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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
Operating Leases

If a lease does not meet the definition of a capital lease, classify the agreement as an operating lease.

Recognize rental expenditures as they become payable. The following disclosures are required for agencies participating in operating leases.

Operating Lease Obligations – Present the expenditures reported in the financial statements (as well as future minimum lease rental payments) under noncancelable operating leases. Per GASB 66, lease obligations that vary from a straight-line basis can use the fair value method if there are scheduled rent increases. Include the following amounts of rent paid or due under operating lease obligations in the expenditures or expenses reported in the financial statements:

  • General leasing arrangements.
  • Future minimum rental payments for each of the five subsequent years and in five-year increments thereafter (applicable only for noncancelable leases of more than one year). If minimum rental payment is zero before year five, include zero for those years to complete five year presentation.
  • Future minimum noncancelable sublease rentals.
  • Current year costs reported in the financial statements for rents paid or due under operating leases with separate amounts for minimum rentals, contingent rentals and sublease rentals.

Operating Lease Rentals – Present the revenues reported in the financial statements (as well as future minimum lease rentals) under noncancelable operating leases. Per GASB 66, lease obligations that vary from a straight-line basis can use the fair value method if there are scheduled rent increases. Include the following amounts of rent received or due under operating leases rentals in the revenues reported in the financial statements:

  • General leasing arrangements.
  • Cost and carrying amounts of leased assets by major asset class and accumulated depreciation in total.
  • Future minimum rentals for noncancelable leases in five-year increments and in total thereafter. If minimum rental payment is zero before year five, include zero for those years to complete five year presentation.
  • Total contingent rentals for the period.

Per GASB 62, if the enterprise fund/business-type activity has retail land sales operations, disclose ALL of the following:

  • Maturities of accounts receivable for each of the five years following the date of the financial statements
  • Delinquent accounts receivable and the method(s) for determining delinquency
  • Weighted average and range of stated interest rates of receivables
  • Estimated total costs and dates of outlays for improvements for major areas from which sales are made over each of the five years following the financial statement’s date
  • Recorded obligations for improvements
Glenn Hegar
Texas Comptroller of Public Accounts
Questions? Contact statewide.accounting@cpa.texas.gov
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