In September 2024, the Governmental Accounting Standards Board (GASB) issued GASB Statement No. 104, Disclosure of Certain Capital Assets. Effective for fiscal years beginning after June 15, 2025, this Statement establishes new requirements for separately disclosing certain capital asset categories and introduces specific disclosures for capital assets classified as held for sale.
By establishing clear categories and held for sale disclosure requirements for capital assets, GASB 104 reduces the guesswork for readers trying to understand what governments own, what they’re using and what they plan to sell.
Practical Considerations
The Statement requires governments to present separate disclosures within the capital assets footnote for lease assets under GASB 87, intangible right‑to‑use assets recognized under GASB 94, subscription‑based IT arrangement assets under GASB 96, and other intangible assets — such as easements, internally developed or purchased software, or water rights — that do not fall into those categories.
This may require updates to how capital asset categories are grouped and reported in the financial statements. Additionally, right‑to‑use intangible assets may not be disclosed within the same major class as owned intangible assets.
For the first time, GASB also lays out specific criteria for when a capital asset is considered held for sale, requiring that the government both decide to pursue the sale and determine that it is probable the sale will be finalized within one year of the financial statement date. Because GASB 104 requires governments to evaluate this classification each reporting period, processes may need to be updated to ensure that assets continue to meet the criteria before being reported as held for sale.
In addition, governments will now need to provide separate disclosures for capital assets held for sale, including historical cost, accumulated depreciation or amortization, and the carrying amount of any debt for which the asset is pledged as collateral, reported by major class of asset. These disclosures apply to both governmental activities and business type activities, which may require expanded detail in the capital assets note compared to prior years.
Guiding You Forward
Need help evaluating how GASB 104 impacts you and how your processes may need to be updated to comply with this Statement? Cherry Bekaert’s Accounting Advisory professionals provide implementation services for government organizations to maintain compliance with GASB requirements. Reach out to your Cherry Bekaert advisor or a member of our Accounting Advisory practice.
