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Glenn Hegar  ·  Texas Comptroller of Public Accounts

Reporting Requirements for Annual Financial Reports of State Agencies and Universities

Notes & Samples

NOTE 8 – Leases

How leases are classified depends on the standpoint of the lessee or lessor.

From the standpoint of the lessee, leases are classified as either:

  • Operating
  • Capital

Lessees disclose information on operating leases and capital leases in Note 8. For more information, see Capital Leases, Operating Leases and Master Lease Purchase Program, respectively.

From the standpoint of the lessor, leases are classified as either:

  • Sales-type
  • Direct financing
  • Leveraged
  • Operating

Lessors disclose sales-type, direct financing and operating lease information in Note 8 when leasing (exclusive of leveraged leasing) is a significant part of the lessor’s activities. For information on disclosure requirements for lessors, see Leveraged Leases and Accounting and Reporting by Lessors.

Submit a copy of the agency’s Note 8 from its published AFR. The required format is a Microsoft Word document with the header information (agency name/number and note name/number) sent as an attachment to frs@cpa.texas.gov.

Glenn Hegar
Texas Comptroller of Public Accounts
Questions? Contact statewide.accounting@cpa.texas.gov
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