Commentary
By late April, five of Orange County’s 34 cities had not posted their Annual Comprehensive Financial Reports (ACFRs) for the year ending June 30, 2022, on their websites. They are usually completed by December of the same year. By the end of May, the last one was finally posted. The city of Laguna Beach’s auditor’s report was dated May 25, 2023. But, the last shall be first, based on the results.
When asked for an explanation for the four-month delay, the reasons provided included a new Government Accounting Standards Board promulgation, GASB 87, which deals with leases. This new statement requires management to re-characterize leases from annual expenditures to principal and interest payments on a loan. Leases have always been a financing technique, and the accounting profession in the governmental space must now acknowledge that something was acquired using a form of debt, requiring the recognition of an asset and the related liability….