What is Lease accounting for governments?
In short
Governments use a single lease model: a lessee recognizes a lease liability and an intangible right-to-use asset, and a lessor recognizes a lease receivable and a deferred inflow of resources while keeping the asset.
Key takeaways
- There is no separate operating lease category for governments.
- Leases with a maximum possible term of 12 months or less are exempt.
- In governmental funds, the lessee reports an expenditure and an other financing source when the lease begins.
Where it's tested
FAR: Governmental Accounting — study notes, a five-minute revision sheet and practice questions.
Practise: 3 questions
Question 1 of 3 · 0 answered
Governmental funds use which measurement focus and basis of accounting?