1. Understanding gasb statement number 87
leases
Understanding gasb statement number 87

2. Certified continuing professional education class
2-hour credit
Must remain for the entirety of the class to receive CPE credit
Must sign in and sign out to receive CPE credit
Certificates of attendance will be ed for CPE credit

3. leases Who/what are GASB and GAAP? Definition of a lease
Lessor requirements
Improving the financial reporting of leases
Reporting periods beginning after December 15, 2019

4. What is GAAP? Proper accounting Decades of accounting practice
No authoritative book

5. What is GAAP? Does not account for every situation
Make the best choice
Rule makers leave room for options

6. What is GAAP? The grey area of materiality Qualitative aspects
Quantitative aspects

7. Who Sets Up GAAP? GASB sets the GAAP rules GASB provides:
Accounting principles
Interpretations
Guidance for implementation

8. GASB Statement No. 76 Category A Category B GASB Statements
GASB Technical Bulletins
GASB Implementation Guides
American Institute of Certified Public Accountants (AICPA) literature cleared by GASB

9. GASB Statement No. 76 If not Specified in Category A or B
AICPA literature not cleared by the GASB
Practices widely practiced by state and local government agencies
Literature from professional organizations, regulatory agencies, and authoritative accounting texts

10. leases
GASB Statement No. 87

11. definition
Financing of the right to use an underlying asset (nonfinancial asset)
As specified in the contract for a period of time
An exchange or exchange-like transaction
Contracts meeting this definition are accounted for under lease guidance

12. Nonfinancial asset examples
Buildings
Land
Vehicles
Equipment

13. Lessee and lessor
GASB Statement No. 87

14. Lessee and Lessor Lessee required to: Lessor required to:
Record a lease liability
Have an intangible right-to-use lease asset
Lessor required to:
Recognize a lease receivable
Recognize deferred inflow of resources

15. Lease term
A period during which a lessee has noncancelable right to use an underlying asset
Plus the following periods, if applicable:

16. Lessee Lease term Periods covered by a lessee’s option to:
Extend the lease if it is reasonably certain, based on all relevant factors, that the lessee will exercise that option
Terminate the lease if it is reasonably certain, based on all relevant factors, that the lessee will not exercise that option

17. Lessor Lease term Periods covered by a lessor’s option to:
Extend the lease if it is reasonably certain, based on all relevant factors, that the lessor will exercise that option
Terminate the lease if it is reasonably certain, based on all relevant factors, that the lessor will not exercise that option

18. Fiscal funding or cancellation clause
Affects the lease term if reasonably certain the clause will be exercised
Lessee or lessor reassess the lease term only if one or more of the following occur:

19. Reassessing the lease term
Lessee or lessor exercises an option even though previously reasonably certain was not
Lessee or lessor does not exercise an option even though previously reasonably certain was
Event specified in the contract requiring an extension or termination of the lease

20. Short-term leases
Defined: a lease that, at the commencement of the lease term,
Has a maximum possible term under the lease contract of 12 months (or less),
Including any options to extend, regardless of their probability of begin exercised

21. Short-term leases
Lessees and lessors recognize short-term lease payments
As outflows (lessees) or inflows (lessors) of resources
Based on the payment provisions of the lease contract

22. Lessee accounting
Recognize a lease liability and a lease asset at commencement of the lease term unless:
A short-term lease
Or it transfers ownership of the underlying asset

23. Lessee accounting
Measured at the present value of payments expected to be made during the lease term
Less any lease incentives
Measured at the amount of the initial measurement of the lease liability
Plus any payments made to the lessor
At or before commencement of the lease term and certain direct costs

24. Lessee accounting Reduce the lease liability as payments are made
Recognize an outflow of resources (expense) for interest on the liability
Amortize the lease asset in a systematic and rational manner
Over the shorter of the lease term or the useful life of the underlying asset

25. Lessee accounting Notes to the financial statements includes:
A description of leasing arrangements
The amount of lease assets recognized
Schedule of future lease payments to be made

