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In this video, the five tests used to determine if a lease should be classified as an operating lease or a finance lease are discussed. The new lease accounting standard requires all leases longer than one year to be capitalized, with the lessee recognizing an asset and a liability for lease payments on their balance sheet. The classification of the lease affects the income statement, determining if interest expense, amortization expense, or lease expense is recognized. Further details on accounting will be covered in a future video.