Question: Security Devices Inc. (SDI) needs additional office space to accommodate expansion. SDI wants to avoid income statement effects that would disrupt its attempts to smooth

Security Devices Inc. (SDI) needs additional office space to accommodate expansion. SDI wants to avoid income statement effects that would disrupt its attempts to “smooth” income over time.

Required:

1. Which lease classification would management prefer?

2. Would meeting its reporting objective be more difficult or less difficult under IFRS?

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