Which of the following is true about assessing purchase options?
Purchase options are assessed only if the lessee makes an up-front cash payment on the commencement date
Purchase options are assessed the same way as options to extend or terminate the lease are assessed
Purchase options are assessed in the same way lease incentives are assessed
Purchase options are not required to be assessed
Purchase options are assessed the same way as options to extend or terminate the lease are assessed. According to lease accounting principles, the assessment of a purchase option, which is similar to the evaluation of renewal or termination options. The lessee's obligation to exercise a purchase option should be considered in the same manner as the assessment of whether they will exercise an option to extend or terminate the lease.
