Note X – Leases (Lessees)

Note X – Leases (Lessees)

Note X – Leases (Lessees)

A template for this note is not available. See “Instructions to preparer:” for disclosures that may be required.

Instructions to preparer:

A lessee (i.e., renter) should disclose the following about its lease activities (which may be grouped for purposes of disclosure), other than short-term leases (leases that have a maximum possible term of less than one year):

To “group” leases, consider logical groupings such as lease type (land, buildings, equipment, etc.), lease term (5-10-25+ years), vendor (if leasing various things from a single vendor), etc.

1. A general description of its leasing arrangements, such as the assets leased, terms of the leases, the amount of the monthly (quarterly/annual) payments, cancellation clauses, significant commitments before the start of the lease, changes in lease term for previously reported leases, etc.

Examples:

During the year ended (fiscal year end), the (city/county/district) adopted guidance for the presentation and disclosure of leases, as required by the BARS manual. This requirement resulted in the addition of a lease liability reported on the Schedule of Liabilities.

The (city/county/district) leases land and buildings from the State for $500 per month under lease agreements that range from 10 to 20 years. The leases began in January of 2015 and will end December of 2035 and include options to cancel after the first 10 years.

The (city/county/district) leases vehicles from the County motor pool for $200 per month under 5-year lease agreements with rotating end dates. In addition, the (city/county/district) pays $300 per month under a 50-year lease with the State for storage space. This lease can be cancelled by us with 1-year's notice.

The (city/county/district) leases 30 copiers from Office Min for $500 per month under 3-year lease agreements that can be cancelled with 90-days' notice and severe penalties.

2. The total amount paid for leases in the current reporting period and future lease payments for each of the five subsequent years and in five-year increments thereafter.

Example:

The total amount paid for leases in 2020 was $6,000. As of December 31, 2020, the future lease payments are as follows: