Larkspur Inc. offers boat tours around the City Reservoir. The company has signed a lease for a tour boat with an expected lifespan of six years, no estimated salvage value, and cost the leasing company $207,000. The terms of the lease are as follows:

		The lease term begins on January 1, 2019, and runs for 3 years.
		The lease requires payments of $51,900 each January 1, starting on January 1, 2019, and each payment includes $5,100 for maintenance and insurance costs.
		At the end of the initial lease term, the lease can be renewed for another two years at Larkspurs option for only $29,000 per year, including $2,000 for maintenance and insurance costs. The normal rental cost of a similar used boat is $33,500 per year. Larkspur expects to renew the lease for the second term.
		At the end of the lease term, the boat is to be returned to the lessor.
		The lessors implied interest rate is 6%, and Larkspur uses straight-line depreciation for similar equipment. Larkspurs year-end is May 31.

Assuming that Larkspur follows ASPE, identify how Larkspur should classify this lease.

Lease should be considered as____________

Assuming that Larkspur follows IFRS and the new leases standard IFRS 16, identify the circumstances under which the lease would result in a right-of use asset capitalized on Larkspurs statement of financial position.