Navigating New GASB Pronouncements: What Small and Mid-Size New York Governments Need to Know

As we reach the midpoint of 2025, small and mid-size governments in New York State are navigating significant changes to their accounting and financial reporting practices, driven by recent Governmental Accounting Standards Board (GASB) pronouncements. First reporting cycles under GASB 101 and 102 have recently concluded, while many governments are preparing for further new requirements taking effect for fiscal years beginning after June 15, 2025. It is important to understand current regulatory changes and to take proactive measures to ensure adherence to these regulatory changes.

GASB 101: Compensated Absences

One of the most impactful changes as of recent has been the implementation of GASB Statement No. 101, which modernizes the accounting for compensated absences. Effective for fiscal years beginning after December 15, 2023, GASB 101 expands the definition of compensated absences to not only include traditional vacation and sick leave, but other types of leave such as parental, holiday, and jury duty as well. By mid-2025, most governments have already completed their first reporting cycle under GASB 101. Now is the time for governments to shift their focus from the initial adoption to refining internal processes, addressing any challenges encountered during the first year, and ensuring that systems for tracking and calculating leave accruals remain accurate and up to date for the next audit cycle.

GASB 102: Certain Risk Disclosures

GASB Statement No. 102 is now also in effect for fiscal years beginning after June 15, 2024. This means that governments with June 30, 2025 fiscal year-ends are preparing their first disclosures. GASB 102 requires entities to identify and disclose significant concentrations, such as singular revenue sources and constraints. To prepare for this disclosure, organizations should be finalizing their risk assessments and preparing these now necessary disclosures.

GASB 103: Financial Reporting Model Improvements

Looking ahead, GASB Statement No. 103 will be in effect for fiscal years beginning after June 15, 2025. GASB 103 addresses improvements to key components of the financial reporting model, including placing an emphasis on an explanatory narrative in Management’s Discussion and Analysis (MD&A), thus requiring a clear explanation of why financial changes occurred. Additionally, budgetary comparison schedules will move from the basic financial statements to required supplementary information. Governments should be planning for this change now by updating their MD&A and preparing to apply new reporting requirements for the upcoming fiscal year (fiscal years ending June 30, 2026, or later).

GASB 104: Disclosure of Certain Capital Assets

GASB Statement No. 104 will also be effective for fiscal years beginning after June 15, 2025. This will require more detailed disclosures about capital assets, so preparers should actively be reviewing capital asset records and planning for expanded note disclosures in next fiscal year’s reporting.

Implementation Guidance

Beyond these standards, the 2025 GASB Implementation Guide is expected to be finalized and released mid-2025. This guide will provide clarification and answers to frequently asked questions around the new standards.

Action Steps for New York Governments

Amidst all these developments, the focus for small and mid-sized governments in New York State should be to review first-year experiences with GASB 101 and 102 and then audit and refine that process as needed for future years. Beyond that, they should start preparing for the upcoming implementation of GASB 103 and 104 by updating policies. Staying current with new guidance will help ensure smooth transitions and compliance amongst these evolving changes. For additional guidance regarding GASB statements, reach out to our team.