Company: IPAR
Filing Date: 2025-05-05
Form Type: 10-Q
Source: 0001753926-25-000738
Chunk: 34

Company: INTERPARFUMS INC
Filing Date: 2025-05-05
Form: 10-Q
Item: Part I, Item 7
Chunk 34
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. AND SUBSIDIARIES   Notes to Consolidated Financial Statements   

7. 
Leases:   
 
The
Company leases its offices and warehouses, vehicles, and certain office equipment, substantially all of which are classified as
operating leases. The Company currently has no material financing leases. The Company determines if an arrangement is a lease
at inception. Operating lease assets and obligations are recognized at the lease commencement date based on the present value
of lease payments over the lease term.
 
In
determining lease asset value, the Company considers fixed or variable payment terms, prepayments, incentives, and options to
extend or terminate, depending on the lease. Renewal, termination or purchase options affect the lease term used for determining
lease asset value only if the option is reasonably certain to be exercised. The Company generally uses its incremental borrowing
rate based on information available at the lease commencement date for the location in which the lease is held in determining
the present value of lease payments.
 
As
of March 31, 2025, the weighted average remaining lease term was 3.9 years and the weighted average discount rate used to determine
the operating lease liability was 3.2%. Rental expense related to operating leases was $1.6 million and $1.6 million for the three months ended March 31, 2025 and 2024, respectively. Operating lease payments included in operating cash flows totaled $1.9
million and $1.5 million for the three months ended March 31, 2025 and 2024, respectively, and noncash additions to operating lease assets totaled $0.03 million and $0.2 million for the three months ended March 31, 2025 and 2024, respectively. 

8.
Share-Based Payments:   
 
The Company maintains a stock option program for key employees, executives and directors. The plans, all of which have been approved by shareholder vote, provide for the granting of both nonqualified and incentive options. Options granted under the plans typically have a six-year term and vest over a four to five-year period. The fair value of shares vested during the three months ended March 31, 2025 and 2024 aggregated $0.02 million and $0.04 million, respectively. Compensation cost, net of estimated forfeitures, is recognized on a straight-line basis over the requisite service period for the entire award. Forfeitures are estimated based on historic trends. It