SFFAS 54 LEASE GUIDANCE:

RIGHT-TO-USE LEASES:

DEEMED “CAPITAL LEASES” FOR BUDGETARY TREATMENT

EFFECTIVE FISCAL YEAR 2024

PREPARED BY:

GENERAL LEDGER AND ADVISORY BRANCH

BUREAU OF THE FISCAL SERVICE

U.S. DEPARTMENT OF THE TREASURY
Version 

Number

Date Description of Change Effective USSGL TFM

1.0 01/2023 Original TFM Bulletin No. 2023-03
RIGHT-TO-USE LEASES GUIDANCE: BUDGETARY CAPITAL

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Proprietary Accounting Requirements & Agency Decision Points

SFFAS No. 54, Leases, as amended by SFFAS No. 58 and SFFAS No. 60, replaces proprietary lease accounting and disclosure standards for general 

purpose federal financial reports. SFFAS No. 54 is effective for reporting periods beginning after September 30, 2023. (Early implementation is not 

permitted.)

A lease is defined as “a contract or agreement whereby one entity (lessor) conveys the right to control the use of PP&E (the underlying asset) to another 

entity (lessee) for a period of time as specified in the contract or agreement in exchange for consideration.” (SFFAS 54, Par. 6.) SFFAS No. 54 requires 

that federal lessees recognize a lease liability and a right-to-use lease asset (also referred to as a lease asset), and that federal lessors recognize a lease 

receivable and unearned revenues at the commencement of the lease term, unless the lease meets the definitional criteria of a short-term lease, contract 

or agreement that transfers ownership, or an intra-governmental lease.

For proprietary accounting, entity management is responsible for exercising professional judgement and collaborating within its agency to reach 

certain determinations before establishing proprietary accounting treatment, including:

1) Lease Term, with consideration for Options, Renewals/Terminations, and Cancellation Clauses; 

2) Calculation of Lease Asset/Liability; with consideration for Fixed vs. Variable Payments;

3) Interest Rates - Amortization of Discount on Lease Liability/Receivable; and

4) Modifications, Terminations, and any respective remeasurements.

Proprietary Lease Term 

For proprietary accounting, calculating the lease term is pivotal because the classification between short-term leases and right-to-use leases depends 

on the lease duration. The lease term is determined to be the noncancelable lease period, plus certain periods subject to options to extend or terminate 

the lease. The noncancelable period is the shorter of the period agreed upon in the lease contract that: (1) precedes any option to extend the lease; or 

(2) precedes the first option to terminate the lease. In addition, the lessee’s lease term should include the noncancelable period, along with periods:

• Involving an option to extend the lease, if it is probable that the lessee or lessor will exercise that option (SFFAS 54, Par. 15a & 15c)

• Following an option to terminate the lease, if it is probable that the lessee or lessor will not exercise that option (SFFAS 54, Par. 15b & 15d)

Some specific provisions may also need to be applied when determining the lease term:

• Periods for which the lessee/lessor (1) have an option to terminate the lease without permission from the other entity, or (2) have to agree to 

extend, are considered to be cancelable periods and are thus excluded from the lease term (SFFAS 54, Par. 19a.)

• An availability of funds/cancellation clause allowing lessees to cancel a lease agreement if funds for the lease payments are not appropriated

should only affect the lease term when it is probable that the clause will be exercised (SFFAS 54, Par. 19c.)

• If a lessee has the option to purchase the underlying asset during the lease term and the contract is not a contract that transfers ownership, the 

lease term should exclude the period, after the date at which the option is probable of being exercised (SFFAS 61, Par. 19d.)
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Calculating the Lease Asset/Lease Liability Amounts: Fixed vs. Variable Payments

The Lessee’s lease asset and the Lessor’s lease liability should include the present value of payments expected to be made during the lease term. 

Generally, these should include:

• Fixed payments;

• Variable payments that depend on an index or a rate;

• Variable payments that are fixed in-substance; and

• Any lease incentives receivable from the lessor.

For a complete list of payment types to include in the present value of payments, please see SFFAS 54, Paragraphs 40 and 56. (SFFAS 54, Par. 49 also 

identifies costs that are to be capitalized as part of Lessor’s lease asset that are not components of a Lessee’s lease liability.)

Variable payments based on future performance of the lessee or usage of the underlying asset should be recognized as lease expense/revenue during

the reporting period to which those payments relate. These variable payments should not be included in the measurement of the lease receivable/lease 

liability. (See SFFAS 54, Pars. 41 and 54.) Reporting entity management should consult with appropriate procurement officials, and use professional 

judgment, to make determinations on what payments are fixed and what are variable for proprietary lease accounting purposes.

Amortization of Discount on Lease Liability/Receivable - Interest Expense/Revenue

In subsequent financial reporting periods, the lessee should calculate the amortization of the discount on the lease liability and recognize that amount 

as interest expense for the period. Any payments made should be allocated first to the accrued interest liability and then to the lease liability. (SFFAS 

54, Par. 43) Likewise, the lessor should calculate the amortization of the discount on the receivable and report that amount as interest revenue for the 

period. Any payments received should be allocated first to the accrued interest receivable and then to the lease receivable. (SFFAS 54, Par. 60) 

Lease Amortization & Lessor Unearned Revenue

During the lease term, the Lessee’s lease asset should be amortized in a systematic and rational manner, over the shorter of: The lease term; or the 

useful life of the underlying asset. Meanwhile, the Lessor should amortize the unearned revenue to lease revenue in a systematic and rational manner 

over the term of the lease. (SFFAS 54, Par. 65)

Modifications/Terminations

In the event a right-to-use lease is terminated before the end of the contractual lease term (other than by a transfer of ownership/purchase of the 

underlying asset), a Lessee should account for the termination by reducing the carrying values of the lease liability and the lease asset and recognizing 

a gain/loss for the difference. Likewise, lessors should reduce the carrying value of the lease receivable and the related unearned revenue, and record 

a gain/loss for the difference.
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Budgetary Accounting Requirements & Agency Decision Points

While proprietary accounting requirements for leases are transformed by SFFAS 54, Leases, budgetary accounting requirements will remain unchanged 

and continue to be guided by the lease scorekeeping rule developed by OMB, CBO, and the House and Senate Budget Committees originally in 

connection with the Budget Enforcement Act of 1990, and guidance regarding this rule provided in OMB Circular No. A-11, Appendix B, Budgetary 

Treatment Of Lease-Purchases and Leases of Capital Assets.

For budgetary accounting, entity management is responsible for exercising professional judgement and collaborating within its agency to reach 

certain determinations before establishing budgetary accounting treatment, including:

1) Operating vs. Capital Lease (as defined by Appendix B of OMB Circular No. A-11); 

2) Budgetary Lease Term, with consideration for Cancellation Clauses; and

3) Budget Authority and Outlays.

Operating/Capital/Lease Purchase 

Reporting entities should apply professional judgment, consistent with the guidance in Appendix B of OMB Circular No. A-11, on Operating 

Leases/Capital Leases criteria to discern the correct budgetary treatment of each lease contract. Budget Authority for Capital Leases should be recorded 

up-front in an amount equal to the “asset cost,” as defined in Appendix B. Meanwhile, outlays of Capital Leases are scored over the lease term in an 

amount equal to the annual lease and other contractually required payments. 

“Amounts. The up-front budget authority required for both lease-purchases and capital leases is called the asset cost. This equals the present value of the 

minimum lease and other contractually required payments excluding payments for identifiable annual operating expenses that would be paid by the 

Government as owner, such as utilities, minor maintenance, and insurance. Property taxes will not be considered to be an operating expense and will be 

included in the calculation of the up-front budget authority. (See section 3 for the treatment of property taxes for purposes of distinguishing operating leases 

from capital leases.) Other contractually required payments include any and all costs related to the asset being leased in addition to the rent fee applied under 

the lease.

For example, other contractually required payments would include all costs under triple net or other unique arrangements. The present value of the lease and 

other contractually required payments is discounted as of the date of the first payment (or the beginning of the lease term, whichever is earlier) using the 

appropriate interest rate (see section 4 for a more detailed explanation and the treatment of multiple deliveries).”
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Key Assumptions Driving Proprietary Accounting Entries:

Lease Term

• A federal reporting entity (Lessee) signs a 5-year lease with a non-federal entity (Lessor) for the right to control/right to use equipment. (For 

illustration purposes, the scenario also shows posting logic under a separate heading for a federal Lessor working with a non-federal Lessee.)

• For illustration purposes, the lease begins at the start of the fiscal year.

• No purchase option probable of being exercised exists.

• The Lessor already has equipment on its Balance Sheet valued at $300,000 with $150,000 Accumulated Depreciation.

• The Present Value of all expected fixed payments is $100,000. The Lessor charges the Lessee the Treasury Rate of 10.00%. 

• All monthly payments are made at the last business day of the month – This scenario assumes payments are made directly to vendor and that 

there is no lag time between disbursement, authorization, and receipt.

Lease Asset/Liability Calculation

• The contract amount is $120,000 ($2,000 monthly payments x 60 months.)

• Management calculates the Present Value of all expected fixed payments to be $94,131. The Lessor charges the Lessee the Treasury Rate of 

10.00%. 

• The Lessor already has equipment on its Balance Sheet valued at $300,000 with $150,000 Accumulated Depreciation.

Fixed & Variable Payments

• Management determines the lease contains only fixed payments. Fixed payments include a minimum annual payment required by the lease 

contract, and lease payments (including interest) are paid at the start of the year. 

• Management determines there are no variable payments based on lessee performance or future usage of the underlying asset in the contract, per 

SFFAS 54, Par. 41. (Also See Technical Release 20, Lease Implementation Guidance, Par. 48 for more information on Variable Payments.)

• Management determines that the fixed lease payments are “contractually required payments" per OMB Circular A-11, Appendix B.
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Key Assumptions Driving Budgetary Accounting Entries:

Budgetary Authority

• The Lessee received a direct appropriation and is working from a multi-year appropriated TAFS from a general fund expenditure account. 

Agency management has concluded that appropriations language allows the budget authority to remain available for the lease and other 

contractually required payments over the full term of the lease.

• It is the responsibility of agencies to determine the correct discount rate and do their own calculations when determining budget authority for 

capital leases. Per OMB Circular No. A-11, Appendix B, all assumptions required to perform the lease analysis are subject to OMB approval. 

(The differential cost of financing has to be paid upfront by the agency as part of their asset cost calculation.) 

• Management determines that the fixed payments are "contractually required payments" per OMB Circular A-11, Appendix B.

• Note – For budgetary purposes, agencies will need to develop amortization tables to calculate the asset cost of capital leases.

Budgetary Lease Capital/Operating Determination

• Management determines the lease to be a “Capital lease” for budgetary purposes. Therefore, the asset cost (up-front budget authority 

required) is the present value of the minimum lease and other contractually required payments. (Note that the differential cost of financing 

has to be paid upfront by the agency as part of their asset cost calculation.)

• Additional budget authority equal to the cost of financing (imputed interest cost) is recorded on an annual basis over the lease term. Imputed 

interest cost is calculated pursuant to the guidance in OMB Circular No. A-11, Appendix B using the Treasury interest rates published in the 

most recent update to Appendix C of OMB Circular No. A-94. It is equal to the difference between the minimum lease and other contractually 

required payments under the full term of the lease and the estimated net present value of those payments (asset cost) that is recorded upfront.

For this example, assume the appropriate discount rate is 10.0%.

• There are no other payments for identifiable annual operating expenses (utilities, minor maintenance, and insurance, etc.)

Budgetary Outlays

• Outlays are scored annually equal to the annual lease and contractually required payments. Over the life of the lease: 

o Outlays for the asset cost comes from the balances obligated when the lease agreement was signed; and

o Outlays for the imputed interest cost comes from new budget authority.

