GASB 87: Implementation Guide for Lease Accounting Standard

By Chirico Rozsa, CPA on September 10, 2019
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Chirico Rozsa, CPA

Audit Senior Manager | Healthcare


Requirements of GASB Statement No. 87, Leases

The Governmental Accounting Standards Board (GASB) has issued an Implementation Guide to help clarify, explain and elaborate on the requirements of Statement No. 87, Leases.

The guide provides questions and answers on several key topics related to the lease standard, including:

  • Scope and applicability,
  • Determining the term of a lease,
  • Determining if a lease qualifies for the short-term lease exception,
  • Recognition, measurement, and disclosure by lessees,
  • Recognition, measurement, and disclosure by lessors,
  • Accounting for contracts with multiple components and contract combinations,
  • Accounting for modifications and terminations of leases, and
  • Sale-leasebacks, lease-leasebacks, and intra-entity leases.

An appendix to the guide contains three illustrations, including:

  • Lessee reporting of an equipment lease,
  • Lessee reporting of a building lease with a lease incentive, and
  • Variable payments that depend on an index or rate.

The new guidance from GASB comes at a time when the Financial Accounting Standards Board (FASB) has proposed a delay in implementing its new lease standards for private companies. GASB has not announced any proposed change in the timetable for implementation of its lease standard.

For Additional Information and Guidance on Lease Standards

Freed Maxick will provide an alert with additional insights on the GASB implementation guide in the weeks ahead.

If you have questions or concerns related to this GASB action or our lease accounting services, please contact us directly at 716.847.2651.

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