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Purchase & Extension Options
Purchase and extension options affect whether you include additional periods or payments in your calculations.
Purchase Options
Include the exercise price if reasonably certain to purchase.
FRS 102 Reference: FRS 102.20.9, 20.50
Extension Options
Include extension periods if reasonably certain to extend. Also known as renewal options - your right to extend beyond the initial term.
Reasonably Certain Test
Consider: price vs market value, significant improvements, operational criticality.