GASB Statement No. 104: What to Know About Capital Asset Disclosures and Assets Held for Sale

GASB Statement No. 104 introduces updated disclosure requirements for certain capital assets and establishes clearer guidance around assets held for sale. While the standard is relatively concise, the implications reach across departments, systems, and processes in ways many governments don’t initially expect.

For most organizations, the challenge is not the technical rules themselves. It is identifying where the data lives, understanding when the rules apply, and building a process that supports strong financial statement reporting.

Why GASB 104 Matters Now

GASB 104 was issued to improve transparency and consistency in financial reporting, specifically within footnote disclosures. These disclosures provide the context behind the numbers, helping users understand how assets are structured, managed, and expected to perform over time.

The standard becomes effective for fiscal years beginning after June 15th, 2025, which means governments with a June 30th year-end will be among the first to implement the standard with their 2026 financial statements. That timeline makes the current reporting cycle an ideal time to evaluate readiness and avoid last-minute work.

Section 1: Expanded Capital Asset Disclosures

One of the core components of GASB 104 is the requirement to separately disclose specific categories of capital assets. These include:

• Lease assets, by major class of underlying asset
• Subscription-based IT arrangements (SBITAs)
• Intangible right-to-use assets recognized in relation to Public-Private and Public-Public Partnerships (PPPs)
• Other intangible assets such as easements, water rights, and internally developed software, by major class of underlying asset
  

At a glance, this may feel like a continuation of recent standards around leases and technology arrangements. In practice, it requires a more structured and intentional approach to how these assets are disclosed in the footnotes.

Where Governments Run Into Challenges

The biggest hurdle is not identifying the categories. It may be that capital asset information is not centralized. In reality, many governments separately track:

• Lease assets under GASB 87
• SBITAs under GASB 96
• Other intangible or right-to-use assets in IT or contract systems
  

These items may reside outside of traditional capital asset systems and schedules. GASB 104 requires all these assets to be individually reflected in the capital asset footnote, and when data is scattered, disclosures become more difficult to assemble and verify.

What to Do Now

• Review current capital asset disclosures and compare them to GASB 104 categories
• Identify where lease assets, SBITAs and other intangible and right-to-use assets are tracked and if all totals are separately categorized
• Determine whether your current disclosure format will need to change
• Discuss GASB 104 expectations and changes with your auditors
  

Section 2: Assets Held for Sale

The second major component of GASB 104 focuses on assets held for sale, by clearly defining a capital asset held for sale and expanding disclosure requirements.

An asset is considered held for sale when:

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

GASB 104 also includes a specific list of factors to consider when a local government is trying to determine if a sale is probable. Those factors are:

• Whether the asset is available for immediate sale in its present condition
• Whether an active program to locate a buyer has been initiated, which may include the asset being put out for bid
• Market conditions for selling that type of asset
• Regulatory approvals needed to sell the asset

Once it is determined that an asset qualifies as being held for sale, governments must disclose additional details, including historical cost, accumulated depreciation or amortization, and any related debt when the asset is pledged as collateral on that debt.

Why This Could Get Missed

Assets held for sale often fall outside routine financial reporting processes. The trigger to classify an asset as held for sale, is not the completed sale. It is the decision and intent to sell. This creates a common scenario: A government begins a redevelopment project, makes a decision to sell a currently unused building it owns, and expects the transaction to close in the following year. Because the sale has not yet occurred, the classification of the building as an asset held for sale is overlooked. When year-end arrives, the reporting requirement has already been triggered even though the sale has not occurred.

Additionally, in accordance with GASB 104 guidance, the building remains in the government’s capital assets within the buildings classification and does not move to a separate “assets held for sale” category, as it does not cease to exist as a capital asset. The government must instead add additional disclosures detailing assets held for sale within the capital asset footnote.

What to Do Now

• Finance departments should inquire of management and other departments within their organizations to determine if they have decided to sell any assets
• Evaluate the disclosure requirements to meet the GASB 104 standards
• Discuss GASB 104 assets held for sale disclosure requirements with your auditors

How Redpath Can Help

At Redpath, we work alongside government finance teams to turn new standards like GASB 104 into a clear, manageable process. Whether you need help understanding the requirements, evaluating your current approach, or preparing for implementation, we bring practical guidance that fits your timeline and resources.

If you’re beginning to think about GASB 104, starting early can make all the difference. Our team is here to help you plan ahead, reduce last-minute pressure, and implement with confidence.