3 Leases 12 Points Q3.1 4 Points Ted Ltd (Customer) enters into a contract with Allen Ltd (Supplier) for the exclusive use of a ship for a ten-year period. Ted Ltd uses the ship to transport special materials and thus the ship is significantly modified to meet certain temperature requirements. Ted Ltd and Allen Ltd reach an agreement on a pre-determined schedule that outlines when and where the ship will sail throughout the ten years, and the contract specifies that Ted Ltd cannot carry hazardous materials as cargo. The contract requires Allen Ltd to operate the ship and is responsible for the safe passage of the cargo on board. If the ship becomes unseaworthy at any time throughout the ten years, Allen Ltd is obliged to replace the ship. Required: Based on AASB 16 Leases, analyse whether the contract between Ted Ltd and Allen Ltd should be treated as a lease contract