Proposal would change governments’ lease approaches

GASB proposes a principle for reporting.

State and local governments would report leases based on the principle that leases are financings of the right to use an underlying asset, under a proposal GASB issued in February.

The proposal would provide guidance for lease contracts for nonfinancial assets, such as vehicles, heavy equipment, and buildings. The proposed guidance would not apply to grants, donated assets, or leases of intangible assets such as patents and software licenses.

The limited exceptions in the draft guidance include financed purchases and short-term leases of 12 months or less. The exposure draft, Leases, would require a lessee government to recognize a lease liability and an intangible asset representing its right to use the leased asset. A lessor government would be required to recognize a lease receivable and a deferred inflow of resources.

The proposal also addresses lessee reporting on amortization expense, interest expense, and note disclosures, as well as lessor reporting on lease revenue, interest revenue, and note disclosures.

Comment can be submitted by email to director@gasb.org by May 31.

SPONSORED REPORT

Cybersecurity threats proliferating for midsize and smaller businesses

This report details how SMBs can properly protect private information from breaches, design and implement a cybersecurity policy, and create safeguards for training and education.

QUIZ

News quiz: Senate health care bill in the spotlight

Reports related to the Republican bill to repeal many provisions of the PPACA, other tax issues, and the giant AICPA ENGAGE Conference offered a diverse reading list for June. See how much you know about recent news with this short quiz.