Policy 798 - Lease Asset Policy

I. PURPOSE

The purpose of this policy is to provide for the development and maintenance of an inventory of leased assets by the school district and the establishment and maintenance of a leased asset accounting system.

II. GENERAL STATEMENT OF POLICY

The policy of this school district is that a leased asset accounting system and inventory of leased assets be developed and maintained.

III. DEVELOPMENT OF INVENTORY AND ACCOUNTING SYSTEM

The superintendent or such other school official as designated by the superintendent or the school board shall be responsible for the development and maintenance of an inventory of the leased asset of the school district, and for the establishment and maintenance of a formal leased asset accounting system. The accounting system shall be operated in compliance with the applicable provisions of the Uniform Financial Accounting and Reporting Standards for Minnesota School Districts (UFARS)and GASB statements. The inventory shall specify the location of all leased assets.

IV. CAPITALIZATION

District will capitalize any leases that have a present value of $7,000 or more at the commencement date of the lease or the implementation date of the GASB statement. This threshold will apply to leases of capital assets; including buildings, land, and equipment where the District is a Lessor or a Lessee.

V. INTEREST RATE

Unless otherwise noted in the lease agreement, the interest rate used to calculate the present value of the lease payments should be the District’s incremental borrowing rate at the commencement of the lease.

VI. REPORT

The administration shall annually update the lease records of the school district.
 

Adopted: September 20, 2022