b'LOS ANGELES FIRE AND POLICE PENSION SYSTEM NOTES TO FINANCIAL STATEMENTS JUNE 30, 2024 AND 2023NOTE11SUBSCRIPTION-BASEDINFORMATIONTECHNOLOGYARRANGEMENT (SBITA)During the fiscal year, the System amended an existing agreement for the right to use the document storage management system to reduce the quarterly subscription payment from $27,630 to $25,143, retroactive to July 2023. It also entered into a three-year subscription-based information technology arrangement for the Office 365 Suite (Government), including software and licenses. The agreement is effective from January 2024toDecember2026.Anannualpaymentof$64,731isdueonthefirstdayoftheenrollment anniversary.Variablepaymentsbasedontheusageoftheunderlyingassetsareexcludedfromthe subscription liability calculations but are recognized as outflows of resources in the period in which the obligation was incurred.As of June 30, 2024, the System recognized intangible assetsSBITA, valued at $475,328 and related accumulated amortization of $126,444.The Systems principal and interest requirements to maturity for SBITA liability, as of June 30, 2024, are as follows: Year Ending Principal Interest Total2025 $ 156,552 $8,751 $ 165,3032026 161,703 3,599 165,302$ 318,255 $ 12,350 $ 330,605NOTE 12LEASESLAFPP as a LesseeThe System has evaluated its existing lease agreements as a lessee and determined that the amounts associated do not have a material effect on the Systems financial statements under GASB Statement No. 87, Leases. LAFPP as a LessorThe System entered into three lease agreements to provide office and retail space in the headquarters building to external parties. These leases meet the criteria for recognition as a lessor under GASB Statement No. 87.These leases have a term of three years, with no option for renewal. Per lease agreements, there are predetermined fixed-rate annual increases in lease payments.As a lessor, the System measures the lease receivable at the lease commencement date as the present value of payments expected to be received from tenants during the lease term. Subsequently, the lease receivable is reduced by the principal portion of lease payments received. The deferred inflow of resources is measured as the initial amount of the lease receivable, adjusted for lease payments received at or before the lease commencement date. Subsequently, the deferred inflow of resources is recognized as revenue over the life of the lease term. Interest is also recognized on the lease receivable earned during the current fiscal year as interest revenue. The System has recognized $265,956 in lease revenue during the current fiscal year ended to these leases. As of June 30, 2024, the System has lease receivables in the amount of $271,465. Also, the System has a deferred inflow of resources associated with these leases that will be recognized as revenue over the lease terms. As of June 30, 2024, the balance of the deferred inflow of resources is $251,705. 50 SECTION 2 Financials 67'