Cancellation Clauses

• The lease does not contain renewal/purchase options or cancellation clauses, and is not associated with government land.
RIGHT-TO-USE LEASES GUIDANCE: BUDGETARY CAPITAL

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Listing of USSGL Accounts Used in This Scenario:

Account Number Account Title

Budgetary

406000 Anticipated Collections From Non-Federal Sources

411900 Other Appropriations Realized

426600 Other Actual Business-Type Collections From Non-Federal Sources

445000 Unapportioned – Unexpired Authority

449000 Anticipated Resources - Unapportioned Authority

451000 Apportionments

459000 Apportionments – Anticipated Resources – Programs Subject to Apportionment

461000 Allotments – Realized Resources

480100 Undelivered Orders – Obligations, Unpaid

490100 Delivered Orders – Obligations, Unpaid

490200 Delivered Orders – Obligations, Paid

Proprietary

101000 Fund Balance With Treasury

134000 Interest Receivable - Not Otherwise Classified

175000 Equipment

175900 Accumulated Depreciation on Equipment

193000 Lessor Lease Receivable*1

193900 Allowance for Loss on Lease Receivable*

195000 Lessee Right-To-Use Lease Asset*

195900 Accumulated Amortization on Lessee Lease Assets*

214000 Accrued Interest Payable - Not Otherwise Classified

233000 Unearned Lessor Revenue*

293000 Lessee Lease Liability*

310000 Unexpended Appropriations - Cumulative

310100 Unexpended Appropriations – Appropriations Received

310700 Unexpended Appropriations - Used - Accrued

310710 Unexpended Appropriations - Used - Disbursed

331000 Cumulative Results of Operations

531000 Interest Revenue - Other

570000 Expended Appropriations – Used Accrued

570010 Expended Appropriations - Disbursed

1 See Treasury Financial Manual, Volume 1, USSGL Supplements, Section II for Account Definitions of new lease accounts.
RIGHT-TO-USE LEASES GUIDANCE: BUDGETARY CAPITAL

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593300 Amortization of Unearned Lessor Revenue*

633000 Other Interest Expense

671000 Depreciation, Amortization, and Depletion

671300 Lessee Lease Amortization*

Amortization Table

 Contract Amount $120,000

 5-Year Lease, 60 monthly payments of $2,000 each

 Treasury Interest Rate of 10.0% for Proprietary and Budgetary Accounting.

 Present Value of Payments = $94,131. Lessee Right-To-Use- Asset & Lease Liability amount: $94,131

 Year 1 Budget Authority = $94,131 Lease Principal Payments over 5 years; Year 1 Interest Expense of $8,726 = $102,857

 Year 2 Budget Authority = Year 2 Interest Expense of $7,126 = $7,126

 For illustration purposes, the lease begins at the start of the fiscal year.

 Monthly payments are considered to be disbursed on the last business day of each month.

Disclaimer

The below guidance is intended to serve as a reference only based on a finite number of underlying assumptions. It is in no way intended to provide

comprehensive posting logic for every leasing activity. Agencies should have a thorough understanding of authoritative standards SFFAS 54, SFFAS 

60, and SFFAS 61 and apply other factors, including but not limited to certain prepayments, accruals, etc. As stated above, agency management must 

exercise professional judgement and collaborate within their agency to reach determinations of lease activities on a lease-by-lease basis, before 

establishing accounting treatment.

Entity management should document these decisions and incorporate them into management’s existing OMB Circular No. A-123, “Management's 

Responsibility for Enterprise Risk Management and Internal Control,” Appendix A, procedures.
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RIGHT-TO-USE LEASES GUIDANCE: BUDGETARY CAPITAL

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RIGHT-TO-USE LEASES GUIDANCE: BUDGETARY CAPITAL

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FISCAL YEAR 1 - Right-To-Use Leases; “Capital” for Budgetary Treatment

Lessee Accounting

1. The Lessee records the enactment of appropriations in Year 1 of the 5-year lease agreement. Per OMB Circular No. A-11, Appendix B, this upfront Budget 

Authority includes the present value of the minimum lease and other contractually required payments over the full term of the lease, as well as the imputed 

interest accrued on the debt in Year 1. The Present Value of expected payments is $94,131, and interest accrued during the first year is $8,726 = Total 

upfront Budget Authority = $102,857. (Imputed interest cost is recorded annually over the lease term.)

Lessee Debit Credit TC

Budgetary Entry

411900 Other Appropriations Realized

 445000 Unapportioned - Unexpired Authority

Proprietary Entry 

101000 (G) Fund Balance With Treasury

 310100 (G) Unexpended Appropriations – Appropriations Received

102,857

102,857

102,857

102,857

A104

2. The Lessee records budgetary authority apportioned by the Office of Management and Budget and available for allotment in Year 1.

Lessee Debit Credit TC

Budgetary Entry

445000 Unapportioned - Unexpired Authority

 451000 Apportionments 

Proprietary Entry

None

102,857

102,857

A116

3. The Lessee records the allotment of authority in Year 1.

Lessee Debit Credit TC
RIGHT-TO-USE LEASES GUIDANCE: BUDGETARY CAPITAL

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Budgetary Entry

451000 Apportionments

 461000 Allotments – Realized Resources 

Proprietary Entry

None

102,857

102,857

A120

4. The lease contract is signed by both parties. The Lessee records current-year undelivered orders without an advance (Equal to only the $100,000 Present 

Value of expected payments - Additional budget authority equal to the cost of financing (imputed interest cost) is recorded on an annual basis over 

the lease term.)

Lessee Debit Credit TC

Budgetary Entry

461000 Allotments – Realized Resources

 480100 Undelivered Orders – Obligations, Unpaid

Proprietary Entry

None

102,857

102,857 B306

5. The Lessee takes control over the use of the equipment; The lease term is 5 years. A Lease Asset and Lease Liability are recorded per SFFAS 54, Par. 40 & 

Par. 49. The entire amount of the lease liability (principle) is covered from the Year 1 appropriation.

Lessee Debit Credit TC

Budgetary Entry

None

Proprietary Entry

195000 Lessee Right-To-Use Lease Asset

 293000 Lessee Lease Liability

94,131 94,131
RIGHT-TO-USE LEASES GUIDANCE: BUDGETARY CAPITAL

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6a. The lessee records accrued interest for month 1, per the proprietary amortization schedule. The lessee should calculate the amortization of the discount on the lease 

liability and recognize that amount as interest expense for the period. (SFFAS 54, Par. 43)

Lessee - Accrual of Interest Expense for Month 1. Debit Credit TC

Budgetary Entry

None

Proprietary Entry 

633000 Other Interest Expense

 214000 Accrued Interest Payable – Not Otherwise Classified

784

784

B418

7a. The Lessee makes the monthly lease payment to Lessor and records the disbursement of appropriations for the fiscal year.

Lessee - Disbursement of Monthly Lease Payment (Budget Authority received up-front in Year 1.) Debit Credit TC

Budgetary Entry

480100 Undelivered Orders – Obligations, Unpaid 

 490200 Delivered Orders – Obligations, Paid 

Proprietary Entry 

293000 Lessee Lease Liability

214000 Accrued Interest Payable - Not Otherwise Classified

 101000 (G) Fund Balance With Treasury

310710 Unexpended Appropriations - Used - Disbursed 

 570010 Expended Appropriations - Disbursed

2,000

1,216

 784

2,000

2,000

2,000

2,000

B110

B234

Ending Lease Liability Balance (USSGL 293000) = $92,915

8a. The Lessee records amortization of the right-to-use Lease Asset. ($94,131 / 5 Year Life of Lease / 12 months = $1,569 Straight-line Amortization per month.) 

A lease asset should be amortized in a systematic and rational manner over the shorter of: The lease term; OR the useful life of the underlying asset. (SFFAS 54, Par. 

50)

Lessee - Amortization of Lease Asset for Month 1. Debit Credit TC

Budgetary Entry

None

Proprietary Entry

671300 Lessee Lease Amortization

 195900 Accumulated Amortization on Lessee Lease Assets

1,569

1,569

Ending Lease Asset Balance (USSGL 195000 - 195900) = $92,562
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6b. The lessee records accrued interest for month 2, per the proprietary amortization schedule. The lessee should calculate the amortization of the discount on the lease 

liability and recognize that amount as interest expense for the period. (SFFAS 54, Par. 43)

Lessee - Accrual of Interest Expense for Month 2. Debit Credit TC

Budgetary Entry

None

Proprietary Entry 

633000 Other Interest Expense

 214000 (N) Accrued Interest Payable – Not Otherwise Classified

774

774

B418

7b. The Lessee makes the monthly lease payment to Lessor and records the disbursement of appropriations for the fiscal year.

Lessee - Disbursement of Monthly Lease Payment (Budget Authority received up-front in Year 1.) Debit Credit TC

Budgetary Entry

480100 Undelivered Orders – Obligations, Unpaid 

 490200 Delivered Orders – Obligations, Paid 

Proprietary Entry 

293000 Lessee Lease Liability

214000 (N) Accrued Interest Payable – Not Otherwise Classified

 101000 (G) Fund Balance With Treasury

310710 Unexpended Appropriations - Used - Disbursed 

 570010 Expended Appropriations - Disbursed

2,000

1,226

 774

2,000

2,000

2,000

2,000

B110

B234

Ending Lease Liability Balance (USSGL 293000) = $91,689

8b. The Lessee records amortization of the right-to-use Lease Asset. ($94,131 / 5 Year Life of Lease / 12 months = $1,569 Straight-line Amortization per month.) 

A lease asset should be amortized in a systematic and rational manner over the shorter of: The lease term; OR the useful life of the underlying asset. (SFFAS 54, Par. 

50)

Lessee - Amortization of Lease Asset for Month 2. Debit Credit TC

Budgetary Entry

None

Proprietary Entry

671300 Lessee Lease Amortization

 195900 Accumulated Amortization on Lessee Lease Assets

1,569

1,569

Ending Lease Asset Balance (USSGL 195000 - 195900) = $90,993
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6c. The lessee records accrued interest for month 3, per the proprietary amortization schedule. The lessee should calculate the amortization of the discount on the lease 

liability and recognize that amount as interest expense for the period. (SFFAS 54, Par. 43)

Lessee - Accrual of Interest Expense for Month 3. Debit Credit TC

Budgetary Entry

None

Proprietary Entry 

633000 Other Interest Expense

 214000 (N) Accrued Interest Payable – Not Otherwise Classified

764

764

B418

7c. The Lessee makes the monthly lease payment to Lessor and records the disbursement of appropriations for the fiscal year.

Lessee - Disbursement of Monthly Lease Payment (Budget Authority received up-front in Year 1.) Debit Credit TC

Budgetary Entry

480100 Undelivered Orders – Obligations, Unpaid 

 490200 Delivered Orders – Obligations, Paid 

Proprietary Entry 

293000 Lessee Lease Liability

214000 (N) Accrued Interest Payable – Not Otherwise Classified

 101000 (G) Fund Balance With Treasury

310710 Unexpended Appropriations - Used - Disbursed 

 570010 Expended Appropriations - Disbursed

2,000

1,236

 764

2,000

2,000

2,000

2,000

B110

B234

Ending Lease Liability Balance (USSGL 293000) = $90,454

8c. The Lessee records amortization of the right-to-use Lease Asset. ($94,131 / 5 Year Life of Lease / 12 months = $1,569 Straight-line Amortization per month.) 

A lease asset should be amortized in a systematic and rational manner over the shorter of: The lease term; OR the useful life of the underlying asset. (SFFAS 54, Par. 

50)

Lessee - Amortization of Lease Asset for Month 3. Debit Credit TC

Budgetary Entry

None

Proprietary Entry

671300 Lessee Lease Amortization

 195900 Accumulated Amortization on Lessee Lease Assets

1,569

1,569

Ending Lease Asset Balance (USSGL 195000 - 195900) = $89,424
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6d. The lessee records accrued interest for month 4, per the proprietary amortization schedule. The lessee should calculate the amortization of the discount on the lease 

liability and recognize that amount as interest expense for the period. (SFFAS 54, Par. 43)

Lessee - Accrual of Interest Expense for Month 4. Debit Credit TC

Budgetary Entry

None

Proprietary Entry 

633000 Other Interest Expense

 214000 (N) Accrued Interest Payable – Not Otherwise Classified

754

754

B418

7d. The Lessee makes the monthly lease payment to Lessor and records the disbursement of appropriations for the fiscal year.

