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AIC.COG AND. AUDITING UPDATES The following.is. a summary bfGovernmental Accounting: Standards Board (GASB) standards expected to be implemented in the.next fewyears. Due to the COV1D49:pandemic, the GA:SB has delayed the original implementation dates ofthese -and other standards as described below. GASB Statement No. 87, Lenses Mew- is.a contract that transfers control of the right .to use another entity's: nonfrnancial .asset as specified in xhe conttact for a period -of dme.iri aIi*dXdhaage or exchange -like transaction. Examples of nonfrnandil. assets include buildings; land, vehicles, and equipment. Any..contract that meets Ihis-deitttition should .be, accounted for -under the leases guidance, unless. specifically exclttded.itt this statement. Governments.enterinto leases for many types ofassets.*Under the previous guidance; leases were classified. as. either capital of operating depending. on whethdr the lease'met any ofthe .four tests: In many eases, the previous guidance resulted in reporting lease transactions differently than similar nonlease. financing transactions. The .goat of this statement: is to better meet tie inforrnatioo needs of users by improving accounting and financial reporting for leases by governments.. it establishes a singWitiodel for lease.accounting based on the principle that leases are financingsof the right to use an underlying asset: This statement increases the usefulness of financial statements by requiring recognition of certain lease assets and liabilities, for leases that previously were classified as operating leases and recognized as inflows of resources or outflows of re.sources..based.on the payment. provisions of the contract: Under this. statement, a lessee is required to recognize a lease liability and an intangible right to use lease asset, and a lessor .is required to recognize .a lease receivable and a deferred inflow of resources, thereby enhancing the relevance and consistency of information about governments' leasing activities. To reduce ftcost of implementation, this statement: ineludes.an exception:for short-term leases;.defined as a lease that, at tlie.commencement of the lease term, has -a maximum possible term under the. lease Contract of 12 months (or less); inefuding, any options to extend, regardless of their probability of being exercised. Lessees and. lessors shoirid recognize short-term lease payments as outflows of resources. or inflows of resources; respectively., based on the payment.provisions of the lease contract. The.requir{ements of this statetrtent are offective.for reporting periods beginning after June 1.5, 2021. -19..