Which one of the following conditions must be present for a lessor to account for a modification of a finance lease as a separate lease?
The modification must decrease the scope of the lease by decreasing the right to use one or more underlying assets or the consideration for the lease decreases by an amount commensurate with the stand-alone price for the decrease in scope
The modification must increase the scope of the lease by adding the right to use one or more underlying assets and the consideration for the lease increases by an amount commensurate with the stand-alone price for the increase in scope
The modification must decrease the scope of the lease by decreasing the right to use one or more underlying assets and the consideration for the lease decreases by an amount commensurate with the stand-alone price for the decrease in scope
The modification must increase the scope of the lease by adding the right to use one or more underlying assets or the consideration for the lease increases by an amount commensurate with the stand-alone price for the increase in scope
For a lessor to account for a modification of a finance lease as a separate lease, the condition that must be present is that the modification must increase the scope of the lease by adding the right to use one or more underlying assets and the consideration for the lease increases by an amount commensurate with the stand-alone price for the increase in scope. This is in line with the requirements outlined in the reference material you've provided. Therefore, the correct answer is:
The modification must increase the scope of the lease by adding the right to use one or more underlying assets and the consideration for the lease increases by an amount commensurate with the stand-alone price for the increase in scope.
