Revenue Recognition Revenues from history report and mobile app products are recognized on a cash basis. The Company s leases, which are included in Discontinued Operations, are accounted for as either operating leases or direct financing leases. At the inception of operating leases, no lease revenue is recognized and the leased motorcycles, together with the initial direct costs of originating the lease, which are capitalized, appear on the balance sheet as  motorcycles under operating leases-net . The capitalized cost of each motorcycle is depreciated over the lease term, on a straight-line basis, down to the Company s original estimate of the projected value of the motorcycle at the end of the scheduled lease term (the  Residual ). Monthly lease payments are recognized as rental income. Direct financing leases are recorded at the gross amount of the lease receivable (principal amount of the contract plus the calculated earned income over the life of the contract), and the unearned income at lease inception is amortized over the lease term. The Company s Retail Installment Sales Contracts ( RISC ), which are included in Discontinued Operations, are secured by liens on the titles to the vehicles. The RISCs are accounted for as loans. Upon purchase, the RISCs appear on the Company s balance sheet as RISC loan receivable current and long term. Interest income on these loans is recognized when it is earned. The Company realizes gains and losses as the result of the termination of leases, both at and prior to their scheduled termination, and the disposition of the related motorcycle. The disposal of motorcycles, which reach scheduled termination of a lease, results in a gain or loss equal to the difference between proceeds received from the disposition of the motorcycle and its net book value. Net book value represents the residual value at scheduled lease termination. Lease terminations that occur prior to scheduled maturity as a result of the lessee s voluntary request to purchase the vehicle have resulted in net