Laserfiche WebLink
<br /> <br />Future Accounting Standard Changes <br /> <br />The following Governmental Accounting Standards Board (GASB) Statements have been issued and may have an impact <br />on future City financial statements: (1) <br /> <br />GASB Statement No. 87 - Leases <br /> <br />Summary <br /> <br />The objective of this Statement is to better meet the information needs of financial statement users by improving <br />accounting and financial reporting for leases by governments. This Statement increases the usefulness of governments’ <br />financial statements by requiring recognition of certain lease assets and liabilities for leases that previously were <br />classified as operating leases and recognized as inflows of resources or outflows of resources based on the payment <br />provisions of the contract. It establishes a single model for lease accounting based on the foundational principle that <br />leases are financings of the right to use an underlying asset. Under this Statement, a lessee is required to recognize a <br />lease liability and an intangible right-to-use lease asset, and a lessor is required to recognize a lease receivable and a <br />deferred inflow of resources, thereby enhancing the relevance and consistency of information about governments’ leasing <br />activities. <br /> <br />Effective Date and Transition <br /> <br />The requirements of this Statement are effective for fiscal years beginning after June 15, 2021, and all reporting periods <br />thereafter. <br /> <br />Leases should be recognized and measured using the facts and circumstances that exist at the beginning of the period of <br />implementation (or, if applied to earlier periods, the beginning of the earliest period restated). However, lessors should no t <br />restate the assets underlying their existing sales-type or direct financing leases. Any residual assets for those leases <br />become the carrying values of the underlying assets. <br /> <br />How the Changes in This Statement Will Improve Accounting and Financial Reporting <br /> <br />This Statement will increase the usefulness of governments’ financial statements by requiring reporting of certain lease <br />liabilities that currently are not reported. It will enhance comparability of financial statements among governments by <br />requiring lessees and lessors to report leases under a single model. This Statement also will enhance the decision - <br />usefulness of the information provided to financial statement users by requiring notes to financial statements related to <br />the timing, significance, and purpose of a government’s leasing arrangements. <br /> <br /> <br /> <br /> <br /> <br /> <br />DRAFT <br />6