Company: CAPL
Filing Date: 2025-02-27
Form Type: 10-K
Source: 0000950170-25-028082
Chunk: 147

Company: CrossAmerica Partners LP
Filing Date: 2025-02-27
Form: 10-K
Item: Item 1B
Chunk 147
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 Joe’s Kwik Marts have no direct responsibility to collect or remit such taxes to the taxing authorities. Lease AccountingWe lease certain sites from third parties under long-term arrangements with various expiration dates. Accounting guidance on leases requires the recognition of lease assets and lease liabilities on the consolidated balance sheet and disclosing key information about leasing arrangements. In order to measure our lease liability under our leases as lessee, we are required to discount our minimum rental payments using the rate implicit in the lease, unless such rate cannot be readily determined, in which case our incremental borrowing rate is used. As we do not know the amount of our lessors’ initial direct costs, we are generally unable to determine the rate implicit in our leases. As a result, we generally use our incremental borrowing rate, which is the rate we would have to pay to borrow an amount equal to the lease payments on a collateralized basis over a similar term in a similar economic environment. We considered the rates we paid in previous financing and sale-leaseback transactions, the rates on our borrowings under our prior secured revolving credit facility and mortgage rates on commercial properties for various terms in developing our incremental borrowing rates. 

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CROSSAMERICA PARTNERS LPNOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

ASC 842–Leases requires leases be evaluated and classified as either operating or finance for financial reporting purposes. The lease term used for lease evaluation includes option periods only in instances in which the exercise of the option period is reasonably certain. We have elected to not recognize lease assets and lease liabilities on the balance sheet for leases with an initial term of one year or less. Generally, lease payments are expensed on a straight-line basis over the term of the lease including renewal periods that are reasonably certain at the inception of the lease. In addition to these lease payments, certain leases require additional contingent payments based on sales volume or future inflation, which are expensed as incurred.See Notes 11 and 13 for additional information.Income TaxesOur wholly owned taxable subsidiaries recognize deferred income tax assets and liabilities for the expected future income tax consequences of temporary differences between financial statement carrying amounts and the related income tax basis.Income tax attributable to our earnings and losses, excluding the earnings and losses of our wholly owned taxable subsidiaries, are assessed at the individual level of the unitholder. Accordingly, we do not record a provision for income taxes other than for those earnings and losses generated or incurred by our wholly owned taxable subsidiaries.Tax positions not meeting the more-likely-than-not recognition