Statewide Financial Reporting

This policy establishes the capitalization threshold for lessees that report leases and Subscription-Based IT Arrangements (SBITAs) under GASB Statement 87, Leases, and GASB Statement 96, SBITAs. The Procedures section below discusses incremental borrowing rates for lessors and lessees when an interest rate is not explicitly stated in a leasing or subscription contract or when an implicit rate cannot be determined.

GASB Statement No. 39 impacts colleges and universities that have foundations and similarly affiliated organizations whose financial data is not currently blended in the institution's annual report. These organizations must be included as part of the institution's financial reporting entity (i.e., as discretely presented component units) if they are found to be "significant." The University of North Carolina General Administration and the Community College System Office have established a uniform threshold for identifying which organizations are "significant." Under this threshold, organizations whose assets or revenues are 5% or greater of the institution's assets or revenues will be considered "significant" to the institution.

This policy applies to reporting units included in the State’s Annual Comprehensive Financial Report (ACFR) that have separately issued financial statements audited by a private CPA firm and which meet at least one of the following enclosed criteria.

The following standards should be followed in the preparation of separately issued financial statements for licensing boards of the State of North Carolina ("Boards").

The following applies to separately issued and audited GAAP-based fund (or departmental) financial statements issued for reporting units that are not legally separate.

The State of North Carolina recognizes a fiscal year beginning July 1 and ending June 30. Budgetary reporting, budgetary control, and financial reporting in accordance with GAAP are based on this accounting cycle.