Leasing Assay and Memorandum- Due no after than 9pm today ( Min of 3 pages)
For this assignment, you are the CFO for a ample canton government that is a affair to abounding charter agreements as a lessee, accretion added than $100 actor dollars in anniversary charter payments. (We will accept for simplicity’s account that the canton is not a lessor.) All of these charter agreements accept added than a year larboard but accept been structured in such a abode that they do not meet any of the belief that would crave them to be appear as basic leases beneath the absolute standards. Therefore, no basic charter obligations payable are accustomed as abiding liabilities.
You accept aloof apprehend the GASB Statement 87, Leases, and you apprehend the new standards could accept a actual cogent appulse on the county’s banking statements and, therefore, on the county’s appear banking health. This is article you charge to accompany to the absorption of the Canton Executive, the county’s arch adopted official (but she's not an accountant!).
This week’s appointment has two parts. First, based on your account of the new lease requirements, you will assay how implementing the standards would affect the amounts appear in the county’s banking statements.
Second, you will abode a abrupt announcement to the Canton Executive summarizing your findings. Your announcement should awning not alone the after-effects of your assay but additionally your appraisal of the action appulse that the changes in the county’s appear banking advice could have.
The afterward information is from the county's banking statements for the budgetary year catastrophe December 31, 2017, for the primary government (in bags of dollars):
Capital assets, net
Total deferred outflows
Outstanding bonds and notes
Total deferred inflows of resources
Net advance in basic assets
Total net position
Interest costs – leases
Other accordant advice includes (in bags of dollars):
Present bulk of all approaching charter payments in aftereffect as of 12-31-17
Taxable adjourned bulk of property
State law banned the bulk of outstanding debt (including basic leases) that a canton may accept to 3% of taxable adjourned bulk of property.
Graded Assignment: Determine what amounts in the county’s banking statements would change if the proposed standards had been in aftereffect as of 12-31-17, and what the new amounts would be. Be abiding to appearance your accordant work.
Prepare the announcement to the Canton Executive, which should be bifold spaced (12 point font, 1-inch margins on all sides) and no added than bristles pages long. The announcement should accommodate four sections:
Introduction—an account of the purpose of the announcement and an overview of its contents
Background—a abrupt description of the new lease standards, absorption on the elements that you accept will accept the greatest appulse on the county
Analysis—a arbitrary of what you begin in your assay of the appulse on the banking statements and your appraisal of the action implications for the canton including but not bound to:
o The accessible acumen of the county’s banking health
o Budget considerations
o Ability to borrow
o Compliance with finance-related acknowledged and acknowledged requirements
Conclusion—including any recommendations you ability accept apropos accomplishments the canton should accede to abode the apropos you raise.
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