To assist NC local governments with implementing Governmental Accounting Standards Board (GASB) Statement No. 87, Leases (GASB 87), the North Carolina State and Local Government Finance Division (SLGFD) has issued Memorandum 2021-05, Memorandum 2021-09, and Memorandum 2022-09. SLGFD has also developed two GASB 87 Templates that will help local governments perform their GASB 87 calculations and post various transactions in the general ledger. SLGFD is providing frequently asked questions and answers as an additional resource for NC local governments to use in conjunction with the aforementioned resources as the governments implement GASB 87.
In particular, our staff has received multiple questions in regards to when units fail to budget an appropriation and an other financing source during the implementation of GASB 87. Question 13 addresses this with the following:
| “At the implementation of GASB 87, governments will need to budget for the remaining amounts of their outstanding leases as if they had just entered the agreements. Failure to amend the budget for the remainder of existing leases at implementation is technically a budget violation. This specific budget violation occurring during the year of implementation will not be required to be addressed by the Council/Board as a financial performance indicator of concern. A unit does have the option to show a reconciling item on the budget to actual schedules for capital lease proceeds and payments related to GASB 87 leases. A footnote to explain that the reconciling item is due to the implementation of GASB 87 would be necessary. “ |