Lessee - Disbursement of Monthly Lease Payment (Budget Authority received up-front in Year 1.) Debit Credit TC

Budgetary Entry

480100 Undelivered Orders – Obligations, Unpaid 

 490200 Delivered Orders – Obligations, Paid 

Proprietary Entry 

293000 Lessee Lease Liability

214000 (N) Accrued Interest Payable – Not Otherwise Classified

 101000 (G) Fund Balance With Treasury

310710 Unexpended Appropriations - Used - Disbursed 

 570010 Expended Appropriations - Disbursed

2,000

1,246

 754

2,000

2,000

2,000

2,000

B110

B234

Ending Lease Liability Balance (USSGL 293000) = $89,207

8d. The Lessee records amortization of the right-to-use Lease Asset. ($94,131 / 5 Year Life of Lease / 12 months = $1,569 Straight-line Amortization per month.) 

A lease asset should be amortized in a systematic and rational manner over the shorter of: The lease term; OR the useful life of the underlying asset. (SFFAS 54, Par. 

50)

Lessee - Amortization of Lease Asset for Month 4. Debit Credit TC

Budgetary Entry

None

Proprietary Entry

671300 Lessee Lease Amortization

 195900 Accumulated Amortization on Lessee Lease Assets

1,569

1,569

Ending Lease Asset Balance (USSGL 195000 - 195900) = $87,855
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6e. The lessee records accrued interest for month 5, per the proprietary amortization schedule. The lessee should calculate the amortization of the discount on the lease 

liability and recognize that amount as interest expense for the period. (SFFAS 54, Par. 43)

Lessee - Accrual of Interest Expense for Month 5. Debit Credit TC

Budgetary Entry

None

Proprietary Entry 

633000 Other Interest Expense

 214000 (N) Accrued Interest Payable – Not Otherwise Classified

743

743

B418

7e. The Lessee makes the monthly lease payment to Lessor and records the disbursement of appropriations for the fiscal year.

Lessee - Disbursement of Monthly Lease Payment (Budget Authority received up-front in Year 1.) Debit Credit TC

Budgetary Entry

480100 Undelivered Orders – Obligations, Unpaid 

 490200 Delivered Orders – Obligations, Paid 

Proprietary Entry 

293000 Lessee Lease Liability

214000 (N) Accrued Interest Payable – Not Otherwise Classified

 101000 (G) Fund Balance With Treasury

310710 Unexpended Appropriations - Used - Disbursed 

 570010 Expended Appropriations - Disbursed

2,000

1,257

 743

2,000

2,000

2,000

2,000

B110

B234

Ending Lease Liability Balance (USSGL 293000) = $87,951

8e. The Lessee records amortization of the right-to-use Lease Asset. ($94,131 / 5 Year Life of Lease / 12 months = $1,569 Straight-line Amortization per month.) 

A lease asset should be amortized in a systematic and rational manner over the shorter of: The lease term; OR the useful life of the underlying asset. (SFFAS 54, Par. 

50)

Lessee - Amortization of Lease Asset for Month 5. Debit Credit TC

Budgetary Entry

None

Proprietary Entry

671300 Lessee Lease Amortization

 195900 Accumulated Amortization on Lessee Lease Assets

1,569

1,569

Ending Lease Asset Balance (USSGL 195000 - 195900) = $86,287
RIGHT-TO-USE LEASES GUIDANCE: BUDGETARY CAPITAL

Effective Fiscal 2024

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6f. The lessee records accrued interest for month 6, per the proprietary amortization schedule. The lessee should calculate the amortization of the discount on the lease 

liability and recognize that amount as interest expense for the period. (SFFAS 54, Par. 43)

Lessee - Accrual of Interest Expense for Month 6. Debit Credit TC

Budgetary Entry

None

Proprietary Entry 

633000 Other Interest Expense

 214000 (N) Accrued Interest Payable – Not Otherwise Classified

733

733

B418

7f. The Lessee makes the monthly lease payment to Lessor and records the disbursement of appropriations for the fiscal year.

Lessee - Disbursement of Monthly Lease Payment (Budget Authority received up-front in Year 1.) Debit Credit TC

Budgetary Entry

480100 Undelivered Orders – Obligations, Unpaid 

 490200 Delivered Orders – Obligations, Paid 

Proprietary Entry 

293000 Lessee Lease Liability

214000 (N) Accrued Interest Payable – Not Otherwise Classified

 101000 (G) Fund Balance With Treasury

310710 Unexpended Appropriations - Used - Disbursed 

 570010 Expended Appropriations - Disbursed

2,000

1,267

 733

2,000

2,000

2,000

2,000

B110

B234

Ending Lease Liability Balance (USSGL 293000) = $86,684

8f. The Lessee records amortization of the right-to-use Lease Asset. ($94,131 / 5 Year Life of Lease / 12 months = $1,569 Straight-line Amortization per month.) 

A lease asset should be amortized in a systematic and rational manner over the shorter of: The lease term; OR the useful life of the underlying asset. (SFFAS 54, Par. 

50)

Lessee - Amortization of Lease Asset for Month 6. Debit Credit TC

Budgetary Entry

None

Proprietary Entry

671300 Lessee Lease Amortization

 195900 Accumulated Amortization on Lessee Lease Assets

1,569

1,569

Ending Lease Asset Balance (USSGL 195000 - 195900) = $84,718
RIGHT-TO-USE LEASES GUIDANCE: BUDGETARY CAPITAL

Effective Fiscal 2024

 Page 20 of 60 November 2022

*(For simplicity, the recurring entries of Lessee Payments for Months 7-12 are not illustrated, but amounts can be seen in the amortization table.)*

9. The Lessee records the closing of lease and interest expenses to cumulative results of operations.

Lessee Debit Credit TC

Budgetary Entry

None

Proprietary Entry

331000 Cumulative Results of Operations

 671300 Lessee Lease Amortization

 633000 (N) Other Interest Expense

 

27,552

 18,826

 8,726

F336

10. The Lessee records the closing of expended appropriation to cumulative results of operations, along with the closing of fiscal-year activity to unexpended 

appropriations.

Lessee Debit Credit TC

Budgetary Entry

None

Proprietary Entry

570010 Expended Appropriations – Disbursed

 331000 Cumulative Results of Operations

310000 Unexpended Appropriations – Cumulative

 310710 Unexpended Appropriations - Used – Disbursed

310100 (G) Unexpended Appropriations – Appropriations Received

 310000 Unexpended Appropriations - Cumulative

24,000

24,000

 102,857

24,000

24,000

 102,857

F336

F342

F342
RIGHT-TO-USE LEASES GUIDANCE: BUDGETARY CAPITAL

Effective Fiscal 2024

 Page 21 of 60 November 2022

11. The Lessee records the closing of paid delivered orders to total actual resources.

Lessee Debit Credit TC

Budgetary Entry

490200 Delivered Orders – Obligations, Paid

 420100 Total Actual Resources, Collected

Proprietary Entry

None

23,982

23,982

F314

12. The Lessee records the consolidation of actual net-funded resources.

Lessee Debit Credit TC

Budgetary Entry

420100 Total Actual Resources, Collected 

 411900 Other Appropriations Realized

 

Proprietary Entry

None

102,857

102,857 F302
RIGHT-TO-USE LEASES GUIDANCE: BUDGETARY CAPITAL

Effective Fiscal 2024

 Page 22 of 60 November 2022

Lessor Accounting

1. In Year 1, the Lessor records anticipated collections. (The amount of expected Year 1 monthly payments is $24,000.)

Lessor Debit Credit TC

Budgetary Entry

406000 Anticipated Collections From Non-Federal Sources

 449000 Anticipated Resources - Unapportioned Authority

Proprietary Entry

None

24,000

24,000

A140

2. In Year 1, the Lessor records the apportionment approval by OMB of anticipated authority.

Lessor Debit Credit TC

Budgetary Entry

449000 Anticipated Resources - Unapportioned Authority

 459000 Apportionments - Anticipated Resources - Programs Subject to Apportionment

Proprietary Entry

None

24,000

24,000 A118

3. The Lessee takes control over the use of the equipment; The lease term is 5 years. A Lease Receivable and Unearned Revenue are recorded per SFFAS 54. 

Also per SFFAS 54, Par. 56, the Lessor reduces the lease receivable by a provision for uncollectible amounts.

Lessor Debit Credit TC

Budgetary Entry

None

Proprietary Entry

193000 Lessor Lease Receivable

193900 Allowance for Loss on Lease Receivable

 233000 Lessor Lease Unearned Revenue

94,131

 2,000

92,131

Initial Lease Receivable Balance of USSGL 193000 = $94,131.
RIGHT-TO-USE LEASES GUIDANCE: BUDGETARY CAPITAL

Effective Fiscal 2024

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4a. The Lessor recognizes interest revenue for the amortization of the discount on the lease receivable for month 1. (SFFAS 54, Par. 60)

Lessor - Accrual of Interest Revenue for Year 1, Month 1 Debit Credit TC

Budgetary Entry

None

Proprietary Entry 

134000 Interest Receivable - Not Otherwise Classified

 531000 Interest Revenue - Other

784

784

5a. In month 1, the Lessee pays monthly lease payment to Lessor, and the Lessor records the receipt of payment. The Lessor allots the funds.

Lessor - Receipt of first Monthly Lease Payment Debit Credit TC

Budgetary Entry

426600 Other Actual Business-Type Collections From Non-Federal Sources

 406000 Anticipated Collections From Non-Federal Sources

459000 Apportionments - Anticipated Resources - Programs Subject to Apportionment

 451000 Apportionments 

451000 Apportionments

 461000 Allotments – Realized Resources 

Proprietary Entry

101000 (G) Fund Balance With Treasury

 134000 Interest Receivable - Not Otherwise Classified

 193000 Lessor Lease Receivable

2,000

2,000

2,000

2,000

2,000

2,000

2,000

 784

 1,216

C109

A123

A120

Ending Lease Receivable Balance of USSGL 193000 = $92,915

6a. The Lessor recognizes revenue from the measurement of the lease receivable as earned revenue for the reporting period via straightline amortization. A Lessor should 

amortize the unearned revenue (recognizing it as earned revenue) in a systematic and rational manner of life of the lease. (SFFAS 60, Par. 26)

Lessor - Recognition of Unearned Revenue for Year 1, Month 1 Debit Credit TC

Budgetary Entry

None

Proprietary Entry 

233000 Lessor Lease Unearned Revenue

 593300 Amortization of Unearned Lessor Revenue

1,569

1,569
RIGHT-TO-USE LEASES GUIDANCE: BUDGETARY CAPITAL

Effective Fiscal 2024

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4b. The Lessor recognizes interest revenue for the amortization of the discount on the lease receivable for month 2. (SFFAS 54, Par. 60)

Lessor - Accrual of Interest Revenue for Year 1, Month 2 Debit Credit TC

Budgetary Entry

None

Proprietary Entry 

134000 Interest Receivable - Not Otherwise Classified

 531000 Interest Revenue - Other

774

774

5b. In month 2, the Lessee pays monthly lease payment to Lessor, and the Lessor records the receipt of payment. The Lessor allots the funds.

