Conform The Term Lease Purchase To Accounting Standards

The state controller is required to prescribe a unified system of accounts and prepare financial statements based on systems set forth by the governmental accounting standards board (GASB). Statement number 87 by GASB, which affects state and local government fiscal years after June 15, 2021, requires that a contract that transfers ownership of an asset be accounted for and reported as a financed purchase or sale of an asset, regardless of whether the contract is labeled by the parties as a lease.Effective July 1, 2021, the act replaces the term "lease-purchase agreement", and, as necessary to effectuate the purpose of the act, substantially similar terms, with "financed purchase of an asset or certificate of participation agreement", and, as necessary to effectuate the intent of the act, substantially similar terms, throughout the Colorado Revised Statutes to clarify that, in accordance with GASB requirements, any such state or local public contract is to be accounted for and reported by the state controller as a financed purchase or sale of the underlying asset rather than as a lease.(Note: This summary applies to this bill as enacted.)