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Reporting Requirements for Annual Financial Reports of State Agencies and Universities

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Reporting Requirements for Annual Financial Reports of State Agencies and Universities

Universities

Leases/SBITAs Thresholds

Leases (GASB 87)

The Comptroller’s office has established $100,000 as the minimum threshold amount for leases capitalization. Lease agreements must be capitalized if the net present value of future lease payment per unit exceeds this threshold.

For example: a 36-month lease with a monthly payment of $5,000, assuming a 4% interest rate would have a net present value of $169,350. If the lease is for a single piece of equipment, then it exceeds the threshold and must be capitalized.

Another example: a different lease with the same net present value of future payments $169,350 for 50 laptop computers does not meet the capitalization threshold since the per unit value does not exceed $100,000 ($169,350/50 laptop units = $3,387).

SBITAs (GASB 96)

The Comptroller’s office has established $500,000 as the minimum threshold amount for subscription-based information technology arrangement (SBITA) contract capitalization. SBITA agreements must be capitalized if the net present value of future subscription payments per contract exceeds this threshold.

For example: a 60-month subscription with a monthly payment of $10,000, assuming a 3.8% interest rate, has a net present value of $547,322. If the contract is for a single subscription, then it exceeds the threshold and must be capitalized.