Lessor - Receipt of second Monthly Lease Payment Debit Credit TC

Budgetary Entry

426600 Other Actual Business-Type Collections From Non-Federal Sources

 406000 Anticipated Collections From Non-Federal Sources

459000 Apportionments - Anticipated Resources - Programs Subject to Apportionment

 451000 Apportionments 

451000 Apportionments

 461000 Allotments – Realized Resources 

Proprietary Entry

101000 (G) Fund Balance With Treasury

 134000 Interest Receivable - Not Otherwise Classified

 193000 Lessor Lease Receivable

2,000

2,000

2,000

2,000

2,000

2,000

2,000

 774

 1,226

C109

A123

A120

Ending Lease Receivable Balance of USSGL 193000 = $91,689

6b. The Lessor recognizes revenue from the measurement of the lease receivable as earned revenue for the reporting period via straightline amortization. A Lessor should 

amortize the unearned revenue (recognizing it as earned revenue) in a systematic and rational manner of life of the lease. (SFFAS 60, Par. 26)

Lessor - Recognition of Unearned Revenue for Year 1, Month 2 Debit Credit TC

Budgetary Entry

None

Proprietary Entry 

233000 Lessor Lease Unearned Revenue

 593300 Amortization of Unearned Lessor Revenue

1,569

1,569
RIGHT-TO-USE LEASES GUIDANCE: BUDGETARY CAPITAL

Effective Fiscal 2024

 Page 25 of 60 November 2022

4c. The Lessor recognizes interest revenue for the amortization of the discount on the lease receivable for month 3. (SFFAS 54, Par. 60)

Lessor - Accrual of Interest Revenue for Year 1, Month 3 Debit Credit TC

Budgetary Entry

None

Proprietary Entry 

134000 Interest Receivable - Not Otherwise Classified

 531000 Interest Revenue - Other

764

764

5c. In month 3, the Lessee pays monthly lease payment to Lessor, and the Lessor records the receipt of payment. The Lessor allots the funds.

Lessor - Receipt of third Monthly Lease Payment Debit Credit TC

Budgetary Entry

426600 Other Actual Business-Type Collections From Non-Federal Sources

 406000 Anticipated Collections From Non-Federal Sources

459000 Apportionments - Anticipated Resources - Programs Subject to Apportionment

 451000 Apportionments 

451000 Apportionments

 461000 Allotments – Realized Resources 

Proprietary Entry

101000 (G) Fund Balance With Treasury

 134000 Interest Receivable - Not Otherwise Classified

 193000 Lessor Lease Receivable

2,000

2,000

2,000

2,000

2,000

2,000

2,000

 764

 1,236

C109

A123

A120

Ending Lease Receivable Balance of USSGL 193000 = $90,454

6c. The Lessor recognizes revenue from the measurement of the lease receivable as earned revenue for the reporting period via straightline amortization. A Lessor should 

amortize the unearned revenue (recognizing it as earned revenue) in a systematic and rational manner of life of the lease. (SFFAS 60, Par. 26)

Lessor - Recognition of Unearned Revenue for Year 1, Month 3 Debit Credit TC

Budgetary Entry

None

Proprietary Entry 

233000 Lessor Lease Unearned Revenue

 593300 Amortization of Unearned Lessor Revenue

1,569

1,569
RIGHT-TO-USE LEASES GUIDANCE: BUDGETARY CAPITAL

Effective Fiscal 2024

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4d. The Lessor recognizes interest revenue for the amortization of the discount on the lease receivable for month 4. (SFFAS 54, Par. 60)

Lessor - Accrual of Interest Revenue for Year 1, Month 4 Debit Credit TC

Budgetary Entry

None

Proprietary Entry 

134000 Interest Receivable - Not Otherwise Classified

 531000 Interest Revenue - Other

764

764

5d. In month 4, the Lessee pays monthly lease payment to Lessor, and the Lessor records the receipt of payment. The Lessor allots the funds.

Lessor - Receipt of fourth Monthly Lease Payment Debit Credit TC

Budgetary Entry

426600 Other Actual Business-Type Collections From Non-Federal Sources

 406000 Anticipated Collections From Non-Federal Sources

459000 Apportionments - Anticipated Resources - Programs Subject to Apportionment

 451000 Apportionments 

451000 Apportionments

 461000 Allotments – Realized Resources 

Proprietary Entry

101000 (G) Fund Balance With Treasury

 134000 Interest Receivable - Not Otherwise Classified

 193000 Lessor Lease Receivable

2,000

2,000

2,000

2,000

2,000

2,000

2,000

 764

 1,236

C109

A123

A120

Ending Lease Receivable Balance of USSGL 193000 = $89,207

6d. The Lessor recognizes revenue from the measurement of the lease receivable as earned revenue for the reporting period via straightline amortization. A Lessor should 

amortize the unearned revenue (recognizing it as earned revenue) in a systematic and rational manner of life of the lease. (SFFAS 60, Par. 26)

Lessor - Recognition of Unearned Revenue for Year 1, Month 4 Debit Credit TC

Budgetary Entry

None

Proprietary Entry 

233000 Lessor Lease Unearned Revenue

 593300 Amortization of Unearned Lessor Revenue

1,569

1,569
RIGHT-TO-USE LEASES GUIDANCE: BUDGETARY CAPITAL

Effective Fiscal 2024

 Page 27 of 60 November 2022

4e. The Lessor recognizes interest revenue for the amortization of the discount on the lease receivable for month 5. (SFFAS 54, Par. 60)

Lessor - Accrual of Interest Revenue for Year 1, Month 5 Debit Credit TC

Budgetary Entry

None

Proprietary Entry 

134000 Interest Receivable - Not Otherwise Classified

 531000 Interest Revenue - Other

743

743

5e. In month 5, the Lessee pays monthly lease payment to Lessor, and the Lessor records the receipt of payment. The Lessor allots the funds.

Lessor - Receipt of fifth Monthly Lease Payment Debit Credit TC

Budgetary Entry

426600 Other Actual Business-Type Collections From Non-Federal Sources

 406000 Anticipated Collections From Non-Federal Sources

459000 Apportionments - Anticipated Resources - Programs Subject to Apportionment

 451000 Apportionments 

451000 Apportionments

 461000 Allotments – Realized Resources 

Proprietary Entry

101000 (G) Fund Balance With Treasury

 134000 Interest Receivable - Not Otherwise Classified

 193000 Lessor Lease Receivable

2,000

2,000

2,000

2,000

2,000

2,000

2,000

 743

 1,257

C109

A123

A120

Ending Lease Receivable Balance of USSGL 193000 = $87,951

6e. The Lessor recognizes revenue from the measurement of the lease receivable as earned revenue for the reporting period via straightline amortization. A Lessor should 

amortize the unearned revenue (recognizing it as earned revenue) in a systematic and rational manner of life of the lease. (SFFAS 60, Par. 26)

Lessor - Recognition of Unearned Revenue for Year 1, Month 5 Debit Credit TC

Budgetary Entry

None

Proprietary Entry 

233000 Lessor Lease Unearned Revenue

 593300 Amortization of Unearned Lessor Revenue

1,569

1,569
RIGHT-TO-USE LEASES GUIDANCE: BUDGETARY CAPITAL

Effective Fiscal 2024

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4f. The Lessor recognizes interest revenue for the amortization of the discount on the lease receivable for month 6. (SFFAS 54, Par. 60)

Lessor - Accrual of Interest Revenue for Year 1, Month 6 Debit Credit TC

Budgetary Entry

None

Proprietary Entry 

134000 Interest Receivable - Not Otherwise Classified

 531000 Interest Revenue - Other

733

733

5f. In month 6, the Lessee pays monthly lease payment to Lessor, and the Lessor records the receipt of payment. The Lessor allots the funds.

Lessor - Receipt of sixth Monthly Lease Payment Debit Credit TC

Budgetary Entry

426600 Other Actual Business-Type Collections From Non-Federal Sources

 406000 Anticipated Collections From Non-Federal Sources

459000 Apportionments - Anticipated Resources - Programs Subject to Apportionment

 451000 Apportionments 

451000 Apportionments

 461000 Allotments – Realized Resources 

Proprietary Entry

101000 (G) Fund Balance With Treasury

 134000 Interest Receivable - Not Otherwise Classified

 193000 Lessor Lease Receivable

2,000

2,000

2,000

2,000

2,000

2,000

2,000

 733

 1,267

C109

A123

A120

Ending Lease Receivable Balance of USSGL 193000 = $86,684

6f. The Lessor recognizes revenue from the measurement of the lease receivable as earned revenue for the reporting period via straightline amortization. A Lessor should 

amortize the unearned revenue (recognizing it as earned revenue) in a systematic and rational manner of life of the lease. (SFFAS 60, Par. 26)

Lessor - Recognition of Unearned Revenue for Year 1, Month 6 Debit Credit TC

Budgetary Entry

None

Proprietary Entry 

233000 Lessor Lease Unearned Revenue

 593300 Amortization of Unearned Lessor Revenue

1,569

1,569
RIGHT-TO-USE LEASES GUIDANCE: BUDGETARY CAPITAL

Effective Fiscal 2024

 Page 29 of 60 November 2022

*(For simplicity, the recurring entries of Lessor Receipts for Months 7-12 are not illustrated, but amounts can be seen in the amortization table.)*

7. In Year 1, the Lessor records depreciation expense on equipment it owns (the underlying asset within the lease.) $300,000 cost / 20-year useful life = $15,000.

Lessor Debit Credit TC

Budgetary Entry

None

Proprietary Entry

671000 (N) Depreciation, Amortization, and Depletion 

 175900 Accumulated Depreciation on Equipment 

15,000

15,000

E120

8. The Lessor records the closing of revenue to cumulative results of operations.

Lessor Debit Credit TC

Budgetary Entry

None 

Proprietary Entry

593300 Amortization of Unearned Lessor Revenue

531000 Interest Revenue - Other

 331000 Cumulative Results of Operations 

18,826

 8,726

27,552

F336

9. The Lessor records the closing of depreciation expense to cumulative results of operations.

Lessor Debit Credit TC

Budgetary Entry

None 

Proprietary Entry

331000 Cumulative Results of Operations

 671000 Depreciation, Amortization, and Depletion 

15,000

15,000

F336
RIGHT-TO-USE LEASES GUIDANCE: BUDGETARY CAPITAL

Effective Fiscal 2024

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10. The Lessor records the closing of unobligated balances in programs subject to apportionment to unapportioned authority.

Lessor Debit Credit TC

Budgetary Entry

461000 Allotments – Realized Resources 

 445000 Unapportioned – Unexpired Authority

Proprietary Entry

None

24,000

24,000

F308

11. The Lessor records the consolidation of actual net-funded resources.

Lessor Debit Credit TC

Budgetary Entry

420100 Total Actual Resources, Collected 

 426600 Other Actual Business-Type Collections From Non-Federal Sources

 

Proprietary Entry

None

24,000

24,000

F302
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Effective Fiscal 2024

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Fiscal Year 1 Post-Closing Adjusted Trial Balance:

FISCAL YEAR 1 POST-CLOSING LESSEE LESSOR

Account Description Debit Credit Debit Credit

Budgetary

420100 Total Actual Resources, Collected 78,857 - 24,000 -

445000 Unapportioned – Unexpired Authority - - - 24,000

490100 Delivered Orders, Obligations Unpaid - 78,857 - -

Total 78,857 78,857 24,000 24,000

Proprietary

101000 (G) Fund Balance With Treasury 78,857 - 24,000 -

134000 (N) Interest Receivable - Not Otherwise Classified - - - -

175000 Equipment - - 300,000 -

175900 Acc. Depreciation on Equipment - - - 165,000

193000 Lessor Lease Receivable - - 76,857 -

193900 Allowance for Loss on Lease Receivable - - - 2,000

195000 Lessee Right-To-Use Lease Asset 94,131 - - -

195900 Accumulated Amortization on Lessee Lease Assets - 18,826 - -

214000 (N) Accrued Interest Payable - Not Otherwise Classified - - - -

233000 Unearned Lessor Revenue - - - 73,305

293000 Lessee Lease Liability - 78,857 - -

310000 Unexpended Appropriations - Cumulative - 78,857 - -

331000 Cumulative Results of Operations 3,552 - - 162,552

Total 176,540 176,540 402,857 402,857
RIGHT-TO-USE LEASES GUIDANCE: BUDGETARY CAPITAL

Effective Fiscal 2024

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Year 1 Financial Statements:

