GASB Moves Infrastructure Forward and Moves “Going Concern” Out

GASB’s recent meeting discussed several active projects, including subsidies implementation guidance, infrastructure asset reporting, the Going Concern Uncertainties (GCU) and Severe Financial Stress (SFS) project, cybersecurity risk disclosures, and Revenue and Expense Recognition (RER).

Implementation Guide — Subsidies

The Board walked through an ED ballot draft for a proposed Implementation Guide, Financial Reporting Model Improvements — Subsidies. After considering a set of drafting and clarity edits, members indicated support for moving the document forward for public comment — an effort aimed at promoting more consistent application of the Subsidies guidance.

Infrastructure Assets

On the Infrastructure Assets project, GASB reviewed a near-final pre-ballot draft of the upcoming ED and continued to refine the proposal. One transition point remains especially important: at adoption, governments would reassess the estimated useful lives assigned to infrastructure. When that reassessment indicates prior depreciation was misstated, the government would adjust accumulated depreciation retroactively through a beginning-balance restatement.

Members also fine-tuned descriptive language within the infrastructure definition and examples to avoid over-reading of illustrative lists (including removing phrases such as “networks of” and dropping “drainage” from one set of examples).

In the same discussion, the Board revisited how the proposed disclosures — such as a historical-cost weighted-average age measure and indicators for assets that have reached specified life thresholds — should work when a government identifies components. The practical implication is that the disclosure calculations will hinge on a government’s componentization approach, making well-supported judgment and documentation important. Staff was asked to bring a ballot draft back for March 2026 deliberations.

Going Concern Uncertainties and Severe Financial Stress

For the GCU/SFS project, the Board debated whether an explicit “going concern” assessment should be required in addition to the project’s broader disclosure objectives related to SFS and uncertainty about continued existence.

GASB tentatively concluded that governments should not be required to perform a going concern evaluation and that the phrase going concern should be removed from GASB authoritative language.

“Going concern” can be understood in different ways in a governmental context, and GASB guidance does not currently define it. In addition, because GASB does not prescribe a separate basis of accounting when such uncertainty exists, the Board observed that introducing a going concern requirement could add complexity primarily in the form of disclosures, without changing measurement. The discussion, therefore, leaned toward clearer, more targeted disclosure requirements rather than importing a term that may be interpreted inconsistently.

Cybersecurity Risk Disclosures

GASB reviewed staff’s pre-agenda work exploring whether financial reporting could (or should) address cybersecurity risk, but the Board did not deliberate on requirements or make tentative decisions. The discussion noted that current reporting is uneven, with some governments including information about incidents, insurance, or related costs, while others provide limited cybersecurity-related information or present it inconsistently across reports.

Themes raised by stakeholders include the push-pull between usefulness and risk: users may want a clearer view of governance, preparedness, and response capability, yet highly specific disclosures could create security concerns and may be limited by state law.

The Board also acknowledged timing realities: incident information can be most valuable soon after events occur, while audited financial statements typically arrive later.

Finally, staff observed that direct dollar impacts reported to date may be small relative to overall spending, which complicates judgments about financial statement materiality even when service disruption is significant.

Revenue and Expense Recognition

RER deliberations continued to build out how amounts would be allocated as the Board works from binding arrangements down to transactions and, for Category A, to performance obligations. GASB tentatively supported allocating the total amount in a binding arrangement to the applicable recognition units of account, using an approach intended to portray the underlying economic activity of each transaction. For Category A transactions, the Board tentatively framed the objective as allocating the transaction amount to each performance obligation in a way that aligns with what the provider expects to be entitled to upon transferring control of distinct goods or services.

GASB also affirmed that this project is not intended to reopen allocation mechanics already addressed in Statements No. 87 (Leases), No. 94 (PPPs and Availability Payment Arrangements), and No. 96 (SBITAs); those methodologies and practical expedients would remain as issued.

In addition, the Board tentatively agreed that determining whether an arrangement is binding should consider customary practices, recognizing that consistently applied unwritten practices (such as routine grace periods) can affect which terms are substantively enforceable and therefore drive recognition.

What Governments Should Watch

The proposal’s infrastructure transition mechanics could be the most immediate planning item for many governments: a required useful-life reassessment and possible restatement may call for early involvement from engineering, public works, and fixed-asset teams. RER continues to signal a more structured model for identifying units of account and allocating consideration, potentially increasing the need for documentation around how arrangements are separated and priced — while leaving existing lease/PPP/SBITA allocation rules in place.

And although cybersecurity is still exploratory, GASB’s research highlights that any future disclosure direction will have to navigate security sensitivity, legal limitations, materiality judgments, and the lag between incident timing and financial statement issuance.

All decisions summarized here are tentative; final standards may differ. Governments should monitor GASB developments and await official issuance before implementing changes.

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