5 Steps to GASB 87 Lease Accounting Guide Compliance

Table of Contents

GASB 87 Lease Accounting Guide Introduction

The advent of the Governmental Accounting Standards Board Statement No. 87 represents a monumental transition in lease accounting for public organizations. With a commitment to precision and a systematic implementation plan, entities can adhere to this new benchmark, thus improving financial reporting accuracy.

The Scope and Impact of GASB 87

All government leasing contracts that meet the qualification criteria are subject to the GASB 87 Lease Accounting Guide. This entails categorizing leases as financial arrangements in balance sheets, necessitating comprehensive transaction analysis within the framework.

Comprehensive Strategies for Lease Inventory

An exhaustive inventory of all lease agreements is pivotal to a successful GASB 87 adoption. Deploying resources to evaluate every lease document is foundational, demanding scrutiny of contractual details and proper classification under the updated parameters.

Crafting a Compliant Approach to Lease Accounting

Developing policies that are in compliance with mastering quickbooks efficient financial management is critical in achieving GASB 87 adherence. Collaboration amongst key organizational functions is essential to establish clear criteria that support consistent application across all departments.

Delineating Leases as per GASB 87

Distinguishing between finance and short-term leases is a core aspect of adhering to GASB 87, each with unique reporting implications. Contract examination is thus vital to ensure the correct classification.

Technological Advantages in GASB 87 Implementation

Integrating technology significantly assists in conforming to GASB 87 standards, automating intricate computations, managing data, and maintaining consistency with the regulations.

Computing Lease Liabilities and Assets Accurately

With GASB 87, the calculation methods for lease liabilities and assets have been revamped, reflecting present values and the right to use the leased property, considering various adjustments.

GASB 87’s Precise Measurement and Recognition Requirements

Precise lease measurement and recognition are central to GASB 87, demanding an in-depth evaluation of all payment aspects and meticulous application of discount rates, including potential impairment losses.

Disclosure Standards for Lease Reporting

Detailed disclosures, as required by GASB 87, offer greater insight into leasing agreements, asset values, and overall lease-related expenses in financial statements.

Best Practices for Transitioning Processes

The transition to GASB 87 involves a strategic rollout, inclusive of stakeholder engagement, employee education, and the establishment of internal controls for accurate lease accounting.

Audit Readiness Post-GASB 87 Implementation

Ensuring audit readiness by maintaining precise and accessible lease documentation will facilitate smoother audit processes following GASB 87 standards adoption.

Commitment to Ongoing GASB 87 Adherence

Continuous adherence to GASB 87 involves regular monitoring, reassessment, and optimization of lease accounting protocols for sustained accuracy and efficiency.

Embracing the Evolution in Financial Reporting

By embracing the structured approach delineated herein, entities can proficiently navigate GASB 87’s complexities. This adherence begets enhanced transparency and trust in public financial disclosure.