GASB 87: A closer look at the new lease accounting standard for the US Public Sector
Start of the SAP Summertime Webinar Series for US state and local government – In Focus: The new RISE with SAP for Modular Cloud ERP offering for Public Sector and how it enables GASB 87 compliance for governments
Holistic government planning, flawless execution, and comprehensive accounting and reporting is crucial to successful governance in the current environment. Greater demand for better socio-economic outcomes and more stringent cost management efforts have become the norm, with state and local governments looking to adapt swiftly to address a myriad of demands from constituents and stakeholders.
SAP’s latest solution innovation for US state and local government, i.e. SAP S/4HANA Public Cloud for State and Local Government (part of SAP’s modular cloud ERP) is an end-to-end Software as a Services offering upon which the entire business of state and local governments can be executed and managed. The solution is delivered as a modular cloud ERP that connects best in class functionalities across the various lines of business in a complete and comprehensive suite. The solution also delivers the potential for rapid value realization that is enabled by deployments of preconfigured scope items for US state and local governments in the business areas of Finance (including Projects and Grants), Human Experience Management, Travel and Expense Management and Purchasing processes. Furthermore, the extensible platform allows for innovation through the adoption of prebuilt industry accelerators for “edge” technologies.
In July and August, SAP hosts a series of interactive webinars that will also be available on demand: Join solution experts from SAP as they explore specific capabilities of SAP’s modular public cloud ERP for state and local government through several webinars, that will enable attendees to further understand the functional scope and solution extensibility to establish a complete business platform. The webcasts cover topics that include public financial administration with lease contract management and outcomes-based budgeting, workforce management to support the workforce of the future, travel management in a post COVID era and data driven insights to reimagine public services
The first webinar focuses on making the new GASB 87 lease accounting regulation a breeze for public financial administration and aims to provide valuable insights into key provisions within the new standard. Our solution specialists will showcase how SAP’s leasing solution supports public financial administrations to comply with the new regulatory requirements and demonstrate the features and functionalities that are specific to GASB 87 compliance.
GASB 87 fundamentally changes lease accounting for government entities
Issued in 2017, GASB statement no. 87, Leases, requires a significant shift in how US public sector organizations manage their leases for fiscal years beginning after June 15, 2021. The new regulations affect almost all US state and local governments, and related GASB reporting organizations that operate as lessees, including certain healthcare, and higher education institutions. State and local governments and associated agencies will need to enable new compliant processes, systems, and controls to address the requirements of GASB 87 in respect of their financial disclosures, and more specifically their balance sheets and income statements.
Essentially, a major accounting loophole related to off-balance sheet operating leases must be addressed, as many agencies report leases off balance sheets and disclose the liabilities as notes in the financial reports, which compromises the accuracy of financial statements. To portray lease obligations accurately and enhance the usefulness of governmental financial statements, GASB 87 requires governmental entities to capitalize all leases (excluding short-term leases or leases that transfers ownership of the underlying asset) and record lease assets and liabilities on the balance sheet.
SAP S/4HANA cloud solutions support governments to become GASB 87 compliant
SAP S/4HANA Cloud can support state and local governments on their transition to enable readiness for GASB 87, by deploying GASB 87 compliant processes at speed. More specifically, the RISE with SAP offering for SAP S/4HANA Cloud is a service that enables full integration into financial accounting and reporting applications, including lease contract management, procure-to-pay and compliant lease accounting frameworks (depicted in the diagram below).
SAP Contract and Lease Management: a leasing solution that is natively integrated with SAP S/4HANA Finance, Source: SAP
Join the GASB 87 expert session
Sign up for the Summertime Webinar Series hosted by SAP and hear from our industry experts how a modular cloud ERP built on SAP HANA can address modern ERP needs for US state and local authorities. Episode 1 of the series helps you understand how SAP’s leasing solution supports public financial administrations to comply with the new GASB 87 regulation.
Regardless of which level of GASB 87 implementation you are – whether your organization has taken initial steps toward implementation, or is actively putting a plan in place – share with us your feedback, concerns or questions we are sure are out there.
Find the full webcast series for US government agencies here:
- Make GASB 87 a breeze for your public financial administration
- Planning and reporting priority driven budgeting: Outcome based budgeting with SAP and Sierra Digital
- Future workforce: Innovative solutions that support the workplaces and workforces of the future
- External workforce in public sector: Contingent workers and service providers management done right
- Creating cities of the future: How data-driven innovations help re-imagine public services
- Return to travel
- Treasury: Public finance with SAP – Debt and investment strategy
To learn more about SAP S/4HANA Cloud for US state and local government, visit https://www.sap.com/industries/state-local-government.html.