GASB Provides Guidance on “Ghost Columns” and Other Implementation Issues

The GASB recently published Implementation Guide 2025-1, Implementation Guidance Update—2025 (IGU). GASB Implementation Guides constitute authoritative GAAP under Statement No. 76, The Hierarchy of Generally Accepted Accounting Principles for State and Local Governments. In other words, governments are required to follow the guidance in an Implementation Guide if the facts and circumstances described apply to them.

The IGU contains 16 new questions and answers (Q&As) on cash flows reporting, the financial reporting model, leases, conduit debt, accounting changes, and compensated absences. It also amends two previously issued Q&As and removes another existing question. Most notably, the GASB formally addresses for the first time the topic of so-called “ghost columns” resulting from the implementation of Statement No. 100, Accounting Changes and Error Corrections. With these changes in place, it’s worth examining how the new guidance and amended Q&As may affect day-to-day accounting and reporting practices.

Statement 100 Q&As

The IGU contains four new Q&As related to accounting changes. One of the questions explains how a change in a fund’s presentation from major to nonmajor should be displayed in the financial statements—in other words, the fund previously was displayed in its own column but now is included in a column with a government’s other nonmajor governmental or enterprise funds. The GASB says that a column should continue to be presented for the formerly major fund in the relevant resource flows statement (such as the governmental funds statement of revenues, expenditures, and changes in fund balances). However, that column should be empty (hence the “ghost column” moniker) except for two items: the fund’s beginning balance as previously reported and the adjustment to that balance (a reduction equivalent to the beginning balance). All other financial activity typically found in the column is now in the nonmajor funds column.

A second Q&A notes that this unusual reporting also applies when a government closes one fund and creates another as part of moving a continuing operation (e.g., relocating a water utility from an enterprise fund to a special revenue fund). In this instance, a column should continue to be presented for the closed enterprise fund, empty of activity except for the beginning balance as previously reported and the adjustment to that balance. (Note: Although the GASB does not mention it, the other rows in a ghost column should be blank, not zeros or dashes.)

In the third Statement 100 Q&A, the GASB clarifies that a change in a government’s capitalization threshold (the dollar amount of capital expenditures above which it recognizes a capital asset) is a matter of applying materiality and, therefore, is not a change in accounting principle.

Lastly, Statement 100 requires that governments (1) show the aggregate amount of restatements and adjustments to beginning balances in all columns except totals on the face of the financial statements and (2) disclose in notes the disaggregated restatements and adjustments in a table. If a government displays restatements and adjustments individually on the face, however, it doesn’t have to make the note disclosure. This Q&A indicates that this is an all-or-nothing provision: either all restatements and adjustments are displayed separately, or they are all shown in the aggregate. A government may not display some individually and aggregate the others.

New Financial Reporting Model Q&As

The IGU includes seven new Q&As related to Statement No. 103, Financial Reporting Model Improvements, which governments must implement beginning with fiscal years ending June 30, 2026. All but one of the Q&As address what may be the thorniest aspects of those standards: distinguishing between operating revenues and expenses and nonoperating and identifying noncapital subsidies.

Generally, revenues and expenses related to financing, such as interest, should be reported as nonoperating. Statement 103 carries forward an existing exception for governments or funds whose “principal ongoing operations” involve financing activities, such as providing loans to first-time homeowners. Whereas the exception in the existing standards addresses both revenues and expenses, Statement 103’s exception applies only to revenues. The GASB highlights the difference by indicating that although interest income for such a government or fund would be reported as operating revenue, its interest expenses would be nonoperating.

The next two Q&As also concern that exception, in the context of a government or fund whose principal ongoing operation is leasing property to other entities. Under Statement No. 87, Leases, a lease transaction has two components: the transfer of the right to use a capital asset and the financing of that arrangement. A government lessor recognizes two types of revenue from the transaction: interest (from the financing) and rent (for the use of the capital asset). The GASB explains that because all financing activity is nonoperating, the interest is nonoperating revenue. On the other hand, the rent is operating revenue.

Statement 103 requires that “noncapital subsidies” be reported in a separate section from other nonoperating revenues and expenses in the statement of revenues, expenses, and changes in fund net position. The GASB clarifies that the determination of whether a subsidy is noncapital depends on what the provider of the subsidy designates it is allowed to be used for, rather than on how the recipient actually uses it. Therefore, if the provider does not stipulate that a subsidy be used to purchase, construct, or renovate a capital asset, but the recipient uses all or some of the subsidy to do so, the subsidy is still considered noncapital.

Another subsidy-related Q&A concerns whether payments in lieu of taxes (PILOTs) are subsidies. Statement 103 defines subsidies as:

• Resources received for which no goods or services are provided in return, and which allow the recipient to charge fees lower than otherwise would be necessary
• Resources provided for which no goods or services are received in return, and which can be recovered through the provider’s user fees
• All other transfers

The GASB notes that a variety of transactions with very different provisions are commonly referred to as PILOTs in practice. Consequently, there is no black-and-white rule for whether a PILOT is a subsidy. Instead, when evaluating a PILOT, governments should focus on whether its provisions meet the definition of a subsidy. The name itself is irrelevant.

The last subsidy Q&A addresses the common instance of an insurance company paying for hospital care. In this scenario, a government hospital provides services to a patient and bills the insurance company. Even though the hospital does not provide goods or services to the insurer, the GASB explains that the insurance payments are not subsidies because they do not result in the hospital charging fees that are lower than they otherwise would be.

New Compensated Absences Q&A

The most significant other new Q&A relates to Statement No. 101, Compensated Absences. Under those standards, a liability for paid leave is calculated by multiplying the leave balance as of the date of the financial statements by the employee’s pay rate as of that date, and then adding salary-related payments such as payroll and Social Security taxes. The Q&A asks whether a government that knows what future pay rates will be (perhaps because a new collective bargaining agreement goes into effect on the first day of the next fiscal year) should use those pay rates to measure the liability. The answer is a definitive “no”—only pay rates as of the end of the fiscal year (or other financial statement date) should be used.

Need Help Understanding GASB Guidance?

CRI stands ready to help you make informed decisions about how to apply GASB standards. Reach out to us today to discuss how these updates may impact your organization and the steps you can take to move forward with confidence.