Reporting Requirements for Annual Financial Reports of State Agencies and Universities

Notes & Samples

NOTE 8 – Leases/SBITAs
Sample (Illustrative, may not tie to exhibits)

Leases

Lease Liability

Included in the expenditures reported in the financial statements are the following amounts of lease rent paid or due under the noncancelable lease liability:

Fiscal 20CY

Note: Agencies must also provide a table for any component units.
Important: Enter all amounts in dollars and cents.

Sample Agency entered various leases for land, buildings, vehicles and equipment. These agreements range in terms up to 2032. In fiscal 20CY, the total lease payments were $3.4 million.

Variable payments based upon the use of the underlying asset are not included in the lease liability because they are not fixed in substance — therefore, these payments are not included in the RTU assets or lease liabilities. Sample Agency had variable payments in the amount of $1.4 million.

Sample Agency entered additional leases that have not yet commenced as of Aug. 31, 20CY, including leases for vehicles and equipment. The terms range is 2024 — 2031 with a future commitment of $2.8 million.

Sample Agency has a lease-leaseback arrangement with a contractor to build a new building. The contractor leases the land and the building back to Sample Agency. This lease arrangement is in place until 2045.

Future Lease Payments
Year Ended Aug. 31, 20CY

Lease Income

Included in the revenues reported in the financial statements are the following amounts of rental income received under noncancelable leases of buildings, equipment and land leased to outside parties.

Fiscal 20CY

Sample Agency entered into agreements to lease (as lessor) certain buildings and equipment to outside third parties. The agreements have lease terms that expire in various years through year 2035. In fiscal 20CY, the total RTU lease income was 22.3 million.

Sample Agency entered some leases that call for variable payments — therefore, they were not included in lease receivables or deferred inflow of resources. Sample Agency recognized a total of $1.3 million as revenue from these variable payments for the year ended Aug. 31, 20CY.

Sample Agency subleases certain portions of RTU buildings to third parties. The net value of the subleased RTU buildings is $3.5 million. These sublease arrangements result in lease receivables of $2.6 million. There are no residual value guarantees as part of the sublease agreements.

Future Lease Income
Year Ended Aug. 31, 20CY

Regulated Leases

For certain lease arrangements related to airport gates and aprons, specific terms are regulated by the Federal Aviation Administration (FAA). Sample Agency entered into various lease agreements to grant the right to use these airport gates and aprons to third parties. The lease revenue related to these regulated leases amounted to $2.6 million for the year ended Aug. 31, 20CY.

SBITAs

Subscription Liability

Included in the expenditures reported in the financial statements are the following amounts of subscription fees paid under the noncancelable liability:

Fiscal 20CY

Sample Agency entered various agreements for IT subscriptions. These agreements range in terms up to year 2032. In fiscal 20CY, the total lease payments were $2.8 million.

Variable payments based upon the use of the underlying IT asset are not included in the subscription liability because they are not fixed in substance — therefore, these payments are not included in the RTU assets or subscription liabilities. Sample Agency had variable payments in the amount of $1.5 million.

Sample Agency entered additional subscription agreements that have not yet commenced as of Aug. 31, 20CY. The terms range is 2024—2031 with a future commitment of $2.5 million.

Future Subscription Payments
Year Ended Aug. 31, 20CY