GASB 87: lessor accounting with building lease example

GASB 87: lessor accounting with building lease example

This podcast, originally recorded in March 2019, states an outdated effective date. In May 2020, the Governmental Accounting Standards Board (GASB) postponed the effective date. GASB 87 is now effective for fiscal years beginning after June 15, 2021.

Authored by Susannah Filipovic

GASB 87 leases series: podcast 3

Governmental Accounting Standards Board (GASB) Statement No. 87 will alter accounting rules and financial reporting requirements for how governmental entities report on leases. The lessor accounting perspective is unpacked in this Baker Tilly podcast presented by our public sector practice.

GASB 87 is effective for fiscal years beginning after June 15, 2021. It is important for local and state governments, municipal utilities and other public sector entities to understand now how the GASB 87 changes to lease reporting will impact a lessor’s initiation of a lease and its subsequent recognition and measurement – for both assets and deferred inflow.

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In addition to the overview on lessor accounting, governmental lessors will also walk through an example of a building lease featuring crucial components of GASB 87 lease reporting:

  • Identifying the lease term under GASB 87
  • Assumptions for lease liability calculation
  • Revenue amortization methods including annualized receipt schedule and straight-line lease revenue recognition
  • Initial and annualized year journal entries for government funds, entity-wide statements and enterprise funds
  • Disclosures required when a lease term ends and grouping options

For more information on this topic, or to learn how Baker Tilly public sector specialists can help, contact our team.

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