The Governmental Accounting Standards Board (GASB) has issued statement no. 104, disclosures of certain capital assets – a pivotal update that reshapes how state and local governments report and disclose capital assets. This standard introduces new requirements aimed at enhancing transparency and consistency in financial reporting.
For professionals in accounting, audit and finance—especially those serving cities, counties, school districts, utilities, Tribal governments and other public entities—understanding and implementing these changes is essential.
Key objectives of GASB 104
GASB 104 builds upon the foundational disclosure requirements of GASB statement no. 34 by mandating more granular detail in capital asset note disclosures. The statement focuses on two primary areas:
- Expanded disclosure of intangible capital assets
- New requirements for capital assets held for sale
These changes are designed to provide stakeholders with clearer insights into the nature, classification and potential disposition of governmental capital assets.
Enhanced intangible asset disclosures
One of the most significant changes under GASB 104 is the requirement to separately disclose various types of intangible assets in the capital asset roll-forward note. Governments must now break out these categories:
- Lease assets: Disclose right to use assets, under GASB statement no. 87, by major class of the underlying capital asset (land, buildings, equipment, etc.)
- Public-private or public-public partnership (PPP) operator intangible right-to-use assets: Any right to use assets, under GASB statement no. 94, categorized by major class
- Subscription-based IT arrangements (SBITAs): Identified subscription assets under GASB statement no. 96
- Other intangible assets: Any remaining intangible assets not covered above, disclosed by major class
Importantly, GASB 104 clarifies that other right-to-use assets should not be grouped with owned intangibles, ensuring a cleaner and more accurate presentation.
Although much of this information was previously required by the disclosures in GASB statements no. 87, 94 and 96, the shift in GASB 104 is to incorporate the additional level of detail or disaggregation into the capital asset roll-forward footnote.
Capital assets held for sale
GASB 104 introduces a new disclosure requirement for capital assets held for sale. To qualify, two conditions must be met:
- The government has formally decided to sell the asset, and
- It is probable (likely to occur) that the sale will be finalized within one year of the financial statement date.
To assess probability, governments should consider factors such as:
- If the asset is available for immediate sale in its current condition
- Are there active efforts to find a buyer (e.g., public bidding, listing, marketing)
- Market conditions that might impact the likelihood of a sale within one year from the financial statement date (year-end)
- Are regulatory approvals required and have those been obtained or requested
A government should evaluate whether a capital asset is held for sale each reporting period.
Once identified, these assets should continue to be reported within their appropriate major class (e.g., buildings, equipment) in the capital asset roll-forward note. Additionally, GASB 104 requires separate disclosure of:
- Historical cost of the assets available for sale identifying the major class they are reported in
- Accumulated depreciation associated with said assets and
- Carrying amount of any debt for which the asset is pledged as collateral
Implementation guidance
GASB 104 must be implemented in accordance with GASB statement no. 100, accounting changes and error corrections. Key implementation steps include:
- Disclosure of implementation: Governments must disclose that GASB 104 has been adopted and identify affected financial statement line items, if any (excluding totals and subtotals)
- Restatement of beginning balances: The beginning balance column of the capital asset roll-forward note must be restated for both the current and prior year (if comparative statements and two years are presented)
- Comparative statements: If prior year assets held for sale were reported but did not meet GASB 104 criteria, restatement is required
- Disclosure of prior year data: Historical cost, accumulated depreciation and debt collateral information must be disclosed for prior year assets held for sale
- Practicality clause: If restatement is not practicable, governments must disclose the reasons why in the notes
Final thoughts
GASB 104 represents a meaningful shift in how governments disclose capital assets, particularly intangible assets and those held for sale. For professionals responsible for implementing new accounting standards, this statement demands careful planning, system updates and coordination across departments.
This standard is effective for periods beginning after June 15, 2025, however, early adoption is encouraged, and proactive engagement with auditors and stakeholders will help ensure a smooth transition.
