How GASB 103 and GASB 104 will impact tribal governments

The Governmental Accounting Standards Board (GASB) introduced two new reporting standards that will impact tribal governments: GASB Statement No. 103, Financial Reporting Model Improvements and GASB Statement No. 104, Disclosure of Certain Capital Assets.

Both standards are effective for fiscal years beginning after June 15, 2025, meaning your tribe should now be implementing these requirements in their fiscal year 2026 financial statements.

Neither of these standards dramatically changes how your tribe will recognize revenue or expenses. But they do include presentation and disclosure updates that will affect how financial statements are prepared, reviewed and communicated to tribal leaders, lenders, grantors and other stakeholders.

Continue reading for a breakdown of GASB 103 and 104 requirements and what tribal leaders should be doing now to help ensure compliance.

What are the changes to GASB 103?

In an effort to make financial statements easier to understand and more useful for decision-makers, GASB 103 makes the following changes to the governmental financial reporting model:

Proprietary funds

GASB 103 does impact proprietary funds, which are commonly used for business-type activities. For tribes, this could include enterprises such as casinos, utilities, housing authorities or other operations that function similarly to businesses.

Historically, tribes had considerable flexibility in determining which revenues and expenses were classified as operating versus nonoperating. To create greater consistency in financial reporting, GASB 103 now provides narrower definitions for nonoperating items, which may result in certain items previously classified as nonoperating being reported as operating activities.

Under GASB 103, a tribal casino will typically report gaming revenue, food and beverage sales, payroll costs and other day-to-day operating expenses as operating activities because they are directly related to the casino’s primary business purpose.

Items that will be classified as nonoperating revenues/expenses include:

• Interest expense on debt, such as financing used to construct a casino expansion, hotel or other tribal enterprise projects.
• Investment income and investment-related expenses, such as earnings from reserve funds or investment portfolios.
• Gains or losses from disposing of capital assets, such as selling land, equipment or facilities

GASB 103 also introduces a distinct category for noncapital subsidies. Examples that may be relevant to tribes include:

• Transfers between a tribe and a tribally owned enterprise.
• Federal grants received by a tribal housing authority or similar enterprise activity when the funding is intended to subsidize operations rather than purchase capital assets.
• Other intergovernmental revenues received without providing goods or services in exchange.

Tribal governments should not expect significant changes in reported overall financial results. The primary impact will be on how information is classified and displayed in statements.

Management’s discussion and analysis

Management’s discussion and analysis (MD&A) will remain as required supplementary information. But the process has been streamlined into these five areas of focus:

1. Overview of the financial statements
2. Financial summary
3. Detailed analysis
4. Significant capital asset and long-term financing activity
5. Currently known facts, decisions or conditions

The intent is to reduce repetitive boilerplate language and encourage management to provide meaningful explanations of why financial results changed year-to-year.

For tribes that choose to present MD&A, management may need to put more effort into developing thoughtful explanations and discussing known conditions that could affect future operations.

Unusual or infrequent items

GASB 103 replaces the long-standing categories of “special items” and “extraordinary items” with a single category called “unusual or infrequent items.”

Under the new guidance, transactions or events that are either unusual or infrequent must be reported separately in the financial statements. Additional disclosures are required regarding the related activities and whether management had control over the event.

The change is intended to improve consistency while still ensuring significant one-time events receive appropriate visibility.

What actions should tribes take now to help ensure GASB 103 compliance?

There is no need to overhaul accounting systems, but tribes should begin reviewing how their financial statements are presented.

Actions to improve GASB 103 preparation and awareness include:

• Review proprietary fund revenue and evaluate operating versus nonoperating classifications.
• Evaluate whether any transfers, grants or subsidies need to be presented differently.
• Assess MD&A preparation processes and timelines.
• Ensure management is prepared to provide more meaningful narrative analysis.
• Discuss implementation plans with auditors and accounting advisors.
• Educate tribal leadership and finance personnel about the new reporting format.

What does GASB 104 require from tribes?

GASB 104 was created to improve transparency and consistency in the reporting of capital assets. It requires tribes to separately disclose certain capital assets, including:

• Lease assets recognized under GASB 87.
• Public-private and public-public partnership right-to-use assets under GASB 94.
• Subscription-based IT arrangement (SBITA) assets (software subscriptions are a common example) under GASB 96.
• Other intangible assets (like easements or water rights) need separate major class reporting and cannot be grouped with owned tangible assets.

GASB 104 also establishes uniform requirements for assets held for sale. A capital asset is considered held for sale when:

• The tribe has decided to pursue the sale of the asset.
• It’s probable that the sale will be finalized within one year of the financial statement date.

Tribes must disclose:

• Historical cost and accumulated depreciation of the asset.
• Any debt associated with the for-sale asset.

In practice, if a tribe plans to sell a parcel of land, a building or another capital asset, that asset should be disclosed separately rather than being grouped with other capital assets.

What actions should tribes be taking now to help ensure GASB 104 compliance?

Tribes with significant lease portfolios, software subscriptions or assets being marketed for sale will feel the greatest impact from GASB 104. To help ensure compliance, tribes should:

• Inventory lease, IT subscriptions and other intangible assets.
• Review capital asset note disclosures for required breakout categories.
• Identify assets that may meet the held-for-sale criteria.
• Coordinate with auditors and accounting advisors to confirm presentation requirements.
• Compare current disclosures with GASB 104 requirements and identify any gaps.

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