Lease Accounting and Terminology

The non-cancellable period of a lease, periods covered by an option to extend the lease if the lessee is reasonably certain to exercise that option, and periods covered by an option to terminate the lease if the lessee is reasonably certain not to exercise that option.

All relevant facts and circumstances that create an economic incentive for the lessee to exercise the option to extend the lease.

The occurrence of a significant event or a significant change in circumstances that is within the control of the lessee and affects whether the lessee is reasonably certain to exercise an option.

<p>Revise the lease term.</p> Signup and view all the answers

<p>Options to extend or terminate a lease are included in the lease term if the lessee is reasonably certain to exercise or not exercise them.</p> Signup and view all the answers

<p>By considering all relevant facts and circumstances that create an economic incentive for the lessee to exercise the option.</p> Signup and view all the answers

<p>The lease term is revised to exclude the period covered by the option.</p> Signup and view all the answers

<p>Because they can affect the duration of the lease and the lessee's financial obligations.</p> Signup and view all the answers

<p>It may trigger a reassessment of the lessee's options to extend or terminate the lease, leading to a revision of the lease term.</p> Signup and view all the answers

<p>To ensure that the lease term remains accurate and reflects any changes in the lessee's contractual obligations.</p> Signup and view all the answers