The identified asset in the lease must be physically distinct and not substitutable.

Name: The identified asset in the lease must be physically distinct and not substitutable.
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In a lease, the identified asset must be physically distinct so that the lessee can obtain substantially all of the economic benefits from its use. It should not be substitutable by the lessor at its discretion, ensuring the lessee has control over the asset during the lease term.

The Identified Asset in the Lease Must Be Physically Distinct