Drawing on research in psychology, we predict that, by treating options as if they have already been exercised, users are, paradoxically, likely to treat firms with renewal options as if they have less operational flexibility than if they had no renewal options and were, therefore, exposed to the risk of adverse movements in rental rates. In a similar vein, the proposed accounting could also create an apparent difference between firms that are economically equivalent. In other words, we expect the proposed accounting for renewal options to have limited decision usefulness because, by lumping optional renewal periods and the fixed lease term into a single unit of account, it does not faithfully represent the economics inherent in lease renewal options.