TEXAS Notes to Financial Statements (Continued) September 30, 2023 IV. Detailed Notes onW All Activities and Funds (Continued) L. Leases (Continued) Lease Liability The City, as a lessee, has entered into lease agreements involving equipment. The related obligations are presented in the amounts equal to the present value of lease payments, payable during the remaining lease term. As the lessee, a lease liability and the associated lease asset is recognized on the government -wide Statement of Net Position. The City did not incur expenses related to its leasing activities related to residual value guarantees, lease termination penalties or losses due to impairment. As a lessee, there are currently no agreements that include sale-leaseback and lease -leaseback transactions. As of September 30, 2023, the City had twelve active leases. The leases have payments that range from $647 to $32,734 and interest rates that range from 0.2480% to 4.8860%. As of September 30, 2023, the total combined value of the lease liability is $178,441, the total combined value of the short-term lease liability is $41,395. The combined value of the right to use asset, as of September 30, 2023 of $280,928 with accumulated amortization of $101,545 is included with the lease class activities table found below. The leases had no variable payments or other payments not included in the lease liability with in the fiscal year. As of Fiscal Year -End Lease Asset Accumulated Asset Class Value Amortization_ ,m.�.n_..... Equipment $ 280,928 $ 101,545 ........... Total Subscriptions $ 280,928 $ 101,545 As of September 30, 2023, the City had a minimum principal and interest payment requirements for its leasing activities, with a remaining term more than one year, as follows: Year Ending Governmental Activities September 30, Pring aa1Interest 2024 $ 41,395. $ 7,378 2025 37,371 5,975 2026 34,903 4,524 2027 32,285 3,056 2028 32,487 1,541 Totals $ 178,441 $ 22,474 M. Subscription -Based Information Technology Arrangements (SBITA) For the year ended September 30, 2023, the financial statements include the adoption of GASB Statement No. 96, Subscription -Based Information Technology Arrangements. The primary objective of this statement is to enhance the relevance and consistency of information about governments' subscription activities. This statement establishes a single model for subscription accounting based on the principle that subscriptions are financings of the right to use an underlying asset. Under this Statement, an organization is required to recognize a subscription liability and an intangible right -to -use subscription asset. 73