What Is the Proper Accounting Treatment to Record a Variable

What is the proper accounting treatment to record a variable lease payment indexed off the CPI?

A) Calculate the lease liability based on expected payments over the life of the lease after considering increases in the CPI.
B) Calculate the lease liability based on the base payment and debit an additional expense in subsequent years based on the change in the CPI.
C) Record the lease liability based on highest annual increase in the CPI for the past 10 years.
D) Capitalize and depreciate the increased payments based on CPI indexing.

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