GASB Statement No. 104: What Local Governments Need to Know About the New Capital Asset Disclosure Requirements

KEY TAKEAWAYS

• GASB 104 takes effect for fiscal years beginning after June 15, 2025
• The standard requires separate disclosure of lease assets, partnership assets, subscription-based information technology assets, and other intangible assets
• Additional disclosure requirements apply to capital assets held for sale, including disclosing debt for which the asset is pledged as collateral
• Finance teams should begin updating asset registers and documentation procedures now to ensure compliance

In September 2024, the Governmental Accounting Standards Board (GASB) issued Statement No. 104, Disclosure of Certain Capital Assets. This new standard builds on GASB 34 and introduces expanded note disclosure requirements for specific categories of capital assets. For local governments, schools, and other public entities, now is the time to prepare. 

Here’s what you need to know—and what steps you can take to stay ahead of the curve. 

What GASB 104 Changes

GASB 104 doesn’t change how governments recognize or measure assets. Instead, it focuses on improving transparency through enhanced note disclosures. The goal? Give stakeholders clearer insight into the nature and composition of government-held capital assets. 

Required Separate Disclosures

Under GASB 104, governments must separately disclose the following in their capital asset notes: 

• Lease assets by major asset class (per GASB 87) 
• Right-to-use intangible assets from public-private or public-public partnerships (per GASB 94) 
• Subscription-based information technology assets (per GASB 96) 
• Other intangible assets (software, trademarks, easements, etc.) by major asset class 

This means your finance team will need to track these categories distinctly in asset records and ensure amortization and depreciation schedules are properly aligned. 

Capital Assets Held for Sale

GASB 104 also establishes additional disclosure requirements for capital assets held for sale. An asset qualifies as “held for sale” when: 

• The government has decided to pursue the sale, and 
• It is probable the sale will be finalized within one year of the financial statement date 

Governments must evaluate if an asset is “held for sale” each reporting period, document sale decisions formally, and maintain clear collateral tracking. 

For these assets, you’ll need to: 

• Continue to report the asset(s) within the appropriate major asset class 
• Disclose the asset(s) held for sale in the notes to the financial statements with historical cost and accumulated depreciation (or amortization) by major asset class  
• Disclose the carrying amount of debt for which the asset is pledged as collateral by major asset class 

Examples from the actual pronouncement at https://gasb.org/page/Document?pdf=GASBS%20104.pdf&title=GASB%20STATEMENT%20NO.%20104,%20DISCLOSURE%20OF%20CERTAIN%20CAPITAL%20ASSETS 

When Does GASB 104 Take Effect?

GASB 104 applies to fiscal years beginning after June 15, 2025. In practical terms: 

Schools, educational service centers, and career centers whose fiscal year 2026 starts on July 1, 2025, will need to comply beginning with that year 

Cities, counties, and other local governments whose fiscal year 2026 begins after June 15, 2025, will follow the same timeline 

Practical Steps to Prepare

1. Don’t wait until the effective date arrives. Taking action now will help you avoid audit surprises and ensure a smooth transition: 
2. Update your asset registers. Configure systems to classify lease, partnership, subscription, and intangible assets separately. 
3. Document your policies and procedures. Establish how “probable sale” determinations will be made, including required approvals and market condition assessments. 
4. Review debt tracking. Make sure the linkage between pledged assets and related debt is clear and well-documented. 
5. Coordinate across departments. Work with IT and facilities teams to ensure subscription-based and intangible assets are properly captured. 
6. Prepare draft disclosures early. Run through the new disclosure requirements before your effective date to identify gaps. 
7. Train your team. Update accounting manuals and ensure staff understand the new requirements. 

Why This Matters

While GASB 104 creates new compliance obligations, it also delivers real benefits: 

Greater transparency – Stakeholders gain clearer insight into the nature of government assets 

Improved comparability – Consistent disclosures across governments make benchmarking easier 

Better decision-making – Enhanced information helps stakeholders assess liquidity, debt collateralization, and asset management effectiveness 

The Bottom Line

GASB 104 is about improving disclosure and transparency—not changing how you recognize or measure assets. By preparing now, your government can ensure smooth compliance, minimize audit surprises, and provide stakeholders with the information they need to evaluate your financial health and accountability. 

Have questions about how GASB 104 will affect your organization? Rea’s government advisors are here to help you navigate these new requirements and develop a compliance strategy that works for you. 

About the Author

Karen Leffler is a Lead Accounting Specialist on Rea’s government services team. With more than a decade of accounting experience and nearly five years at Rea, Karen helps local governments, schools, and public entities prepare basic financial statements and annual comprehensive financial reports. Known for her attention to detail, strong analytical skills, and thorough approach, she works closely with finance directors and treasurers to ensure accurate financial reporting and smooth audit processes.