State and local governments will soon need to enhance how they disclose certain capital assets in their financial statements. GASB Statement No. 104, Disclosure of Certain Capital Assets, introduces new note disclosure requirements intended to improve transparency and provide financial statement users with clearer, more decision-useful information. While the standard is relatively narrow in scope, governments should understand what is changing and begin preparing now.
The standard is effective for fiscal years beginning after June 15, 2025, with earlier implementation permitted.
What Is GASB Statement 104?
GASB Statement 104 focuses exclusively on note disclosures related to specific types of capital assets. It does not change recognition or measurement requirements. Instead, it expands the information governments must present in the notes to their financial statements for certain asset categories that have become more common in recent years.
The goal is to help users better understand the nature, timing, and financial impact of these assets, particularly those tied to newer accounting standards such as leases and subscription-based arrangements.
Capital Assets Subject to New Disclosures
Under GASB 104, governments must provide additional note disclosures for the following types of capital assets:
Lease assets, which arise from lease agreements recognized under GASB Statement 87 Subscription assets, which result from subscription-based information technology arrangements under GASB Statement 96 Intangible right-to-use assets, which may include certain software, easements, or similar arrangements
For these asset types, governments will need to separately disclose relevant information rather than including them only in broader capital asset totals. This added granularity allows users to better assess how much of a government’s capital asset base is tied to contractual or time-limited rights.
New Disclosures for Assets Held for Sale
GASB Statement 104 also introduces new disclosure requirements for capital assets held for sale. Governments will need to provide note disclosures that identify these assets and explain their status, giving readers clearer insight into planned asset disposals and their potential financial impact.
These disclosures are intended to align more closely with how users evaluate asset utilization, long-term planning, and liquidity considerations.
GASB 104: Next Steps for Governments
Although GASB 104 is a relatively simple standard, implementation will still require coordination across finance, accounting, and operational teams. Governments should begin by identifying lease assets, subscription assets, intangible right-to-use assets, and any capital assets currently held for sale. Reviewing existing capital asset tracking systems and note disclosures now can help avoid last-minute issues during implementation.
Early preparation also provides an opportunity to ensure consistency with related GASB standards and improve overall financial statement clarity.
The above article appears on Clark Schaefer Hackett’s website