Part 1. Madigan Inc. owns a large warehouse that can be subdivided into numerous subsections by inserting removable walls. It leases out different portions of storage space to its customers based on their respective needs. Bryant Company contracts with Madigan Inc. to reserve 1,000 square feet of space to store its excess inventory for a three-year period. The contract states that Bryant Company’s inventory will be stored in a specified location in the warehouse. However, Madigan Inc. has the right to shift Bryant Company’s inventory to another location within its warehouse at its discretion, subject to the requirement to provide 1,000 square feet for the three-year period. Madigan Inc. frequently reorganizes its space to meet the needs of new contracts. The cost of reallocating space is low compared to the benefits of being able to accommodate as many customers as possible in the warehouse.

Required:
Does the contract contain an identified asset?

Part2. Assume the same facts as Part 1 except that Bryant Company specified in its contract that its materials must be stored at a specific temperature. Madigan Inc. only has one location in its warehouse with a cooling system capable of maintaining the required temperatures based on the layout of its heating and cooling system.

Required:
Does the contract contain an identified asset?