The lessee’s ________ is the rate of interest that a lessee would have to pay to borrow over a similar term, and with a similar security, the funds necessary to obtain an asset of a similar value to the right-of use asset in a similar economic environment. What is the missing phrase?
The contract inception rate
Interest rate implicit in the lease
Effective interest rate
Incremental borrowing rate
The missing phrase is "Incremental borrowing rate".