Right-to-Use Lease Asset
Category
GASB 87/96
The right-to-use lease asset is the GASB 87 equivalent of the right-of-use asset under ASC 842. It represents the lessee's right to use an underlying asset for the lease term and is classified as an intangible asset, not a tangible asset. It is measured at the lease liability amount plus any prepayments and initial direct costs.
Why it matters
The intangible classification is a key difference from private-sector standards. Under ASC 842, the ROU asset sits with property and equipment on the balance sheet. Under GASB 87, the right-to-use asset is an intangible asset reported in a separate line item. This affects balance sheet presentation, capital asset reporting, and how the asset flows through government financial statements, including the statement of net position.
How Arvexi handles this
Arvexi classifies and presents right-to-use lease assets as intangible assets for GASB reporters, separate from tangible capital assets. The platform generates the correct balance sheet presentation, amortization schedules, and note disclosures consistent with GASB 87 requirements, including the intangible asset classification that government auditors verify.
Explore how Arvexi automates this: Lease Accounting · Lease Review