26. Lessor accounting
Recognize a lease receivable and a deferred inflow of resources at commencement of the lease term except:
Leases of assets held as investments
Certain regulated leases
Short-term leases
Leases that transfer ownership of the underlying asset

27. Lessor accounting
Should not derecognize the asset underlying the lease
Lease receivable measured at the present value of lease payments expected to be received during the lease term
Deferred inflow of resources measured at value of the lease receivable
Plus payments received at or before commencement relating to future periods

28. Lessor accounting Recognize interest revenue on the lease receivable
An inflow of resources (revenue) from the deferred inflows of resources
Systematically and rationally over the term of the lease

29. Lessor accounting Notes to the financial statements includes:
A description of leasing arrangements
Total amount of inflows of resources recognized from leases

30. Contracts with multiple components and contract combinations
GASB Statement No. 87

31. Contracts with multiple components and contract combinations
Account for lease and nonlease components of a lease as separate contracts
Multiple underlying assets accounted as separate lease contracts
Use contract prices for individual components
If an estimate is not practicable, account for multiple components as a single lease unit

32. Lease modifications and terminations
GASB Statement No. 87

33. Lease modifications and terminations
Amendments to a lease contract is a lease modification
Remeasure the lease liability (lessee) and lease receivable (lessor)
If the lessee’s right to the use of the asset decrease, it is a partial or full lease termination
The lease liability (lessee) and lease receivable (lessor) is recognized as a gain or loss

34. Subleases and leaseback transactions
GASB Statement No. 87

35. Subleases transactions
Treated as transactions separate from the original lease
Original lessee becomes the lessor in a sublease
Account for original lease (lessee) and sublease (lessor) as separate transactions

36. Sale-leaseback transactions
The owner of a property (seller-lessee) sells the property and simultaneously leases it back from the purchaser-lessor
The seller of the asset becomes the lessee and the purchaser becomes the lessor in this arrangement.
Useful to untie the cash invested in an asset for other investments, but the asset is still needed in order to operate.

37. Sale-leaseback transactions
A lease transaction that includes a sale
The sale and lease portions of a transactions account as separate transactions
Differences between the carrying value of the asset sold and net proceeds report as deferred inflow or outflow
Recognized over the term of the lease

38. Effective date Reporting periods beginning after December 15, 2019.
Earlier application is encouraged

39. Improving accounting and financial reporting
Increases the usefulness of government’s financial statements reporting lease liabilities that are currently not reported
Enhances comparability of financial statements among governments
Required lessees and lessors to report leases under a single model
Required notes to the financial statements enhances timing and significance of a government’s leasing arrangements

40. NextGen General Ledger Dataviewer
Local Government Corporation

41. Dataviewer Tool
Dataviewer is a tool used to create various types of spreadsheet style reports exportable to Excel, HTML.
This program allows the user to manipulate the cells and column format to suit individual needs.

42. There are two different types of basic functions of Dataviewer within the NextGen (NG) software.
Dataview Wizard which is where you create you reports.
Dataview is where you can look at the data in your report formats.

43. Dataview Wizard

44. Dataview Wizard is found by logging into NG 1
Dataview Wizard is found by logging into NG Choosing financial management, Reporting Dataview Wizard

45. Dataview Types

46. Choose the type of report you want to create a spreadsheet for

47. Options for Adding and Moving
Your Report Columns

48. Select the columns desired and click once on “Add” to add to the Selected Column(s).

49. Changing Column Names Click on Next
Click on column names and change them to what is desired.
Click on Next

50. Name the report and give it a description.
Click on Next and Finish
The newly created revenue and expense report named “Budget Status Analysis” is now ready to be used in Dataview.

51. Dataview

52. Dataviews are found by logging onto NG, choosing financial management, and Dataviews..

53. Fill in the General tab information.
For this example click on the 101 General fund box.
If you see a red shield icon, it is a required field and must be filled in.

54. Click on the Advanced tab.
For this example click on the Expenditures box.
Click on Next to produce the report.

55. Right click on the % Used header and choose format.
Choose Percentage and OK .

56. Notice the numbers underneath the % Used header changed to percents

66. Questions?