A lessee under GASB 87 and a government with a subscription-based IT arrangement under GASB 96 recognise a liability and an intangible right-to-use asset, measured from the present value of the payments, amortised straight line over the term, and, from fiscal years beginning after 15 June 2025, shown separately in the capital-asset note under GASB 104.
Two intangible right-to-use assets that live in the capital-asset register.
GASB Statement 87 requires a lessee to recognise a lease liability and an intangible right-to-use lease asset at the start of a lease longer than twelve months; Statement 96 does the same for a subscription-based information technology arrangement, the cloud software contracts every government now has. Both assets are capital assets: they are amortised, they appear in the capital-asset roll-forward, and from fiscal years beginning after 15 June 2025 Statement 104 requires them to be shown as their own lines in the note. A register that already holds buildings, vehicles and equipment by fund and function is the right place for them; a spreadsheet beside the register is where the amortisation and the disclosure drift apart.
| Item | Lease asset (Statement 87) | Subscription asset (Statement 96) |
|---|---|---|
| Initial measurement | Lease liability, plus payments made at or before commencement, plus initial direct costs necessary to place the asset in service | Subscription liability, plus payments made before commencement, plus capitalisable implementation costs |
| Implementation costs | Not applicable | Preliminary project stage expensed; initial implementation stage (configuration, data conversion, testing) capitalised; operation and additional implementation stage generally expensed |
| Amortisation | Straight line over the shorter of the lease term and the useful life of the underlying asset | Straight line over the subscription term |
| Exclusion | Short-term leases: maximum possible term of 12 months or less, including options | Short-term subscriptions on the same 12-month test |
| Term | The noncancellable period plus periods covered by options the government is reasonably certain to exercise | The same construction |
| Note disclosure under Statement 104 | Shown separately within the capital-asset note from fiscal years beginning after 15 June 2025 | Shown separately within the capital-asset note from the same date |
What is different about them.
The asset's cost is not an invoice; it is the present value of the payments over the term, discounted at the rate the lessor charges or the government's incremental borrowing rate, plus the amounts above. The term is a judgement about options, revisited when circumstances change. A remeasurement of the liability (a change in term, in payments, or in the rate for certain reasons) changes the asset. Amortisation is straight line by rule. None of this is depreciation in the MACRS sense, and none of it has a tax book; the register holds a book basis and, for a government, the fund and function tags that put the amortisation in the right column of the statement of activities.
| Asset | Description | Class | Location | In service | Cost | NBV, federal | Status |
|---|---|---|---|---|---|---|---|
| 10120 | Nonresidential improvement, Bldg 2 | Buildings and improvements | Plant 1 | 06/2019 | 312,000.00 | 251,662.32 | In service |
| 10412 | Vertical machining center | Machinery and equipment | Plant 1 / Cell 4 | 05/2023 | 148,500.00 | 46,391.40 | In service |
| 10577 | Delivery van, unit 7 | Vehicles | Fleet | 09/2024 | 58,900.00 | 16,963.20 | In service |
| 10603 | Warehouse racking, aisle 3 | Furniture and fixtures | Warehouse | 01/2025 | 24,300.00 | 14,876.46 | In service |
| 10688 | Server cluster | Computer equipment | HQ / IT | 03/2026 | 41,200.00 | 0.00 | In service |
| 10701 | Line 2 conveyor upgrade | CIP | Plant 2 | 86,410.00 | 86,410.00 | In progress | |
| 09877 | Forklift, unit 3 | Machinery and equipment | Warehouse | 04/2018 | 31,750.00 | 0.00 | Fully depreciated |
The Statement 104 line is a class in the register.
Statement 104 asks for lease assets, subscription assets and other intangibles by major class, separately from the tangible classes. If the register carries "Lease assets" and "Subscription assets" as classes, the capital-asset note is a report; if it carries them as memo items, the note is a reconciliation. The government page describes the register the note is built from.
What to record on the asset.
- The contract, the commencement date, the noncancellable term and the options assessed as reasonably certain.
- The discount rate and the payment schedule, so the liability and the asset can be remeasured.
- For a subscription, the implementation costs by stage, with the capitalised amount.
- The class (lease asset or subscription asset), the fund and the function.
- The amortisation schedule and any remeasurement, with the reason.
In Fixed Asset Desk: lease and subscription assets are classes with their terms and payment schedules, amortised over the term, and the roll-forward by class shows them on their own lines.
Sources: GASB Statement No. 87 (Leases); GASB Statement No. 96 (Subscription-Based Information Technology Arrangements); GASB Statement No. 104 (Disclosure of Certain Capital Assets); GASB Implementation Guide 2019-3 and 2023-1. Checked 20 September 2026.