The new GASB standard on leases will become effective for the UW for our fiscal year beginning July 1, 2020. In simple terms, the new lease standard requires that we record a lease right-to-use asset and a related lease liability on our balance sheet for significantly all material lease contracts that have a lease term exceeding 12 months.
One of the requirements of the new standard is that we account for certain arrangements that may not at first appear to be lease contracts but are in fact categorized as embedded leases under the new guidance. A common example of an embedded lease is an arrangement under which an organization is provided a piece of equipment (or is granted the right to use a specified piece of equipment) for “free” that comes with an obligation to purchase supplies, materials or services from the vendor that provided the equipment.
If your department has any equipment or other assets (or has been granted the right to use a specified piece of equipment or other asset) that you received at no cost or for which you pay little or no rent under an arrangement that requires the purchase of supplies, materials or services can you please provide details to Financial Reporting at the email addresses below? Please also feel free to reach out to Stephen Brady and John Evans if you have any questions or require additional information.
Stephen Brady: sjbrady@uw.edu
John Evans: jevans7@uw.edu