b'Capital Region Airport Commission NOTES TO FINANCIAL STATEMENTS June 30, 2025 and 2024 Note 1.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Leases and Subscription-Based IT Arrangements (SBITAs): (continued) Key Estimates and Judgments Lease and SBITA accounting includes estimates and judgments for determining the (1) rate used to discount the expected lease and subscription payments to present value, (2) lease and subscription term, and (3) lease and subscription payments. The Commission uses the interest rate stated in lease or subscription contracts. When the interestrate is not provided or the implicit rate cannot be readily determined, the Commission uses itsestimated incremental borrowing rate as the discount rate for leases and subscriptions. The lease and subscription terms include the noncancellable period of the lease or subscriptionand certain periods covered by options to extend to reflect how long the lease or subscriptionis expected to be in effect, with terms and conditions varying by the type of underlying asset. Fixed and certain variable payments as well as lease or subscription incentives and certain otherpayments are included in the measurement of the lease receivable (lessor), lease liability (lessee)or subscription liability.TheCommissionmonitorschangesincircumstancesthatwouldrequirearemeasurementor modification of its leases and subscriptions. The Commission will remeasure the lease receivable and deferred inflows of resources (lessor), the lease asset and liability (lessee) or the subscription asset and liability if certain changes occur that are expected to significantly affect the amount of the lease receivable, lease liability or subscription liability.Regulated Leases The leases between the Commission and air carriers and other aeronautical users are subject to external laws, regulations, or legal rulings. The Commission recognizes inflows of resources (revenue) based on the payment provisions of the lease contract.Net Position The difference between assets and deferred outflows of resources less liabilities and deferred inflows of resources is called net position. Net position is comprised of three components: net investment in capital assets, restricted, and unrestricted.Netinvestmentincapitalassetsconsistsofcapitalassets,netofaccumulateddepreciation/amortizationandreducedbyoutstandingbalancesofbonds,notes,andotherdebtthatareattributable to the acquisition, construction, or improvement of those assets. Deferred outflows ofresources and deferred inflows of resources that are attributable to the acquisition, construction, orimprovement of those assets or related debt are included in this component of net position. Restricted net position consists of restricted assets reduced byliabilities and deferred inflows ofresources related to those assets. Assets are reported as restricted when constraints are placed onasset use either by external parties or by law through constitutional provision or enabling legislation. Unrestricted net position is the net amount of the assets, deferred outflows of resources, liabilities,and deferred inflows of resources that does not meet the definition of the two preceding categories.28'