Question: Security Devices Inc. (SDI) needs additional office space to accommodate expansion. SDI wants to avoid additional debt in its balance sheet. Required: 1. What lease

Security Devices Inc. (SDI) needs additional office space to accommodate expansion. SDI wants to avoid additional debt in its balance sheet.

Required:
1. What lease classification would management prefer? Explain.
2. If SDI follows U.S. GAAP, how might SDI structure the lease agreement to avoid the additional debt? Explain.
3. Would avoiding the additional debt be more or less difficult under IFRS? Explain.

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