the contract contains a lease or not? (the impact on the ending balance sheet and income statement? )

use Retail Unit A in the department store

The contract requires to use Retail Unit A to sell its goods during the hours that the larger retail space is open. makes all of the decisions about the use of the retail unit during the period of use. For example, decides on the mix of goods sold from the unit, the pricing of the goods sold, and the quantities of inventory held. Portable Energy also controls physical access to the unit throughout the five-year period of use.

The contract requires Portable Energy to make fixed payments to , as well as variable payments that are a percentage of sales from Retail Unit A. provides cleaning and security services, as well as advertising services, as part of the contract.

Portable Energy is granted the right to use Retail Unit A in the department store. Based on the terms

in the contract, the property owner can require Portable Energy to relocate to another retail unit. In

that case, the property owner is required to provide Portable Energy with a retail unit of similar

quality and specifications to Retail Unit A and to pay for the relocation costs.

Is there an identified as set? No Consider paragraphs B13-820. Yes Does the customer have the right to obtain substantially No all of the economic benefits from use of the asset throughout the period of use? Consider paragraphs B21-823. Yes Customer Does the customer, the supplier, or neither party, have the right to direct how and for what purpose the asset is Supplier used throughout the period of use? Consider paragraphs B25-830. Neither; how and for what purpose the asset will be used is predetermined Yes Does the customer have the right to operate the asset throughout the period of use, without the supplier having the right to change those operating instructions? Consider paragraph B24(b)(1). No Did the customer design the asset in a way that No predetermines how and for what purpose the asset will be used throughout the period of use? Consider paragraph B24(b)(ii) Yes The contract contains a lease The contract does not contain a lease