Cesle Pte Ltd $($CPL$),$ a company incorporated in Singapore and adopts $31$ December as its financial year, is in the business of manufacturing and retailing of electric motor vehicles. The company also constructs premises for customers

The company enters into lease agreements with customers for its motor vehicles, typically for a three$-$year period.

Under the terms of the agreement, the customer is free to decide how to use the vehicle within certain contractual limitations as follows:

$$ Maximum annual mileage: $20,000$ kilometre $($KM$)$

$$ Geographical location: Strictly limited to Singapore only

$$ Modifications to motor vehicles: Not allowed

In return, CPL will be responsible for the maintenance of the vehicle. At the end of the three$-$year lease term, the customer has the option to purchase the vehicle at a $10\%$ premium to the prevailing market price, or return the vehicle back to CPL$.$ CPL will then on$-$sell the vehicle through its retail outlets. The cashflows from retail sales are reflected as investing activities in the statement of cash flows.

Explain to the directors how the leased vehicles should be accounted for, from the commencement of the lease to the final sale of the vehicle, in the financial statements including the statement of cash flows.