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the new lease standard will require virtually all leases to be recorded on a company's balance sheet the lease term is one of the key input that can impact the classification and measurement of the lease identifying the lease term may not always be straightforward and getting this wrong could have a significant impact on the company's accounting for leases hi i'm priya singleton quality control officer at blue and company let's talk about some of the key considerations for determining the lease term and how the lease term impacts short-term leases to determine the lease term you start with the non-cancelable period in the lease and add the renewable option periods for renewals the lessee is reasonably certain to exercise as well as the periods covered by termination options if the lessee is reasonably certain of not exercising that option lastly you add any optional periods to extend or to terminate the lease that is controlled by the lessor this sounds like a simple formula right but

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