b'LOS ANGELES FIRE AND POLICE PENSION SYSTEM NOTES TO FINANCIAL STATEMENTS JUNE 30, 2025 AND 2024NOTE11SUBSCRIPTION-BASEDINFORMATIONTECHNOLOGYARRANGEMENT (SBITA)The System entered into two subscription-based information technology arrangements (SBITAs). The first agreement is a three-year subscription for the right to use a document storage management system, which expires in June 2026. The second agreement is a three-year subscription for the right to use software and related licenses, which expires in December 2026. Variable payments based on the usage of the underlying assets are excluded from the subscription liability calculations but are recognized as outflows of resources in the period in which the obligation is incurred.As of June 30, 2025, the System recognized intangible assets related to SBITA, valued at $475,328 and related accumulated amortization of $284,880.The Systems principal and interest requirements to maturity for SBITA liability, as of June 30, 2025, are as follows: Year Ending Principal Interest Total2026 $ 161,703 $3,599 $165,302NOTE 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. During the fiscal year ended June 30, 2025, the following changes occurred in these agreements. The first lease expired in March 2025, after which the lessee continued occupancy on a month-to-month basis until vacating the space in June 2025. The second lease expired in April 2025 and was not renewed. Lease revenue for both leases was recognized through June 2025 and April 2025, respectively, and the related52SECTION 2FINANCIALS 67'