GASB 104 Update

In September, the Governmental Accounting Standards Board (GASB) issued Statement #104, Disclosure of Certain Capital Assets, which will become effective for governments with fiscal years beginning after June 15, 2025, and for all reporting periods thereafter.

What is the objective of GASB 104?

The objective of GASB Statement No. 104 is to enhance the transparency and usefulness of financial statements for state and local governments by requiring separate disclosure of specific types of capital assets. GASB Statement No. 104 also establishes requirements for capital assets that are held for sale.

What does GASB 104 require?

• Separate financial statement disclosure is required for the following capital assets under GASB Statement No. 104:
  • Lease assets recognized under GASB Statement Number 87, by major class of underlying asset
  • The intangible right to use assets that are recognized under GASB Statement Number 94, by major class of underlying asset
  • Subscription assets recognized under GASB Statement 96
  • Other intangible assets by major class, other than those listed above.
• Under GASB Statement No. 104, capital assets held for sale are defined as capital assets where the government has decided to pursue the sale of the asset, AND it is probable the sale will be finalized within one year of the financial statement issuance date. Capital assets held for sale must be evaluated each reporting period to determine if they meet the criteria for being held for sale. If so, then the government must disclose the ending balances of these assets with historical cost and accumulated depreciation by major class. The government also must disclose the carrying amount of debt for which these assets are pledged as collateral.

When is GASB 104 effective?

GASB 104 will be effective for accounting changes and error corrections made in fiscal years beginning after June 15, 2025, and all reporting periods thereafter. Earlier application is encouraged.

If you have any questions regarding the implementation of GASB 104, please contact a member of your audit team.