The Governmental Accounting Standards Board (GASB) was established to develop the accounting and reporting standards to contribute to fostering visibility and transparency in financial reporting across Governmental entities. This accounting standard also allows Government Agencies to stay accountable to the benefit of the taxpayers and investors.
GASB helps review the existing accounting standards and also helps establish new ones for the benefit of the users. Furthermore, this board hosts discussions, speeches, and roundtables. They also issue user guides to help taxpayers understand financial statements.
GASB-87 is the latest lease accounting standard for governmental entities, effective for reporting periods beginning after June 15, 2021 (June 30, 2022, audits will be considered first).
This accounting standard establishes a single model for lease accounting based on the foundational principle that leases are financings of the right to use an underlying asset. Herein, a lessee is required to recognize a lease liability and an intangible right-to-use lease asset, and a lessor is required to recognize a lease receivable and a deferred inflow of resources. This helps enhance the relevance and consistency of information about governments' leasing activities.
GASB-87 is the latest lease accounting standard for government entities (specifically State and Local government agencies, Public Hospitals Higher Education, and Healthcare providers).
IBM TRIRIGA provides a complete solution that helps Governmental Agencies accelerate GASB 87 compliance and real estate portfolio performance.
IBM TRIRIGA provides:
It provides the following support for GASB 87 compliance scenarios:
To add on, in a government lessee, the lease accountant can apply the required accounting treatment in IBM TRIRIGA.
As regards transition to GASB 87, the statement requires that leases are recognized and measured using the facts and circumstances that existed at the beginning of the period of implementation. If applied to earlier periods, leases are recognized and measured using the facts and circumstances that existed at the beginning of the earliest period restated.
The cumulative effect, if any, of applying this statement is reported as a restatement of the beginning net position (or fund balance or fund net position, as applicable) for the earliest period restated.
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We have been helping clients with lease accounting compliance and portfolio management for several years. If you are looking for assistance, feel free to email us at email@example.com or contact us for more information.