GASB Releases Implementation Guide on Subsidy-Related Requirements in Statement 103

The GASB has released an implementation guide containing seven new Q&As to clarify the application of the guidance on subsidies in Statement No. 103, Financial Reporting Model Improvements. Topics covered in the new Q&As include the following:

• When a “higher education institution that reports as a [business-type activity (BTA)] or an enterprise fund receives donations that it will use to award scholarships to its students” and the donations are made by “parties who do not receive goods or services in return,” whether such donations qualify as subsidies under Statement 103.
• Whether “research grants received by a higher education institution that reports as a BTA or an enterprise fund meet the definition of subsidies in paragraph 14a of Statement 103.”
• Whether “taxes reported by a BTA that are derived tax revenues or imposed nonexchange revenues in accordance with paragraphs 7a and 7b of Statement No. 33, Accounting and Financial Reporting for Nonexchange Transactions, meet the definition of subsidies in paragraph 14a of Statement 103.”
• Whether passenger facility charges “received by an airport that reports as a BTA or an enterprise fund meet the definition of subsidies in paragraph 14a of Statement 103.”
• The presentation of “subsidies other than noncapital subsidies.”
• How subsidies would be classified when a resource provider limits the use of the resources to “debt service for capital-related debt.”

The requirements in the implementation guide are category B GAAP and thus are authoritative. The guide’s requirements are effective for “fiscal years beginning after June 15, 2026, and reporting periods thereafter.”

For more information, see the press release on the GASB’s Web site.