GASB 104: Disclosure of Certain Capital Assets

Summary :

GASB 104 is a disclosure-only standard effective for fiscal years beginning after June 15, 2025.

Governments must separately disclose intangible right-to-use assets by major class, including lease assets (GASB 87), PPP/APA assets (GASB 94) and subscription-based IT arrangement assets (GASB 96).

A new held-for-sale classification requires a separate disclosure paragraph in the capital asset footnote.

Implementation requires cross-departmental coordination to identify affected assets, update policies and revise footnote disclosures.

The Governmental Accounting Standards Board (GASB) issued Statement No. 104, Disclosure of Certain Capital Assets, to provide users of government financial statements with essential information on two types of capital assets. The standard is effective for fiscal years beginning after June 15, 2025, with earlier application encouraged. Most importantly, GASB 104 doesn’t change how capital assets are recognized or measured. Its requirements are limited only to disclosures, meaning governments will not reclassify assets on the face of their financial statements but will need to provide greater detail in the footnotes.

Capital Assets

Separate Disclosure of Certain Capital Assets

GASB 104 requires governments to disclose the following asset types separately in the capital asset footnote, along with related amortization information:

Lease assets (GASB 87): Intangible right-to-use assets from leases, disclosed by major class of the underlying leased asset.

PPP and APA assets (GASB 94): Intangible right-to-use assets from public-private and public-public partnerships and availability payment arrangements, disclosed by major class of the underlying asset.

Subscription-based IT arrangement assets (GASB 96): Subscription-Based Information Technology Arrangement (SBITA) assets disclosed on their own separate line in the capital asset footnote.

Other intangible assets: Any remaining intangible capital assets, disclosed separately by major class.

Governments that already break out these asset classes in their capital asset roll-forward tables may find they are largely compliant with this aspect of the standard. Those that have grouped these assets into broader categories will need to revise their footnote disclosures.

Capital Assets Held for Sale and Disclosure

GASB 104 also introduces a held-for-sale classification for capital assets. An asset qualifies when the government has decided to pursue its sale and it’s probable the sale will be finalized within one year of the financial statement date. Both conditions must be met. Governments should reassess this classification at each reporting period.

When evaluating whether a sale is probable within one year, governments should consider:

Whether the asset is available for immediate sale in its present condition

Whether an active program to locate a buyer has been initiated

Prevailing market conditions for selling that type of asset

Any regulatory approvals required to complete the sale

Held-for-sale assets should not appear as separate line items on the statement of net position or in the capital asset roll-forward schedule. Instead, the standard requires a separate disclosure paragraph in the capital asset footnote. That paragraph should include the historical cost and accumulated depreciation of held-for-sale assets by major class as well as the carrying amount of any related debt for which the asset is pledged as collateral.

Impact on Financial Reporting

Although GASB 104 is a disclosure-only standard, its effect on financial reporting is important to keep in mind. Stakeholders, including taxpayers, bond investors and oversight bodies, should gain a clearer picture of the composition and status of a government’s capital asset portfolio.

Separately disclosing intangible right-to-use assets allows you to better assess useful lives, amortization patterns and underlying obligations, which is especially valuable given the growth in government leasing and technology subscriptions following GASB 87 and GASB 96. The held-for-sale classification also improves reporting by clearly identifying assets a government intends to dispose of or reclassify.

Implementation Considerations

Effective implementation of GASB 104 requires planning and cross-departmental coordination. Action steps include:

Review the standard: Read GASB 104 in full. The core text is brief and accessible to finance and accounting staff.

Analyze existing disclosures: Compare current capital asset footnotes against the new requirements to identify gaps.

Identify held-for-sale assets: Work across departments to identify assets that meet the GASB definition, as the finance team may not have full visibility into all significant asset activity.

Update policies and systems: Revise accounting policies and financial reporting systems to support the new classification and disclosure requirements.

Consider early adoption: Implementing GASB 104 changes ahead of the mandatory date allows entities to address implementation challenges without deadline pressure. The standard should be applied retrospectively to all periods presented as much as possible.

Get Help with GASB 104 Compliance

GASB 104 enhances transparency in government financial reporting by requiring more detailed disclosures for intangible right-to-use assets and capital assets held for sale. While the standard doesn’t introduce changes to recognition or measurement, preparing compliant disclosures will take careful planning, policy updates and coordination across departments.

With the effective date approaching for fiscal years beginning after June 15, 2025, now is the time to assess readiness and begin implementation. If your organization needs help with GASB 104 updates, contact our team of government accounting professionals at Brown Plus today.