Would requiring reassessment of the lease term provide users of financial statements with more relevant information?
Please explain why. No. The G100 considers that reassessment each reporting date for all leases is impractical. Where reassessment does occur for material leases such as a change in the lease term (either by taking up an option period that had previously not been considered most likely or by choosing not to take up an option period that had been considered most likely) the carrying amount of the asset (and the liability) should be adjusted. The G100 does not believe annual reassessment of the lease term would in general provide useful information to users. Frequent changes could cause confusion on the part of users as period to period reassessments may be driven by current assessments that may not be relevant at the time the decision is actually made and will result in significant administrative burdens.