STANDARDIZED BALANCE SHEET – YEAR 1

Line No. YEAR 1 LESSEE LESSOR

Assets (Note 2)

Intra-governmental

1 Fund Balance with Treasury (Note 3) (101000) 78,857 24,000

7 Total intra-governmental assets 78,857 24,000

Other than intra-governmental

12 General and right-to-use property, plant, and equipment, net (Note 10) (175000E, 175900E, 195000E, 

195900E) 75,305 135,000

17 Other assets (Note 12) (193000E, 193900E) - 76,857

18 Total other than intra-governmental 75,305 213,357

19 Total assets 154,162 235,857

Liabilities (Note 13)

Other than intra-governmental

36 Advances from others and deferred revenue (233000N) - 73,305

37 Other liabilities (Notes 18, 19, and 20) (293000E) 78,857 -

38 Total other than intra-governmental 78,857 73,305

39 Total liabilities 78,857 73,305

Net position

41.2 Unexpended appropriations - Funds from Dedicated Collections (Note 21) (310000E) 78,857 -

42.2 Cumulative results of operations - Funds from other than Dedicated Collections (331000E) (3,552) 162,552

43 Total net position 75,305 162,552

44 Total liabilities and net position 154,162 235,857

STATEMENT OF NET COST – YEAR 1

Line No. YEAR 1 LESSEE LESSOR

Gross Program Costs (Note 21):

1 Gross costs (633000E, 671000E, 671300E, 693000E) 27,552 15,000

2 Less: earned revenue (531000E, 593000E, 593300E) - 27,552

3 Net program costs 27,552 (12,552)

5 Net program costs including Assumption Changes: 27,552 (12,552)

8 Net cost of operations 27,552 (12,552)
RIGHT-TO-USE LEASES GUIDANCE: BUDGETARY CAPITAL

Effective Fiscal 2024

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STATEMENT OF CHANGES IN NET POSITION – YEAR 1

Line No. YEAR 1 LESSEE LESSOR

Unexpended Appropriations:

4 Appropriations received (310100E) 102,857 -

7 Appropriations used (310700E, 310710E) 24,000 -

8 Net Change in Unexpended Appropriations (calc.) 24,000 -

9 Total Unexpended Appropriations – Ending (calc.) 78,857 -

Cumulative Results of Operations:

10 Beginning Balances (331000B) - 150,000

12 Beginning balances, as adjusted - 150,000

14 Appropriations used (570000E, 570010E) 24,000 -

21 Revenue From (Net Cost of) Operations (+/-) (27,552) 12,552

22 Net Change in Cumulative Results of Operations (27,552) 12,552

23 Cumulative Results of Operations – Ending (3,552) 162,552

24 Net Position (calc.) 75,305 162,552

Year 1 Reclassified Financial Statements: 

STANDARDIZED BALANCE SHEET – YEAR 1

Line No. YEAR 1 LESSEE LESSOR

Assets (Note 2)

Intra-governmental

1 Fund Balance with Treasury (Note 3) (101000) 78,857 24,000

7 Total intra-governmental assets 78,857 24,000

Other than intra-governmental

12 General and right-to-use property, plant, and equipment, net (Note 10) (175000E, 175900E, 195000E, 

195900E) 75,305 135,000

17 Other assets (Note 12) (193000E, 193900E) - 76,857

18 Total other than intra-governmental 75,305 213,357

19 Total assets 154,162 235,857

Liabilities (Note 13)

Other than intra-governmental
RIGHT-TO-USE LEASES GUIDANCE: BUDGETARY CAPITAL

Effective Fiscal 2024

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36 Advances from others and deferred revenue (233000N) - 73,305

37 Other liabilities (Notes 18, 19, and 20) (293000E) 78,857 -

38 Total other than intra-governmental 78,857 73,305

39 Total liabilities 78,857 73,305

Net position

41.2 Unexpended appropriations - Funds from Dedicated Collections (Note 21) (310000E) 78,857 -

42.2 Cumulative results of operations - Funds from other than Dedicated Collections (331000E) (3,552) 162,552

43 Total net position 75,305 162,552

44 Total liabilities and net position 154,162 235,857

RECLASSIFIED STATEMENT OF NET COST – YEAR 1

Line No. YEAR 1 LESSEE LESSOR

1 Gross cost

2 Non-federal gross cost (633000E, 671000E, 671300E, 693000E) 27,552 15,000

6 Total non-federal gross cost (calc.) 27,552 15,000

9 Department total gross cost (calc.) 27,552 15,000

10 Earned revenue

11 Non-federal earned revenue (531000E, 593000E, 593300E) - 27,552

14 Department total earned revenue (calc.) - 27,552

15 Net cost of operations (calc.) 27,552 (12,552)

RECLASSIFIED STATEMENT OF OPERATIONS AND CHANGES IN NET POSITION – YEAR 1

Line No. YEAR 1 LESSEE LESSOR

1 Net position, beginning of period (310000B, 331000B) - 150,000

7 Financing sources:

7.1 Appropriations received as adjusted (rescissions and other adjustments) (RC 41)/1 (310100E) 102,857 -

7.2 Appropriations used (RC 39) (310700E, 310710E) 24,000 -

7.3 Appropriations expended (RC 38)/1 (570000E, 570010E) (24,000) -

7.30 Total financing sources (calc.) 102,857 -

8 Revenue From (Net cost of) Operations (+/-) (27,552) 12,552

9 Net position, end of period (calc.) 75,305 162,552
RIGHT-TO-USE LEASES GUIDANCE: BUDGETARY CAPITAL

Effective Fiscal 2024

 Page 35 of 60 November 2022

FISCAL YEAR 2 - Right-To-Use Leases; “Capital” for Budgetary Treatment

Lessee Accounting

1. In Year 2, the Lessee records the enactment of appropriations. Per OMB Circular No. A-11, Appendix B, interest accrued during the year is included in the 

appropriation. (Imputed interest cost is recorded annually over the lease term.)

Lessee - Enactment of appropriation for Year 2 of interest. Debit Credit TC

Budgetary Entry

411900 Other Appropriations Realized

 445000 Unapportioned - Unexpired Authority

Proprietary Entry 

101000 (G) Fund Balance With Treasury

 310100 (G) Unexpended Appropriations – Appropriations Received

7,126

7,126

7,126

7,126

A104

2. The Lessee records budgetary authority apportioned by the Office of Management and Budget and available for allotment in Year 2.

Lessee Debit Credit TC

Budgetary Entry

445000 Unapportioned - Unexpired Authority

 451000 Apportionments 

Proprietary Entry

None

7,126

7,126

A116

3. The Lessee records the allotment of authority in Year 2.

Lessee Debit Credit TC

Budgetary Entry

451000 Apportionments

 461000 Allotments – Realized Resources 

Proprietary Entry

None

7,126

7,126

A120
RIGHT-TO-USE LEASES GUIDANCE: BUDGETARY CAPITAL

Effective Fiscal 2024

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4. The Lessee records current-year undelivered orders without an advance (Equal to only the cost of financing (imputed interest cost) whch is recorded on 

an annual basis over the lease term.)

Lessee Debit Credit TC

Budgetary Entry

461000 Allotments – Realized Resources

 480100 Undelivered Orders – Obligations, Unpaid

Proprietary Entry

None

102,857

102,857 B306
RIGHT-TO-USE LEASES GUIDANCE: BUDGETARY CAPITAL

Effective Fiscal 2024

 Page 37 of 60 November 2022

5a. The lessee records accrued interest for Year 2, Month 1, per the proprietary amortization schedule. The lessee should calculate the amortization of the discount on 

the lease liability and recognize that amount as interest expense for the period. (SFFAS 54, Par. 43)

Lessee - Accrual of Interest Expense for Year 2, Month 1. Debit Credit TC

Budgetary Entry

None

Proprietary Entry 

633000 Other Interest Expense

 214000 (N) Accrued Interest Payable – Not Otherwise Classified

657

657

B418

6a. The Lessee makes the monthly lease payment to Lessor and records the disbursement of appropriations for the fiscal year.

Lessee - Disbursement of Monthly Lease Payment (Budget Authority received up-front in Year 1.) Debit Credit TC

Budgetary Entry

480100 Undelivered Orders – Obligations, Unpaid

 490200 Delivered Orders – Obligations, Paid 

Proprietary Entry 

293000 Lessee Lease Liability

214000 (N) Accrued Interest Payable – Not Otherwise Classified

 101000 (G) Fund Balance With Treasury

310710 Unexpended Appropriations - Used - Disbursed 

 570010 Expended Appropriations - Disbursed

2,000

1,343

 657

2,000

2,000

2,000

2,000

B235

Ending Lease Liability Balance (USSGL 293000) = $77,513

7a. The Lessee records amortization of the right-to-use Lease Asset. ($94,131 / 5 Year Life of Lease / 12 months = $1,569 Straight-line Amortization per month.) 

A lease asset should be amortized in a systematic and rational manner over the shorter of: The lease term; OR the useful life of the underlying asset. (SFFAS 54, Par. 

50)

Lessee - Amortization of Lease Asset for Year 2, Month 1. Debit Credit TC

Budgetary Entry - None

Proprietary Entry

671300 Lessee Lease Amortization

 195900 Accumulated Amortization on Lessee Lease Assets

1,569

1,569

Ending Lease Asset Balance (USSGL 195000 - 195900) = $73,736
RIGHT-TO-USE LEASES GUIDANCE: BUDGETARY CAPITAL

Effective Fiscal 2024

 Page 38 of 60 November 2022

5b. The lessee records accrued interest for month 2 per the proprietary amortization schedule. The lessee should calculate the amortization of the discount on the lease 

liability and recognize that amount as interest expense for the period. (SFFAS 54, Par. 43)

Lessee - Accrual of Interest Expense for Year 2, Month 2. Debit Credit TC

Budgetary Entry

None

Proprietary Entry 

633000 Other Interest Expense

 214000 (N) Accrued Interest Payable – Not Otherwise Classified

646

646

B418

6b. The Lessee makes the monthly lease payment to Lessor and records the disbursement of appropriations for the fiscal year.

Lessee - Disbursement of Monthly Lease Payment (Budget Authority received up-front in Year 1.) Debit Credit TC

Budgetary Entry

480100 Undelivered Orders – Obligations, Unpaid

 490200 Delivered Orders – Obligations, Paid 

Proprietary Entry 

293000 Lessee Lease Liability

214000 (N) Accrued Interest Payable – Not Otherwise Classified

 101000 (G) Fund Balance With Treasury

310710 Unexpended Appropriations - Used - Disbursed 

 570010 Expended Appropriations - Disbursed

2,000

1,354

 646

2,000

2,000

2,000

2,000

B235

Ending Lease Liability Balance (USSGL 293000) = $76,159

7b. The Lessee records amortization of the right-to-use Lease Asset. ($94,131 / 5 Year Life of Lease / 12 months = $1,569 Straight-line Amortization per month.) 

A lease asset should be amortized in a systematic and rational manner over the shorter of: The lease term; OR the useful life of the underlying asset. (SFFAS 54, Par. 

50)

Lessee - Amortization of Lease Asset for Year 2, Month 2. Debit Credit TC

Budgetary Entry - None

Proprietary Entry

671300 Lessee Lease Amortization

 195900 Accumulated Amortization on Lessee Lease Assets

1,569

1,569

Ending Lease Asset Balance (USSGL 195000 - 195900) = $72,167
RIGHT-TO-USE LEASES GUIDANCE: BUDGETARY CAPITAL

Effective Fiscal 2024

 Page 39 of 60 November 2022

5c. The lessee records accrued interest for month 3 per the proprietary amortization schedule. The lessee should calculate the amortization of the discount on the lease 

liability and recognize that amount as interest expense for the period. (SFFAS 54, Par. 43)

Lessee - Accrual of Interest Expense for Year 2, Month 3. Debit Credit TC

Budgetary Entry

None

Proprietary Entry 

633000 Other Interest Expense

 214000 (N) Accrued Interest Payable – Not Otherwise Classified

635

635

B418

6c. The Lessee makes the monthly lease payment to Lessor and records the disbursement of appropriations for the fiscal year.

