Oregon State University

502: Lease Reporting

Fiscal Operations Manual
Section 500: Financial Accounting and Analysis
Effective: 01/01/2003
Revised: 08/15/2013

Year-end information regarding capital leases and operating leases is to be provided to the Office of Business Affairs by the dates specified in the Year-End Close Instructions so OSU can comply with their responsibilities to the OUS Controller’s Division per OUS Fiscal Policy Manual 05.281 Accounting for Leases.

For financial accounting and reporting purposes, the lease is a "capital lease" if:

A. the fair market value of the property at the inception of the lease meets or exceeds the capitalization threshold of $5,000,

B. the lease is non-cancelable, and

C. a lease/purchase or capital lease has at least one of the following characteristics:

  • The lease transfers ownership of the property to OSU by the end of the lease term;
  • The lease contains a  bargainpurchase option;
  • The lease  term is equal to  75 percent or more of the useful life of the leased equipment/property
  • The total of all lease payments (excluding insurance and maintenance costs and taxes) is greater than or equal to 90 percent of the fair market value of the leased equipment/property. 

If a lease does not meet the above criteria, it should be treated as an “operating lease”.

The Real Property Office facilitates the sale, acquisition, and lease of University property and manages the drafting and legal processing of real property related documents.  All Lease/Purchase agreements must be processed by a PaCS University Contract Officer.

For further information on equipment leasing/purchase see PRO 204: Lease-Purchase in the Property Management Manual.

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