Title
Auditor-Controller's Office recommending the Board approve and authorize the Chair to sign the attached budget transfer that recognizes long-term debt proceeds along with an equal increase in capital expenditure appropriations to comply with the requirements of GASB 87 and GASB 96 (4/5 vote required).
FUNDING: Countywide.
Body
DISCUSSION / BACKGROUND
With the implementation of GASB 87 (Leases) in Fiscal Year 2021-22 and GASB 96 (Subscription-Based Information Technology Arrangements) in FY 2022-23, the County is required to change the way it accounts for certain leases and software subscriptions. The GASB now considers these transactions in substance as the purchase of capital assets and the issuance of debt. Accordingly, these qualifying leases and software subscriptions require recognition of revenues as if the County had entered into a loan agreement to finance these acquisitions as well as the recognition of a capital expenditure per GAAP.
ALTERNATIVES
N/A
PRIOR BOARD ACTION
N/A
OTHER DEPARTMENT / AGENCY INVOLVEMENT
N/A
CAO RECOMMENDATION / COMMENTS
Approve as recommended.
FINANCIAL IMPACT
The net impact to the budget will be zero.
CLERK OF THE BOARD FOLLOW UP ACTIONS
Obtain the Chair’s signature on the attached budget transfer and forward it to the Chief Administrative Office for processing.
STRATEGIC PLAN COMPONENT
N/A
CONTACT
Joe Harn