Lessee - Disbursement of Monthly Lease Payment (Budget Authority received up-front in Year 1.) Debit Credit TC

Budgetary Entry

480100 Undelivered Orders – Obligations, Unpaid

 490200 Delivered Orders – Obligations, Paid 

Proprietary Entry 

293000 Lessee Lease Liability

214000 (N) Accrued Interest Payable – Not Otherwise Classified

 101000 (G) Fund Balance With Treasury

310710 Unexpended Appropriations - Used - Disbursed 

 570010 Expended Appropriations - Disbursed

2,000

1,365

 635

2,000

2,000

2,000

2,000

B235

Ending Lease Liability Balance (USSGL 293000) = $74,794

7c. The Lessee records amortization of the right-to-use Lease Asset. ($94,131 / 5 Year Life of Lease / 12 months = $1,569 Straight-line Amortization per month.) 

A lease asset should be amortized in a systematic and rational manner over the shorter of: The lease term; OR the useful life of the underlying asset. (SFFAS 54, Par. 

50)

Lessee - Amortization of Lease Asset for Year 2, Month 3. Debit Credit TC

Budgetary Entry - None

Proprietary Entry

671300 Lessee Lease Amortization

 195900 Accumulated Amortization on Lessee Lease Assets

1,569

1,569

Ending Lease Asset Balance (USSGL 195000 - 195900) = $70,598
RIGHT-TO-USE LEASES GUIDANCE: BUDGETARY CAPITAL

Effective Fiscal 2024

 Page 40 of 60 November 2022

5d. The lessee records accrued interest for month 4 per the proprietary amortization schedule. The lessee should calculate the amortization of the discount on the lease 

liability and recognize that amount as interest expense for the period. (SFFAS 54, Par. 43)

Lessee - Accrual of Interest Expense for Year 2, Month 4. Debit Credit TC

Budgetary Entry

Proprietary Entry 

633000 Other Interest Expense

 214000 (N) Accrued Interest Payable – Not Otherwise Classified

623

623 B418

6d. The Lessee makes the monthly lease payment to Lessor and records the disbursement of appropriations for the fiscal year.

Lessee - Disbursement of Monthly Lease Payment (Budget Authority received up-front in Year 1.) Debit Credit TC

Budgetary Entry

480100 Undelivered Orders – Obligations, Unpaid

 490200 Delivered Orders – Obligations, Paid 

Proprietary Entry 

293000 Lessee Lease Liability

214000 (N) Accrued Interest Payable – Not Otherwise Classified

 101000 (G) Fund Balance With Treasury

310710 Unexpended Appropriations - Used - Disbursed 

 570010 Expended Appropriations - Disbursed

2,000

1,377

 623

2,000

2,000

2,000

 2,000

B235

Ending Lease Liability Balance (USSGL 293000) = $73,417

7d. The Lessee records amortization of the right-to-use Lease Asset. ($94,131 / 5 Year Life of Lease / 12 months = $1,569 Straight-line Amortization per month.) 

A lease asset should be amortized in a systematic and rational manner over the shorter of: The lease term; OR the useful life of the underlying asset. (SFFAS 54, Par. 

50)

Lessee - Amortization of Lease Asset for Year 2, Month 4. Debit Credit TC

Budgetary Entry - None

Proprietary Entry

671300 Lessee Lease Amortization

 195900 Accumulated Amortization on Lessee Lease Assets

1,569

1,569

Ending Lease Asset Balance (USSGL 195000 - 195900) = $69,029
RIGHT-TO-USE LEASES GUIDANCE: BUDGETARY CAPITAL

Effective Fiscal 2024

 Page 41 of 60 November 2022

5e. The lessee records accrued interest for month 5 per the proprietary amortization schedule. The lessee should calculate the amortization of the discount on the lease 

liability and recognize that amount as interest expense for the period. (SFFAS 54, Par. 43)

Lessee - Accrual of Interest Expense for Year 2, Month 5. Debit Credit TC

Budgetary Entry

None

Proprietary Entry 

633000 Other Interest Expense

 214000 (N) Accrued Interest Payable – Not Otherwise Classified

612

612

B418

6e. The Lessee makes the monthly lease payment to Lessor and records the disbursement of appropriations for the fiscal year.

Lessee - Disbursement of Monthly Lease Payment (Budget Authority received up-front in Year 1.) Debit Credit TC

Budgetary Entry

480100 Undelivered Orders – Obligations, Unpaid

 490200 Delivered Orders – Obligations, Paid 

Proprietary Entry 

293000 Lessee Lease Liability

214000 (N) Accrued Interest Payable – Not Otherwise Classified

 101000 (G) Fund Balance With Treasury

310710 Unexpended Appropriations - Used - Disbursed

 570010 Expended Appropriations - Disbursed

2,000

1,388

 612

2,000

2,000

2,000

 2,000

B235

Ending Lease Liability Balance (USSGL 293000) = $72,029

7e. The Lessee records amortization of the right-to-use Lease Asset. ($94,131 / 5 Year Life of Lease / 12 months = $1,569 Straight-line Amortization per month.) 

A lease asset should be amortized in a systematic and rational manner over the shorter of: The lease term; OR the useful life of the underlying asset. (SFFAS 54, Par. 

50)

Lessee - Amortization of Lease Asset for Year 2, Month 5. Debit Credit TC

Budgetary Entry - None

Proprietary Entry

671300 Lessee Lease Amortization

 195900 Accumulated Amortization on Lessee Lease Assets

1,569

1,569

Ending Lease Asset Balance (USSGL 195000 - 195900) = $67,460
RIGHT-TO-USE LEASES GUIDANCE: BUDGETARY CAPITAL

Effective Fiscal 2024

 Page 42 of 60 November 2022

5f. The lessee records accrued interest for month 6 per the proprietary amortization schedule. The lessee should calculate the amortization of the discount on the lease 

liability and recognize that amount as interest expense for the period. (SFFAS 54, Par. 43)

Lessee - Accrual of Interest Expense for Year 2, Month 6. Debit Credit TC

Budgetary Entry

Proprietary Entry 

633000 Other Interest Expense

 214000 (N) Accrued Interest Payable – Not Otherwise Classified

600

600

B418

6f. The Lessee makes the monthly lease payment to Lessor and records the disbursement of appropriations for the fiscal year.

Lessee - Disbursement of Monthly Lease Payment (Budget Authority received up-front in Year 1.) Debit Credit TC

Budgetary Entry

480100 Undelivered Orders – Obligations, Unpaid

 490200 Delivered Orders – Obligations, Paid 

Proprietary Entry 

293000 Lessee Lease Liability

214000 (N) Accrued Interest Payable – Not Otherwise Classified

 101000 (G) Fund Balance With Treasury

310710 Unexpended Appropriations - Used - Disbursed 

 570010 Expended Appropriations - Disbursed

2,000

1,400

 600

2,000

2,000

2,000

 2,000

B235

Ending Lease Liability Balance (USSGL 293000) = $70,629

7f. The Lessee records amortization of the right-to-use Lease Asset. ($94,131 / 5 Year Life of Lease / 12 months = $1,569 Straight-line Amortization per month.) 

A lease asset should be amortized in a systematic and rational manner over the shorter of: The lease term; OR the useful life of the underlying asset. (SFFAS 54, Par. 

50)

Lessee - Amortization of Lease Asset for Year 2, Month 6. Debit Credit TC

Budgetary Entry - None

Proprietary Entry

671300 Lessee Lease Amortization

 195900 Accumulated Amortization on Lessee Lease Assets

1,569

1,569

Ending Lease Asset Balance (USSGL 195000 - 195900) = $65,892
RIGHT-TO-USE LEASES GUIDANCE: BUDGETARY CAPITAL

Effective Fiscal 2024

 Page 43 of 60 November 2022

*(For simplicity, the recurring entries of Lessee Payments for Months 7-12 are not illustrated, but amounts can be seen in the amortization table.)*

8. The Lessee records the closing of lease and interest expenses to cumulative results of operations.

Lessee Debit Credit TC

Budgetary Entry

None

Proprietary Entry

331000 Cumulative Results of Operations

 671300 Lessee Lease Amortization

 633000 (N) Other Interest Expense

 

25,952

 18,826

 7,126

F336

9. The Lessee records the closing of expended appropriation to cumulative results of operations, along with the closing of fiscal-year activity to unexpended 

appropriations.

Lessee Debit Credit TC

Budgetary Entry

None

Proprietary Entry

570010 Expended Appropriations – Disbursed

 331000 Cumulative Results of Operations

310000 Unexpended Appropriations – Cumulative

 310710 Unexpended Appropriations - Used – Disbursed

310100 (G) Unexpended Appropriations – Appropriations Received

 310000 Unexpended Appropriations - Cumulative

24,000

24,000

7,126

24,000

24,000

7,126

F336

F342

F342
RIGHT-TO-USE LEASES GUIDANCE: BUDGETARY CAPITAL

Effective Fiscal 2024

 Page 44 of 60 November 2022

10. The Lessee records the closing of paid delivered orders to total actual resources.

Lessee Debit Credit TC

Budgetary Entry

490200 Delivered Orders – Obligations, Paid

 420100 Total Actual Resources, Collected

Proprietary Entry

None

24,000

24,000

F314

11. The Lessee records the consolidation of actual net-funded resources.

Lessee Debit Credit TC

Budgetary Entry

420100 Total Actual Resources, Collected 

 411900 Other Appropriations Realized

 

Proprietary Entry

None

7,126

7,126

F302
RIGHT-TO-USE LEASES GUIDANCE: BUDGETARY CAPITAL

Effective Fiscal 2024

 Page 45 of 60 November 2022

Lessor Accounting

1. In Year 2, the Lessor records anticipated collections. (The amount of expected Year 2 monthly payments is $24,000.)

Lessor Debit Credit TC

Budgetary Entry

406000 Anticipated Collections From Non-Federal Sources

 449000 Anticipated Resources - Unapportioned Authority

Proprietary Entry

None

24,000

24,000

A140

2. In Year 2, the Lessor records the apportionment approval by OMB of anticipated authority.

Lessor Debit Credit TC

Budgetary Entry

449000 Anticipated Resources - Unapportioned Authority

 459000 Apportionments - Anticipated Resources - Programs Subject to Apportionment

Proprietary Entry

None

24,000

24,000 A118
RIGHT-TO-USE LEASES GUIDANCE: BUDGETARY CAPITAL

Effective Fiscal 2024

 Page 46 of 60 November 2022

4a. The Lessor recognizes interest revenue for the amortization of the discount on the lease receivable for month 1. (SFFAS 54, Par. 60)

Lessor - Accrual of Interest Revenue for Year 2, Month 1 Debit Credit TC

Budgetary Entry

None

Proprietary Entry 

134000 Interest Receivable - Not Otherwise Classified

 531000 Interest Revenue - Other

657

657

5a. In month 1, the Lessee pays monthly lease payment to Lessor, and the Lessor records the receipt of payment. The Lessor allots the funds.

