This video discusses the circumstances in which a guaranteed residual value can affect the lease accounting for a lessee. When the lessee expects the residual value of the leased asset to be equal to or higher than the guaranteed residual value, the lessee does NOT include the present value of the guaranteed residual value in the lease liability (this is also the case for an unguaranteed residual value). However, if the lessee expects the residual value to be lower than the amount it has guaranteed to the lessor, then the lessee must take the present value of the difference (the guaranteed residual value minus the expected residual value) and add this amount to the lease liability.