>> Publications

Reporting Requirements for Annual Financial Reports of State Agencies and Universities

Table of Contents

Reporting Requirements for Annual Financial Reports of State Agencies and Universities

Capital Assets

Leased Property

Per GASB 62 paragraph 213, a capital lease must meet one or more of the following criteria:

In addition to the above criteria, the cost of the underlying leased asset must meet the standard capitalization thresholds in order to record the lease as a capital lease. If a lease does not meet any of the above criteria or if the cost of the underlying leased assets does not meet the standard capitalization threshold, record the lease as an operating lease.

For more information, see Capital Leases.

Reclassifying Expenditures to Capital Leases

If any expenditure related to capital leases needs to be capitalized at fiscal year-end, process adjusting journal entries to reclassify expenditures to capital leases using the following T-codes.

Seq No Batch Type Doc Type Eff Date Fin Agy TC AY PCA COBJ Amount R Fund Input GL
To Increase Capital Outlay Expenditure
(1) 5 U 0832CY XXX 632 CY 99999 XXXX* $ XX.XX   XXXX 9999
To Reduce the Other Expenditure Accounts Used
(2) 5 U 0832CY XXX 633 CY 99999 XXXX $ XX.XX   XXXX 9999
*Use the capital outlay COBJ under the capital lease asset category.

Accounting effect of above entries:

Debit Credit
(1) To Increase Capital Outlay Expenditure    
  5600 GAAP Expenditure Offset $ XX.XX  
  9999 System Clearing   $ XX.XX
(2) To Reduce the Other Expenditure Accounts Used    
  9999 System Clearing $ XX.XX  
  5600 GAAP Expenditure Offset   $ XX.XX

Verify that capital outlay activity in governmental funds and basis conversion funds net to zero at the GAAP source/object level using the DR206 — Review Govt-Wide Basis Conversion report located in the FMQuery–SIRS AFR Desk Review menu.