In accounting for operating leases, the rental payments should be recognized as expenditures in a governmental fund and as expenses in the government-wide statement of activities in the periods in which they apply.

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In governmental accounting, operating lease payments are recognized as expenditures in the governmental fund financial statements when the payments are due or have been made, and as expenses in the government-wide statement of activities on an accrual basis in the periods to which they apply, reflecting the use of the leased asset over time.

In Accounting for Operating Leases, the Rental Payments Should Be