Government Reporting Entity
Related terms
Category
GASB 87/96
A government reporting entity is a state or local government, public university, school district, or other governmental body that reports financial statements under GASB standards. These entities must comply with GASB 87 for leases and GASB 96 for subscription-based IT arrangements, not ASC 842 or IFRS 16, which apply only to private-sector entities.
Why it matters
Government reporting entities face unique lease accounting challenges. Their leases often include fiscal funding clauses (allowing termination if the legislature does not appropriate funds), appropriation-dependent terms, and intergovernmental agreements. GASB 87 requires analyzing whether fiscal funding clauses are exercisable, a judgment that determines the lease term and, consequently, the liability amount. Many government entities also maintain large fleets and facility portfolios that dwarf private-sector lease counts.
How Arvexi handles this
Arvexi supports government reporting entities with GASB 87 and GASB 96 compliance alongside ASC 842 and IFRS 16. The platform handles fiscal funding clause analysis, government-specific lease structures, and the unique presentation requirements of government financial statements, including the statement of net position and changes in net position.