Regulated Leases
Category
GASB 87/96
Regulated leases are lease arrangements involving assets subject to regulatory oversight, such as utility infrastructure, telecom equipment, or transportation assets. Both ASC 842 and GASB standards provide specific guidance for regulated entities, particularly rate-regulated utilities that recover lease costs through customer rates set by a regulatory body.
Why it matters
Regulated entities face unique lease accounting challenges because their cost recovery is determined by regulators, not market forces. A utility that leases generating equipment may defer or accelerate lease cost recognition based on regulatory rate orders. GASB 62 provides guidance on regulatory accounting that interacts with GASB 87 lease recognition. The intersection of lease accounting standards and regulatory accounting creates complexity that generic lease software often cannot handle.
How Arvexi handles this
Arvexi supports the lease accounting requirements of regulated entities, including the ability to track regulatory assets and liabilities arising from timing differences between lease expense recognition and regulatory cost recovery. The platform maintains parallel calculations for book and regulatory purposes.