The AICPA State and Local Government Expert Panel (SLGEP) and the AICPA Private Companies Practice Section Technical Issues Committee (TIC)* recently submitted comments to the Governmental Accounting Standards Board (GASB) on its Exposure Draft (ED), Implementation Guide-Leases.
The ED presents 80 new questions addressing GASB Statement No. 87, Leases, as well a nonauthoritative appendix with illustrations of lessee accounting and financial reporting.
In its April 30, 2019 letter, SLGEP requested that GASB provide additional clarifications for considering cell phone tower and antennae placement agreements as leases. These agreements vary tremendously and may not include important lease components such as the right to use the land or the connection point. SLGEP also requested clarification on the appropriate guidance for leases with variable payments.
TIC’s April 30, 2019 letter recommended that GASB consider adding additional guidance to clarify issues related to below-market leases, triggers for meeting the control criteria, easements, cell phone tower leases, determining the likelihood of a bargain purchase exercise, lease terms when renewal options are silent and look-back provisions related to transition, among other issues.
* Note: One of TIC’s objectives is to speak on behalf of small and medium-sized firms, although TIC’s comments do not necessarily reflect the AICPA’s positions.