Hi there i just want to add that it is the present value of future payments that are put on the books as 'debt' (i.e. liability). Also, In situations where you

Hi there i just want to add that it is the present value of future payments that are put on the books as 'debt' (i.e. liability). Also, In situations where you truly do have a 'cheap' asset relative to the market, you are able to value that separately and many companies do. Search "below market leases 10K" for further information. Lease accounting guidance is very complex and there are many nuances that cover concerns in this thread. The point of the guidance is to determine the fair value.