This study makes a number of important contributions. First, it contributes to the existing literature on functional fixation and presentation effects by documenting these effects in a new and important setting and by providing insight into what drives these effects. In so doing, this study also provides useful input to the boards in their ongoing deliberations relating to lease accounting and, more generally, relating to unit of account choices, which are ubiquitous in accounting. This study indicates that disaggregation of capitalized lease renewal options from capitalized non-cancelable lease obligations provides decision useful information for lending decisions. Interestingly, the decision usefulness arising from disaggregation does not appear to act through highlighting the nature of the underlying contract because all of our participants seemed to understand that the lease contract contained both fixed and optional renewal periods. Instead, as evidenced by our mediation analysis, the effect of disaggregating capitalized optional renewal periods acts by altering the importance that lenders place on nonfinancial factors. In contrast, the importance lenders place on financial factors remains relatively unchanged by disaggregation.