CERTYNEX IFRS ACADEMY

Calvenor leases a hangar for a non-cancellable period of 5 years, with an option to extend for 3 years. The analysis of facts and circumstances concludes that Calvenor is reasonably certain to exercise that option. What lease term should be used?

5 years, because only the non-cancellable period binds Calvenor.

8 years.

3 years, being only the period covered by the option.

5 years, the 3-year option being only mentioned in the notes.