What would indicate that a lessor should treat a lease as an operating lease?

The correct reasoning centers around the criteria established under accounting standards for lease classifications. A lease is classified as an operating lease when it does not meet any of the criteria specified by the "OWNES" acronym: Ownership transfer by the end of the lease term, a Bargain purchase option, the lease term is for the major part of the economic life of the asset, the lease must equal or exceed 90% of the fair value of the asset, or there is a Specialized nature of the asset.

When the present value of the lease payments is less than the asset’s fair value, it indicates that the lessor retains a significant portion of the risks and rewards associated with ownership, thus leading to the lease being classified as an operating lease. This is in line with the fundamental principles of leasing, which aim to differentiate between financing arrangements and usage contracts.

Other options do not adequately describe the criteria or situation that would necessitate an operating lease classification. For instance, meeting any of the "OWNES" criteria would typically lead to a finance lease classification instead. Therefore, recognizing that the present value of the lease payments being lower than the asset’s fair value is critical in determining that the lease should be treated as an operating lease.