CERTYNEX IFRS ACADEMY

Fenouillet leases a warehouse for 6 years. The contract allows only the lessor to terminate it at the end of the fourth year; Fenouillet has no termination right. What non-cancellable period should be used?

4 years, because the contract may end after the fourth year.

4 or 6 years depending on the probability that the lessor exercises its termination right at the end of the fourth year.

6 years, the period covered by the lessor's option remaining in the non-cancellable period.

2 years, being the period covered by the lessor's termination option.