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 has issued an exposure draft that would expand the requirements to subscription-based information technology arrangements.