New accounting standard proposed for federal entities’ leases

FASAB wants useful reporting on intergovernmental and short-term leases.

The Federal Accounting Standards Advisory Board (FASAB) proposed to change lease accounting for federal government entities.

The proposal would include a comprehensive set of lease accounting standards to recognize federal lease activities in the reporting entity's general-purpose federal financial reports, as well as appropriate disclosures. It is titled Proposed Statement of Federal Financial Accounting Standards (SFFAS), Leases: An Amendment of SFFAS 5, Accounting for Liabilities of the Federal Government, and SFFAS 6, Accounting for Property, Plant, and Equipment.

Under the proposed standard, federal lessees would recognize a lease liability and a leased asset at the beginning of the lease, unless it is an intragovernmental lease or a short-term lease. A federal lessor would recognize a lease receivable and deferred revenue, except on an intragovernmental lease or a short-term lease.

An intragovernmental lease is a contract or agreement that conveys the right to use an asset for a period in exchange for consideration occurring within a consolidation entity or between two or more consolidation entities as defined under SFFAS 47, Reporting Entity. Recognition, measurement, and disclosure requirements for intragovernmental leases also are contained in the proposal.

Comments will be accepted through Jan. 6 by email to fasab@fasab.gov.

NEWS

IRS sets start date for tax season

The IRS announced that tax season will start in late January and that it will issue refunds to taxpayers despite the partial shutdown of the federal government.

PODCAST

Why CPAs can’t wait on automation tools

What do accounting firms waiting on others to develop AI, automation, and data analytics tools have in common with a baseball fan sitting in a stadium filling with water at an exponential rate? The answer could determine your firm’s fate.