How GASB 104 Shapes Future Government Accounting Standards

The Governmental Accounting Standards Board (GASB) establishes authoritative accounting and financial reporting standards for state and local governments to improve transparency, accountability, and decision-usefulness for financial statement users. In September 2024, GASB issued Statement No. 104, Disclosure of Certain Capital Assets, continuing its ongoing effort to modernize capital asset reporting and address disclosure issues that were not explicitly resolved under prior standards.

GASB 104 is effective for fiscal years beginning after June 15, 2025, with earlier application encouraged. While the statement does not change how capital assets are recognized or measured, it significantly refines and standardizes how certain capital assets are presented in the notes to the financial statements, responding to inconsistent practices that developed following the issuance of several recent GASB pronouncements.

Key Takeaways

• GASB Statement No. 104 refines and standardizes capital asset note disclosures, promoting greater transparency and consistency across government financial reports.
• The statement addresses the complexities introduced by recent GASB standards, particularly in areas involving leases, public-private partnerships, and subscription-based IT arrangements, by mandating more structured and comparable disclosure practices.
• Preparing for GASB 104 implementation involves reviewing current asset schedules and system capabilities for detailed disclosures.
• Organizations should utilize technology to streamline compliance, maintain transparency, and enhance internal controls.

What Is GASB Statement No. 104?

GASB Statement No. 104 enhances capital asset note disclosures by:

• Requiring certain tangible and intangible assets to be disclosed separately by major class of underlying asset
• Establishing clear criteria and related disclosures for capital assets held for sale
• Providing greater uniformity in areas that prior GASB standards did not explicitly address

Although previous GASB statements introduced new categories of capital assets, they did not directly prescribe how those assets should be grouped and displayed within the capital asset note disclosures. GASB 104 addresses this gap by clarifying disclosure expectations and promoting consistency across government organizations.

Why GASB 104 Matters for Government Financial Transparency

Key Motivations Behind GASB 104

Several developments led to the issuance of GASB 104, including:

• Governments’ expanded leases, public-private and public-public partnerships, and subscription-based IT arrangements
• Divergent approaches to disclosing these assets once recognized
• Limited visibility into governments’ decisions to sell capital assets and debt collateralized by those assets

By prescribing more structured disclosures, GASB 104 improves comparability and enhances users’ understanding of how governments deploy and manage capital resources.

Relationship to Other GASB Standards

• GASB Statement No. 51 – Accounting and Financial Reporting for Intangible Assets
• GASB Statement No. 87 – Leases
• GASB Statement No. 94 – Public-Private and Public-Public Partnerships and Availability Payment Arrangements
• GASB Statement No. 96 – Subscription-Based Information Technology Arrangements

For assets within the scope of GASB 51, GASB 104 requires that intangible assets not otherwise captured by Statements 87, 94, or 96 be disclosed separately by major class of underlying assets. For GASB 94 arrangements, the statement requires a separate disclosure of the underlying capital asset associated with the intangible right-to-use arrangement, thereby adding clarity to complex transactions.

Key Provisions and Disclosure Changes Introduced by GASB 104

Expanded Capital Asset Disclosures

Under GASB 104, governments must present separate capital asset disclosure information, by major class of underlying asset, for:

• Lease assets recognized under Statement 87
• Intangible right-to-use assets associated with public-private (P3) and public-public (P2P) arrangements under Statement 94
• Subscription assets recognized under Statement 96
• Other intangible assets accounted for under Statement 51

This structure distinguishes traditional tangible capital assets from various forms of intangible and right-to-use assets, improving the transparency of capital investment decisions.

Capital Assets Held for Sale

GASB 104 also establishes explicit criteria for classifying capital assets as held for sale. A capital asset is considered held for sale when:

• Management has committed to a plan to sell the asset
• It is probable that the sale will be completed within one year of the financial statement date

For qualifying assets, governments must provide additional disclosures, including:

• Ending balances of capital assets held for sale
• Historical cost and accumulated depreciation by major class
• The carrying amount of debt for which the asset is pledged as collateral

The statement requires management to reassess this classification at each reporting date, reinforcing discipline around asset disposition decisions.

Preparing for Implementation: Practical Considerations for Governments

Although GASB 104 is primarily a disclosure standard, successful implementation will require deliberate preparation. Government accountants may wish to consider the following steps:

• Review existing capital asset schedules to identify assets subject to Statements 51, 87, 94, and 96
• Determine whether current disclosures already segregate assets by underlying asset class
• Identify capital assets potentially meeting the held-for-sale criteria and document management’s assessment
• Evaluate whether existing systems can produce the required disclosure detail or whether supplemental schedules are needed
• Review Appendix C of GASB Statement No. 104, which includes an illustrative disclosure example that may assist in designing compliant note formats

Taking these steps early can reduce implementation risk and streamline year-end reporting.

The Role of Technology in Implementing GASB 104

As asset portfolios become more complex, technology can support compliance with GASB 104 through:

• Fixed asset systems capable of tracking assets by accounting standard and underlying classification
• Improved data governance over lease, subscription, and partnership arrangements
• Automated reporting tools that reduce reliance on manual spreadsheets

These improvements can enhance accuracy while strengthening internal controls and audit readiness.

Looking Ahead

GASB 104 reflects an ongoing trend toward more structured and decision-useful disclosures, particularly in areas where newer asset types intersect with traditional capital reporting. Governments should expect continued emphasis on transparent presentation and defensible professional judgment as GASB guidance evolves.

How EisnerAmper Can Help

EisnerAmper’s governmental services team brings extensive experience advising state and local governments on complex GASB standards and their practical application. Our team helps organizations:

• Interpret and implement new disclosure requirements efficiently
• Apply professional judgment in a clear, well-documented manner
• Translate technical accounting guidance into actionable steps for finance teams and governing bodies

By combining deep technical expertise with an audit-ready mindset, EisnerAmper supports governments in strengthening the quality of financial reporting and confidence.