The Governmental Accounting Standards Board (GASB) Statement No. 87, Leases, establishes a single model for lease accounting based on the principle that leases are financings of the right to use an asset. There is no longer an operating vs capital classification. Lessees will recognize a lease liability and an intangible right-to-use asset, and lessors will recognize a lease receivable and a deferred inflow of resources.

GASB 87 is effective for fiscal year 2022, and applies to leases of capital assets—including buildings, land, and equipment. In addition, GASB has issued an exposure draft that would expand the requirements to subscription-based information technology arrangements.

Implementing GASB 87

Beginning in October 2021, agencies must record all leases within the scope of GASB 87 that exceed the capitalization threshold ($500,000 in total lease payments over the lease term) in the Facilities Portfolio Management Tool (FPMT). We are modifying FPMT to assist the state with complying with GASB 87 and to send accounting transactions to AFRS. This Lease Data Matrix shows the accounting and FPMT data entry requirements for leases after implementation.

For more information on the project, the timeline, and how to prepare for the changes review the following:

• Overview and steps to prepare
• Q&A on implementing GASB 87
• E-learning: GASB 87 Overview and Scope

Facilities Portfolio Management Tool

FPMT is currently used to track state-owned and leased facilities for the Annual State Facilities Inventory Report and the Six-Year Facilities Plan. By using a single system for multiple business purposes, we will reduce data entry and increase data accuracy. We are adding the following functionality:

• Track owned and leased land, leases of other assets such as equipment and vehicles, and software subscriptions.
• Track receivable leases (state is lessor) for land and other assets, and for facilities leased to a non-state agency.
• Send lease accounting transactions to AFRS, including lease payments.
• Produce reports for reconciliation to AFRS, recording entries manually, and financial statement disclosures.
• Separate accounting and facilities roles.

Lease Data Fields in FPMT

The spreadsheets below list the FPMT data fields (attributes) for the various types of leases, beginning October 2021:

• Facilities Leases
• Land Leases 
• Other Asset Leases
• Receivable Facility Leases (state is lessor)
• Receivable Land Leases (state is lessor)
• Receivable Other Asset Leases (state is lessor)

Note: The information in these spreadsheets is subject to change as we are still configuring the system.

Resources

OFM Guides and Resources

• Lease Accounting Decision Tree – DRAFT
• GASB 87 Scope
• Lease Payments – How to record each type

GASB Literature and Resources

• GASB Statement No. 87, Leases
• GASB Implementation Guide No. 2019-3, Leases
• GASB Statement No. 96, Subscription-Based Information Technology Arrangements
• GASB Statement No. 95, Postponement of the Effective Dates of Certain Authoritative Guidance

Questions

If you have questions or comments, please contact Anna Quichocho at anna.quichocho@ofm.wa.gov or 360-725-0187.