GASB: 2024 in Review and What’s Ahead in 2025 

The Governmental Accounting Standards Board (GASB) marked its 40^th anniversary in 2024 by issuing five documents—two final Statements and three proposals. Although not an unusual volume historically—the GASB averaged almost five final pronouncements a year between 2000 and 2020—it was a significant uptick in its activity since the pandemic. As the GASB builds on this progress, its recent achievements offer valuable insight into the landscape of governmental accounting and what to expect from them in 2025.  

The Financial Reporting Reexamination Finally Concludes 

GASB Statement No. 103, Financial Reporting Model Improvements, was released in April 2024, culminating 11 years of research and deliberation and three rounds of public input. The Statement’s most notable feature is what it doesn’t include: a new measurement focus and basis of accounting for the governmental fund financial statements. The GASB dropped what had been the tentpole of the project when it concluded that the tentative standards it had developed would not achieve its objective of conceptual consistency and purity. 

As CRI previously detailed, Statement 103 does make several notable changes: 

• Management’s discussion and analysis (MD&A): Statement 103 lowers the target reader of MD&A to someone who may not know anything about governmental accounting. It also more clearly delineates the required sections and their contents, strongly emphasizes the importance of explaining why amounts changed during the year, and discourages unnecessary repetition. 

• Unusual or infrequent items: The often-confusing extraordinary and special items have been combined into a single category of revenues and expenses/expenditures—unusual or infrequent items—that should appear last among all inflows and outflows. 

• Proprietary fund statement of revenues, expenses, and changes in fund net position: Statement 103 makes it easier to compare this financial statement with those of comparable not-for-profit and private entities by introducing a new subtotal—operating income (loss) and noncapital subsidies—that is analogous to the “operating income (loss)” amount in nongovernmental financial statements. 

• Operating and nonoperating revenues and expenses: Statement 103 provides much-needed clarity regarding the distinction between operating and nonoperating. Nonoperating revenues and expenses include subsidies received and provided, contributions to permanent and term endowments, financing-related flows, resources from the disposal of capital assets and inventory, and investment income and expenses. All other revenues and expenses are operating. 

• Major component units: Statement 103 removes the option to disclose condensed financial statements for major component units in the notes. They should either appear individually on the face of government-wide statements or in combining financial statements following the funds. 

• Budgetary comparisons: The option to report budgetary comparison information as a basic financial statement is eliminated. They should be reported as required supplementary information (RSI) and variance columns comparing (1) the original and final budgets and (2) the final budget with actual results must be included. 

Statement 103 should be applied beginning with fiscal years ending June 30, 2026. 

Disclosure Detail for Capital Assets 

GASB Statement No. 104, Disclosure of Certain Capital Assets, achieves two ends. First, it clarifies the level of detail that governments should disclose for specific types of intangible capital assets in notes to financial statements: 

• Leases and public-private/public-public partnerships, disaggregated into major classes of underlying assets (e.g., buildings, equipment, bridges) 

• Information technology subscription assets, in the aggregate 

• Other kinds of intangible assets by major class 

Second, Statement 104 defines a capital asset “held for sale” as one that a government has decided to sell and is probable to be sold within a year. Governments should disclose the historical cost and accumulated depreciation or amortization of capital assets held for sale by major class of asset. 

Statement 104 also should be applied beginning with fiscal years ending June 30, 2026. 

Proposed Standards 

The GASB issued a flurry of due process documents for public comment late in 2024. The most potentially consequential—Preliminary Views, Infrastructure Assets—proposed new disclosures and RSI related, including: 

• Notes to financial statements by major class of asset: 

• Disclosing changes in policies for capitalizing infrastructure assets or estimating useful lives 

• Historical cost of infrastructure assets that are more than 80 percent depreciated, separately identifying those that are fully depreciated 

• Maintenance expenses for the current reporting period 

• An RSI schedule comparing estimated and actual maintenance expenses for each of the past 10 fiscal years, with notes to RSI describing any factors that significantly affect the trends 

An Exposure Draft, Subsequent Events is expected to help governments more consistently and comparably apply the existing guidance for distinguishing between and reporting recognized and non-recognized subsequent events. The GASB found that governments commonly reported as subsequent events instances that did not meet the definition and failed to report instances that appeared to meet the definition. Otherwise, the proposed requirements are very similar to the present standards. 

Lastly, another Exposure Draft, Implementation Guidance Update—2025, proposed questions and answers that apply GASB standards to specific facts and circumstances. The proposal addresses standards related to cash flow reporting, Statement 103, leases, conduit debt, accounting changes and error corrections, special revenue funds, and compensated absences. 

Some of What’s in Store for 2025 

The comment deadlines for the three proposals went fast and furious—January 17 for infrastructure assets, January 24 for the implementation guidance, and February 21 for subsequent events—though the GASB does accept later comments.

Once it has completed the gathering of input on its infrastructure assets proposals, the GASB will begin to develop standards incorporating that feedback. It tentatively plans to issue an Exposure Draft of a proposed Statement in early 2026. 

The GASB expects to issue a final Implementation Guide in June 2025 and a final Subsequent Events Statement in December 2025. 

Revenue and Expense Recognition 

A monumental project that will end up taking longer to complete than Statement 103 is set to issue its third and final proposal for public comment in October. The GASB’s objective is to establish a comprehensive general model to guide governments in determining when and how to account for revenue and expense transactions. Based on tentative decisions thus far, that model will likely incorporate some form of performance obligation-based accounting.  

Going Concern Uncertainties and Severe Financial Stress 

The GASB plans to issue a Preliminary Views in March proposing to revamp the nature of going concern disclosures and to introduce reporting when governments are in danger of insolvency. The proposal would focus going concern strictly on “probable dissolution”: whether a government will continue to exist over the next year, regardless of the reason—financial or other—it might shut down. A government would make the new disclosures when it is at or near the point of insolvency, which would be defined as “a circumstance in which a government generally is not paying its liabilities as they come due or is unable to pay its liabilities as they come due.” The GASB will hold public hearings and user forums on the proposal in August and September. 

Implementation Guidance Update 

Should the GASB accumulate a sufficient number of new questions and answers, it will propose a new update for 2026 later this year.  

Voluntary Digital Financial Reporting 

The GASB has been developing a digital taxonomy for governmental financial reporting for the past couple of years. The taxonomy will be exposed for public comment late in 2025. One use would be for governments that voluntarily use digital technologies to communicate their financial statements. More significantly, it also would be a leading candidate for selection by the Securities and Exchange Commission and other federal agencies under the Financial Data Transparency Act. 

Need help with implementing Statements 103 and 104? Have questions about the GASB’s other activities? Contact a CRI advisor today! We can provide the guidance and insights you need to navigate these updates with confidence.