Leases (GASB 87)
The Governmental Accounting Standards Board (GASB) Statement No. 87, Leases, establishes a single model for lease accounting based on the principle that leases are financings of the right to use an asset. There is no longer an operating vs capital classification. Lessees will recognize a lease liability and an intangible right-to-use asset, and lessors will recognize a lease receivable and a deferred inflow of resources.
GASB 87 is effective for fiscal year 2022, and applies to leases of tangible capital assets—including buildings, land, and equipment. In addition, GASB 96 expands the requirements to subscription-based information technology arrangements.
The materiality threshold for GASB 87 leases has been established at $500,000 for the State both as a lessee and lessor. Interest rates and AFIS implementation guidance will be forthcoming.
IMPLEMENTING GASB 87
The GAO is in the process of developing several resources to assist agencies with implementing GASB 87.
Items in development:
- GASB 87 Lease Decision Template
- Designed to assist agencies in documentation to determine if their leases meet the criteria for GASB 87 leases
- Identifying appropriate lease interest rates for leases where the interest rates are not identified
- GASB 87 Lease Debt Module Upload Template
- Designed to be used for GASB 87 leases that are in scope for upload to the new Lease Debt module
- Lease Debt Module training material
- Policy updates
GAO GUIDE & RESOURCES
Leases Introduction - CFO Meeting on 1/27/2021
GASB 87 Overview 8-19-21 -- CBT version is available in TraCorp under GASB87_GAO
Lease Accounting Decision Tree
GASB LITERATURE & RESOURCES
GASB Implementation Guide No. 2019-3, Leases
GASB 87 Implementation Guide 2020-1, questions 4.6 to 4.17
GASB 87 Implementation Guide 2021-1, questions 4.4 to 4.22
GASB Statement No. 95, Postponement of the Effective Dates of Certain Authoritative Guidance
GASB Statement No. 96, Subscription-Based Information Technology Arrangements
QUESTIONS
If you have questions or comments, please contact [email protected].