Lessor - Receipt of Year 2, Month 1 Lease Payment Debit Credit TC

Budgetary Entry

426600 Other Actual Business-Type Collections From Non-Federal Sources

 406000 Anticipated Collections From Non-Federal Sources

459000 Apportionments - Anticipated Resources - Programs Subject to Apportionment

 451000 Apportionments 

451000 Apportionments

 461000 Allotments – Realized Resources 

Proprietary Entry

101000 (G) Fund Balance With Treasury

 134000 Interest Receivable - Not Otherwise Classified

 193000 Lessor Lease Receivable

2,000

2,000

2,000

2,000

2,000

2,000

2,000

 657

 1,343

C109

A123

A120

Ending Lease Receivable Balance of USSGL 193000 = $77,513

6a. The Lessor recognizes revenue from the measurement of the lease receivable as earned revenue for the reporting period via straightline amortization. A Lessor should 

amortize the unearned revenue (recognizing it as earned revenue) in a systematic and rational manner of life of the lease. (SFFAS 60, Par. 26)

Lessor - Recognition of Unearned Revenue for Year 2, Month 1 Debit Credit TC

Budgetary Entry

None

Proprietary Entry 

233000 Lessor Lease Unearned Revenue

 593300 Amortization of Unearned Lessor Revenue

1,569

1,569
RIGHT-TO-USE LEASES GUIDANCE: BUDGETARY CAPITAL

Effective Fiscal 2024

 Page 47 of 60 November 2022

4b. The Lessor recognizes interest revenue for the amortization of the discount on the lease receivable for month 2. (SFFAS 54, Par. 60)

Lessor - Accrual of Interest Revenue for Year 2, Month 2 Debit Credit TC

Budgetary Entry

None

Proprietary Entry 

134000 Interest Receivable - Not Otherwise Classified

 531000 Interest Revenue - Other

646

646

5b. In month 2, the Lessee pays monthly lease payment to Lessor, and the Lessor records the receipt of payment. The Lessor allots the funds.

Lessor - Receipt of Year 2, Month 2 Lease Payment Debit Credit TC

Budgetary Entry

426600 Other Actual Business-Type Collections From Non-Federal Sources

 406000 Anticipated Collections From Non-Federal Sources

459000 Apportionments - Anticipated Resources - Programs Subject to Apportionment

 451000 Apportionments 

451000 Apportionments

 461000 Allotments – Realized Resources 

Proprietary Entry

101000 (G) Fund Balance With Treasury

 134000 Interest Receivable - Not Otherwise Classified

 193000 Lessor Lease Receivable

2,000

2,000

2,000

2,000

2,000

2,000

2,000

 646

 1,354

C109

A123

A120

Ending Lease Receivable Balance of USSGL 193000 = $76,159

6b. The Lessor recognizes revenue from the measurement of the lease receivable as earned revenue for the reporting period via straightline amortization. A Lessor should 

amortize the unearned revenue (recognizing it as earned revenue) in a systematic and rational manner of life of the lease. (SFFAS 60, Par. 26)

Lessor - Recognition of Unearned Revenue for Year 2, Month 2 Debit Credit TC

Budgetary Entry

None

Proprietary Entry 

233000 Lessor Lease Unearned Revenue

 593300 Amortization of Unearned Lessor Revenue

1,569

1,569
RIGHT-TO-USE LEASES GUIDANCE: BUDGETARY CAPITAL

Effective Fiscal 2024

 Page 48 of 60 November 2022

4c. The Lessor recognizes interest revenue for the amortization of the discount on the lease receivable for month 3. (SFFAS 54, Par. 60)

Lessor - Accrual of Interest Revenue for Year 2, Month 3 Debit Credit TC

Budgetary Entry

None

Proprietary Entry 

134000 Interest Receivable - Not Otherwise Classified

 531000 Interest Revenue - Other

635

635

5c. In month 3, the Lessee pays monthly lease payment to Lessor, and the Lessor records the receipt of payment. The Lessor allots the funds.

Lessor - Receipt of Year 2, Month 3 Lease Payment Debit Credit TC

Budgetary Entry

426600 Other Actual Business-Type Collections From Non-Federal Sources

 406000 Anticipated Collections From Non-Federal Sources

459000 Apportionments - Anticipated Resources - Programs Subject to Apportionment

 451000 Apportionments 

451000 Apportionments

 461000 Allotments – Realized Resources 

Proprietary Entry

101000 (G) Fund Balance With Treasury

 134000 Interest Receivable - Not Otherwise Classified

 193000 Lessor Lease Receivable

2,000

2,000

2,000

2,000

2,000

2,000

2,000

 635

 1,365

C109

A123

A120

Ending Lease Receivable Balance of USSGL 193000 = $74,794

6c. The Lessor recognizes revenue from the measurement of the lease receivable as earned revenue for the reporting period via straightline amortization. A Lessor should 

amortize the unearned revenue (recognizing it as earned revenue) in a systematic and rational manner of life of the lease. (SFFAS 60, Par. 26)

Lessor - Recognition of Unearned Revenue for Year 2, Month 3 Debit Credit TC

Budgetary Entry

None

Proprietary Entry 

233000 Lessor Lease Unearned Revenue

 593300 Amortization of Unearned Lessor Revenue

1,569

1,569
RIGHT-TO-USE LEASES GUIDANCE: BUDGETARY CAPITAL

Effective Fiscal 2024

 Page 49 of 60 November 2022

4d. The Lessor recognizes interest revenue for the amortization of the discount on the lease receivable for month 4. (SFFAS 54, Par. 60)

Lessor - Accrual of Interest Revenue for Year 2, Month 4 Debit Credit TC

Budgetary Entry

None

Proprietary Entry 

134000 Interest Receivable - Not Otherwise Classified

 531000 Interest Revenue - Other

623

623

5d. In month 4, the Lessee pays monthly lease payment to Lessor, and the Lessor records the receipt of payment. The Lessor allots the funds.

Lessor - Receipt of Year 2, Month 4 Lease Payment Debit Credit TC

Budgetary Entry

426600 Other Actual Business-Type Collections From Non-Federal Sources

 406000 Anticipated Collections From Non-Federal Sources

459000 Apportionments - Anticipated Resources - Programs Subject to Apportionment

 451000 Apportionments 

451000 Apportionments

 461000 Allotments – Realized Resources 

Proprietary Entry

101000 (G) Fund Balance With Treasury

 134000 Interest Receivable - Not Otherwise Classified

 193000 Lessor Lease Receivable

2,000

2,000

2,000

2,000

2,000

2,000

2,000

 623

 1,377

C109

A123

A120

Ending Lease Receivable Balance of USSGL 193000 = $73,417

6d. The Lessor recognizes revenue from the measurement of the lease receivable as earned revenue for the reporting period via straightline amortization. A Lessor should 

amortize the unearned revenue (recognizing it as earned revenue) in a systematic and rational manner of life of the lease. (SFFAS 60, Par. 26)

Lessor - Recognition of Unearned Revenue for Year 2, Month 4 Debit Credit TC

Budgetary Entry

None

Proprietary Entry 

233000 Lessor Lease Unearned Revenue

 593300 Amortization of Unearned Lessor Revenue

1,569

1,569
RIGHT-TO-USE LEASES GUIDANCE: BUDGETARY CAPITAL

Effective Fiscal 2024

 Page 50 of 60 November 2022

4e. The Lessor recognizes interest revenue for the amortization of the discount on the lease receivable for month 5. (SFFAS 54, Par. 60)

Lessor - Accrual of Interest Revenue for Year 2, Month 5 Debit Credit TC

Budgetary Entry

None

Proprietary Entry 

134000 Interest Receivable - Not Otherwise Classified

 531000 Interest Revenue - Other

612

612

5e. In month 5, the Lessee pays monthly lease payment to Lessor, and the Lessor records the receipt of payment. The Lessor allots the funds.

Lessor - Receipt of Year 2, Month 5 Lease Payment Debit Credit TC

Budgetary Entry

426600 Other Actual Business-Type Collections From Non-Federal Sources

 406000 Anticipated Collections From Non-Federal Sources

459000 Apportionments - Anticipated Resources - Programs Subject to Apportionment

 451000 Apportionments 

451000 Apportionments

 461000 Allotments – Realized Resources 

Proprietary Entry

101000 (G) Fund Balance With Treasury

 134000 Interest Receivable - Not Otherwise Classified

 193000 Lessor Lease Receivable

2,000

2,000

2,000

2,000

2,000

2,000

2,000

 612

 1,388

C109

A123

A120

Ending Lease Receivable Balance of USSGL 193000 = $72,029

6e. The Lessor recognizes revenue from the measurement of the lease receivable as earned revenue for the reporting period via straightline amortization. A Lessor should 

amortize the unearned revenue (recognizing it as earned revenue) in a systematic and rational manner of life of the lease. (SFFAS 60, Par. 26)

Lessor - Recognition of Unearned Revenue for Year 2, Month 5 Debit Credit TC

Budgetary Entry

None

Proprietary Entry 

233000 Lessor Lease Unearned Revenue

 593300 Amortization of Unearned Lessor Revenue

1,569

1,569
RIGHT-TO-USE LEASES GUIDANCE: BUDGETARY CAPITAL

Effective Fiscal 2024

 Page 51 of 60 November 2022

4f. The Lessor recognizes interest revenue for the amortization of the discount on the lease receivable for month 6. (SFFAS 54, Par. 60)

Lessor - Accrual of Interest Revenue for Year 2, Month 6 Debit Credit TC

Budgetary Entry

None

Proprietary Entry 

134000 Interest Receivable - Not Otherwise Classified

 531000 Interest Revenue - Other

600

600

5f. In month 6, the Lessee pays monthly lease payment to Lessor, and the Lessor records the receipt of payment. The Lessor allots the funds.

Lessor - Receipt of Year 2, Month 6 Lease Payment Debit Credit TC

Budgetary Entry

426600 Other Actual Business-Type Collections From Non-Federal Sources

 406000 Anticipated Collections From Non-Federal Sources

459000 Apportionments - Anticipated Resources - Programs Subject to Apportionment

 451000 Apportionments 

451000 Apportionments

 461000 Allotments – Realized Resources 

Proprietary Entry

101000 (G) Fund Balance With Treasury

 134000 Interest Receivable - Not Otherwise Classified

 193000 Lessor Lease Receivable

2,000

2,000

2,000

2,000

2,000

2,000

2,000

 600

 1,400

C109

A123

A120

Ending Lease Receivable Balance of USSGL 193000 = $70,629

6f. The Lessor recognizes revenue from the measurement of the lease receivable as earned revenue for the reporting period via straightline amortization. A Lessor should 

amortize the unearned revenue (recognizing it as earned revenue) in a systematic and rational manner of life of the lease. (SFFAS 60, Par. 26)

Lessor - Recognition of Unearned Revenue for Year 2, Month 6 Debit Credit TC

Budgetary Entry

None

Proprietary Entry 

233000 Lessor Lease Unearned Revenue

 593300 Amortization of Unearned Lessor Revenue

1,569

1,569
RIGHT-TO-USE LEASES GUIDANCE: BUDGETARY CAPITAL

Effective Fiscal 2024

 Page 52 of 60 November 2022

7. In Year 2, the Lessor records depreciation expense on equipment it owns (the underlying asset within the lease.) $300,000 cost / 20-year useful life = $15,000.

