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Operating vs Capital Lease under FAS 13: We want to rent a facility. And we need to do a cap lease test.
Operating vs Capital Lease under FAS 13: We want to rent a facility. And we need to do a cap lease test. The monthly rent payments will be increased YoY based on the HICP-index (some kind of consumer index). This index today is about 3% higher then last year.In the 7d-test we need to calculate the monthly lease payments. Do we need to apply this index in a compounded way (3% Y2, 6% Y3, ...) or do we need to keep it flat over the full term of the rent ?Could anyone provide an answer and eventually provide some clear evidences/examples from trustworthy sources ?
