Final answer:
A lessee typically depreciates a leased asset over the lease term unless the lease includes an option to purchase or renew, or the asset's useful life is expected to extend beyond the lease term.
Step-by-step explanation:
A lessee normally depreciates a leased asset over the term of the lease except when the lessee can reasonably assure renewal or purchase of the asset at the end of the lease term, or the lease term is for the major part of the economic life of the asset. In these cases, the useful life of the asset might extend beyond the lease term, and the asset is then depreciated over its useful life instead of the lease term. This generally aligns with the underlying principle of matching the depreciation period with the period during which the asset is expected to be used.
The details provided regarding lease termination relate to the practical aspects of how a lessee or a landlord terminates a lease and manages the vacating of the premises, which highlights the importance of understanding the terms of a lease. This is essential in both real estate and personal property leases, as the terms affect how assets are handled, depreciated, and accounted for financially.