Lessor Debit Credit TC

Budgetary Entry

None

Proprietary Entry

671000 (N) Depreciation, Amortization, and Depletion 

 175900 Accumulated Depreciation on Equipment 

15,000

15,000

E120

8. The Lessor records the closing of revenue to cumulative results of operations.

Lessor Debit Credit TC

Budgetary Entry

None 

Proprietary Entry

593300 Amortization of Unearned Lessor Revenue

531000 (N) Interest Revenue - Other

 331000 Cumulative Results of Operations 

18,826

 7,126

25,952

F336

10. The Lessor records the closing of depreciation expense to cumulative results of operations in Year 2.

Lessor Debit Credit TC

Budgetary Entry

None 

Proprietary Entry

331000 Cumulative Results of Operations

 671000 Depreciation, Amortization, and Depletion 

15,000

15,000

F336

11. The Lessor records the closing of unobligated balances in programs subject to apportionment to unapportioned authority.
RIGHT-TO-USE LEASES GUIDANCE: BUDGETARY CAPITAL

Effective Fiscal 2024

 Page 53 of 60 November 2022

Lessor Debit Credit TC

Budgetary Entry

461000 Allotments – Realized Resources 

 445000 Unapportioned – Unexpired Authority

Proprietary Entry

None

24,000

24,000

F308

12. The Lessor records the consolidation of actual net-funded resources.

Lessor Debit Credit TC

Budgetary Entry

420100 Total Actual Resources, Collected 

 426600 Other Actual Business-Type Collections From Non-Federal Sources

 

Proprietary Entry

None

24,000

24,000

F302
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Fiscal Year 2 Post-Closing Adjusted Trial Balance:

FISCAL YEAR 2 POST-CLOSING LESSEE LESSOR

Account Description Debit Credit Debit Credit

Budgetary

420100 Total Actual Resources, Collected 61,983 - 48,000 -

445000 Unapportioned – Unexpired Authority - - - 48,000

490100 Delivered Orders, Obligations Unpaid - 61,983 - -

Total 61,983 61,983 48,000 48,000

Proprietary

101000 (G) Fund Balance With Treasury 61,983 - 48,000 -

175000 Equipment - - 300,000 -

175900 Acc. Depreciation on Equipment - - - 180,000

193000 Lessor Lease Receivable - - 61,983 -

193900 Allowance for Loss on Lease Receivable - - - 2,000

195000 Lessee Right-To-Use Lease Asset 94,131 - - -

195900 Accumulated Amortization on Lessee Lease Assets - 37,652 - -

233000 Unearned Lessor Revenue - - - 54,479

293000 Lessee Lease Liability - 61,983 - -

310000 Unexpended Appropriations - Cumulative - 61,983 - -

331000 Cumulative Results of Operations 5,504 - - 173,504

Total 161,618 161,618 409,983 409,983
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Year 2 Financial Statements:

STANDARDIZED BALANCE SHEET – YEAR 2

Line No. YEAR 2 LESSEE LESSOR

Assets (Note 2)

Intra-governmental

1 Fund Balance with Treasury (Note 3) (101000) 61,983 48,000

7 Total intra-governmental assets 61,983 48,000

Other than intra-governmental

12 General and right-to-use property, plant, and equipment, net (Note 10) (175000E, 175900E, 195000E, 

195900E) 56,479 135,000

17 Other assets (Note 12) (193000E, 193900E) - 59,983

18 Total other than intra-governmental 56,479 179,983

19 Total assets 118,462 227,983

Liabilities (Note 13)

Other than intra-governmental

36 Advances from others and deferred revenue (233000N) - 54,479

37 Other liabilities (Notes 18, 19, and 20) (293000E) 61,983 -

38 Total other than intra-governmental 61,983 54,479

39 Total liabilities 61,983 54,479

Net position

41.2 Unexpended appropriations - Funds from other than Dedicated Collections (Note 21) (310000E) 61,983 -

42.2 Cumulative results of operations - Funds from other than Dedicated Collections (331000E) (5,504) 173,504

43 Total net position 56,479 173,504

44 Total liabilities and net position 118,462 227,983

STATEMENT OF NET COST – YEAR 2

Line No. YEAR 2 LESSEE LESSOR

Gross Program Costs (Note 21):

1 Gross costs (633000E, 671000E, 671300E, 693000E) 25,952 15,000

2 Less: earned revenue (531000E, 593000E, 593300E) - 25,952

3 Net program costs 25,952 (10,952)

5 Net program costs including Assumption Changes: 25,952 (10,952)

8 Net cost of operations 25,952 (10,952)
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STATEMENT OF CHANGES IN NET POSITION – YEAR 2

Line No. YEAR 2 LESSEE LESSOR

Unexpended Appropriations:

1 Beginning Balance (310000B) 78,857 -

3 Beginning balance, as adjusted 78,857 -

4 Appropriations received (310100E) 7,126 -

7 Appropriations used (310700E, 310710E) 24,000 -

8 Net Change in Unexpended Appropriations (calc.) 24,000 -

9 Total Unexpended Appropriations – Ending (calc.) 61,983 -

Cumulative Results of Operations:

10 Beginning Balances (331000B) (3,552) 162,552

12 Beginning balances, as adjusted (3,552) 162,552

14 Appropriations used (570000E, 570010E) 24,000 -

21 Revenue From (Net Cost of) Operations (+/-) (25,952) 10,952

22 Net Change in Cumulative Results of Operations (25,952) 10,952

23 Cumulative Results of Operations – Ending (5,504) 173,504

24 Net Position (calc.) 56,479 173,504

Year 2 Reclassified Financial Statements:

STANDARDIZED BALANCE SHEET – YEAR 2

Line No. YEAR 2 LESSEE LESSOR

Assets (Note 2)

Intra-governmental

1 Fund Balance with Treasury (Note 3) (101000) 61,983 48,000

7 Total intra-governmental assets 61,983 48,000

Other than intra-governmental

12 General and right-to-use property, plant, and equipment, net (Note 10) (175000E, 175900E, 195000E, 

195900E) 56,479 135,000

17 Other assets (Note 12) (193000E, 193900E) - 59,983

18 Total other than intra-governmental 56,479 179,983

19 Total assets 118,462 227,983

Liabilities (Note 13)
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Other than intra-governmental

36 Advances from others and deferred revenue (233000N) - 54,479

37 Other liabilities (Notes 18, 19, and 20) (293000E) 61,983 -

38 Total other than intra-governmental 61,983 54,479

39 Total liabilities 61,983 54,479

Net position

41.2 Unexpended appropriations - Funds from other than Dedicated Collections (Note 21) (310000E) 61,983 -

42.2 Cumulative results of operations - Funds from other than Dedicated Collections (331000E) (5,504) 173,504

43 Total net position 56,479 173,504

44 Total liabilities and net position 118,462 227,983

RECLASSIFIED STATEMENT OF NET COST – YEAR 2

Line No. YEAR 2 LESSEE LESSOR

1 Gross cost

2 Non-federal gross cost (633000E, 671000E, 671300E, 693000E) 25,952 15,000

6 Total non-federal gross cost (calc.) 25,952 15,000

9 Department total gross cost (calc.) 25,952 15,000

10 Earned revenue

11 Non-federal earned revenue (531000E, 593000E, 593300E) - 25,952

14 Department total earned revenue (calc.) - 25,952

15 Net cost of operations (calc.) 25,952 (10,952)

RECLASSIFIED STATEMENT OF OPERATIONS AND CHANGES IN NET POSITION – YEAR 2

Line No. YEAR 2 LESSEE LESSOR

1 Net position, beginning of period (310000B, 331000B) 75,305 162,552

7 Financing sources:

7.1 Appropriations received as adjusted (rescissions and other adjustments) (RC 41)/1 (310100E) 7,126 -

7.2 Appropriations used (RC 39) (310700E, 310710E) 24,000 -

7.3 Appropriations expended (RC 38)/1 (570000E, 570010E) (24,000) -

7.30 Total financing sources (calc.) 82,431 -

8 Revenue From (Net cost of) Operations (+/-) (25,952) 10,952

9 Net position, end of period (calc.) 56,479 173,504
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STATEMENT OF BUDGETARY RESOURCES – YEAR 3

Line 

No.

YEAR 3 LESSEE LESSOR

Budgetary resources:

1071 Unobligated balance from prior year budget authority, net (discretionary and mandatory) (Note 25)

(420100B, 490100B, 490100E)

19,820 47,964

1290 Appropriations (discretionary and mandatory) (411900E) 4,162 -

1890 Spending authority from offsetting collection (discretionary and mandatory) (426600E) - 23,982

1910 Total budgetary resources (calc.) 23,982 71,946

Status of budgetary resources:

2190 New obligations and upward adjustments (total) (Note 31) (490100E – 490100B, 490200E) 4,162 -

Unobligated balance, end of year:

2204 Apportioned, unexpired account (461000E) - 23,982

2405 Unapportioned, unexpired accounts (445000E) - 47,964

2412 Unexpired unobligated balance, end of year (calc.) - 71,946

2490 Unobligated balance, end of year (total) - 71,946

2500 Total budgetary resources (calc.) 4,162 71,946

Outlays, Net and Disbursements, Net

4190 Outlays, net (total) (discretionary and mandatory) (426600E, 490200E) 23,982 (23,982)
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SF 133 AND SCHEDULE P – REPORT ON BUDGET EXECUTION AND BUDGETARY RESOURCES AND BUDGET PROGRAM 

AND FINANCING SCHEDULE – YEAR 3

Line 

No.

YEAR 3 LESSEE LESSOR

BUDGETARY RESOURCES SF 133 Schedule P SF 133 Schedule 

P

0900 Total new obligations, unexpired accounts (490200E) - 23,982 - -

1000 Unobligated balance brought forward, Oct 1 (490100B) 65,602 65,602 47,964 47,964

1070 Unobligated balance (total) (calc.) 65,602 65,602 47,964 47,964

Budget authority:

Appropriations:

Discretionary:

1100 Appropriation (411900E) 4,162 4,162 - -

1160 Appropriation, discretionary (total) 4,162 4,162 - -

1700 Collected (426600E) - - 23,982 23,982

1750 Spending authority from offsetting collections, discretionary (total) - - 23,982 23,982

1900 Budget authority (total) 4,162 4,162 23,982 23,982

1910 Total budgetary resources (calc.) 69,764 - 71,946 -

1930 Total budgetary resources available - 69,764 - 71,946

Memorandum (non-add) entries:

1941 Unexpired unobligated balance, end of year (445000E, 461000E) - - - 71,946

STATUS OF BUDGETARY RESOURCES

New obligations and upward adjustments:

Direct:

2002 Category B (by project) (490100E – 490100B, 490200E) 69,764 - - -

2004 Direct obligations (total) (calc.) 69,764 - - -

2170 New obligations, unexpired accounts (490100E – 490100B, 490200E) 23,982 - - -

2190 New obligations and upward adjustments (total) 23,982 - - -

2201 Available in the current period (461000E) - - 23,982 -

2403 Other (445000E) - - 47,964

2412 Unexpired unobligated balance: end of year (calc.) - - 71,946 -
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2490 Unobligated balance, end of year (total) - - 71,946 -

2500 Total budgetary resources (calc.) 69,794 - 71,946 -

Memorandum (non-add) entries:

2501 Subject to apportionment – excluding anticipated amounts (445000E, 461000E) - - 71,946 -

CHANGE IN OBLIGATED BALANCE

Unpaid obligations:

3000 Unpaid obligations, brought forward, Oct 1 (490100B) 65,602 65,602 - -

3010 New obligations, unexpired accounts (490100E – 490100B, 490200E) 69,794 69,794 - -

3020 Outlays (gross) (-) (490200E) (23,982) (23,982) - -

3050 Unpaid obligations, end of year (490100E) 45,782 45,782

3200 Obligated balance, end of year (= or -) 45,782 45,782 - -

BUDGET AUTHORITY AND OUTLAYS, NET

Discretionary:

4000 Budget authority, gross (calc.) 4,162 4,162 23,982 23,982

Outlays, gross

4010 Outlays from new discretionary authority (490200E) 23,982 23,982 - -

4020 Outlays, gross (total) 23,982 23,982 - -

Offsets against gross budget authority and outlays:

Offsetting collections (collected) from:

4033 Non-Federal sources (-) (426600E) - - (23,982) (23,982)

4040 Offsets against gross budget authority and outlays (-) (calc.) - - (23,982) (23,982)

4070 Budget authority, net (discretionary) (calc.) 4,162 4,162 23,982 23,982

4080 Outlays, net (discretionary) (calc.) 23,982 23,982 (23,982) (23,982)

4180 Budget authority, net (total) (calc.) 4,162 4,162 (23,982) (23,982)

4190 Outlays, net (total) (calc.) 23,982 23,982 (23,982) (23,982)

Unobligated balance:

5311 Direct unobligated balance, start of year (420100B, 490100B) - - 47,964 47,964

5313 Discretionary unobligated balance, start of years (420100B) - - 47,964 47,964

5321 Direct unobligated balance, end of year (445000E, 461000E) - - 71,946 71,946

5323 Discretionary unobligated balance, end of year (445000E, 461000E) - - 71,946 71,946