We have an problem dealing with an international lease. The lease is from the U.S. parent company, to a UK subsidiary.
The U.S. parent company organizes the lease as an operating lease; the UK Company doesn't know how to categorize the lease. The particulars (as the Brits would state), are as given:
Lease length 15 years.
Incremental borrowing rate=10%
Useful life 30 years.
Payment =$10000
Residual value $1000
No renewal of lease available.