Which one of the following events would result in a new measurement of lease payments?
The lessor refuses to modify the contractual term of the lease arrangement from five to four years
The lessor agrees to reduce the consideration received to secure an additional contract with the lessee
The lessee allows a renewal option with the lessor in the last year to lapse
The lessee exercises a purchase option, the terms of which are included in the original agreement
The event that would result in a new measurement of lease payments is:
The lessee exercises a purchase option, the terms of which are included in the original agreement.
When the lessee exercises a purchase option that was part of the original lease agreement, it triggers a reassessment of the lease payments, as the lessee is no longer leasing the asset but acquiring ownership. According to the lease accounting principles, this would lead to a new measurement of the lease liability or the right-of-use asset, depending on whether it was initially classified as a finance lease or an operating lease.
