GASB 103 – Financial Reporting Model Improvements

GASB Statement No. 103, Financial Reporting Model Improvements, is effective for fiscal years ending June 30, 2026. This Statement updates several aspects of the governmental financial reporting model, including Management’s Discussion and Analysis (MD&A), presentation of unusual or infrequent items, required supplementary information (RSI) and certain proprietary fund reporting requirements.

One of the primary changes under GASB 103 is the revision of MD&A requirements to focus on significant financial matters and improve readability for users of the financial statements. The Statement also requires governments to separately present unusual or infrequent items in the financial statements, rather than reporting them within regular operating activity.

Districts should be aware that GASB 103 will primarily impact financial statement presentation and disclosures rather than the underlying accounting records. We will work with your district during the audit to ensure the new reporting requirements are properly implemented.

As part of these changes, GASB 103 places additional emphasis on explaining financial variances within the MD&A and the Required Supplementary Information (RSI) budgetary comparison schedules. The following page outlines the variance explanations Districts should be prepared to document during the year to ensure compliance with the updated reporting model.

Required Supplementary Information – Budgetary Comparison

Districts should be prepared to explain significant variances at the function level for:

Examples of common explanations:

• Timing difference in grant revenue/expenditures resulting from reimbursement-based programs
• Variations in staffing levels during the year, including retirements, new hires, or vacancies
• Capital purchases or equipment replacements that were in the original budget
• Changes in State aid funding, enrollment, or other revenue sources compared to budget
• Fluctuations in employee benefit costs, including retirement, health insurance changes, etc.

Management’s Discussion and Analysis – Year-to-Year Variances

Districts should be prepared to explain major fluctuations between current year and prior year financial results, including areas such as:

Examples of common explanations:

• Increase or decrease in federal grant revenue/expenditures compared to the prior year due to changes in program funding or timing of grant activity
• Capital additions or construction projects completed during the year affecting expenditures
• Changes in student enrollment or State budget impacting State aid revenue
• Changes assumptions affecting pension or OPEB liabilities and related deferred inflows/outflows
• Planned use of fund balance to support operations, capital projects, or one-time expenditures

Webinar: 2026 GASB Update

Join Maner’s education team for our annual GASB update webinar on Thursday, May 14, from 10 to 11 a.m. We’ll discuss the latest GASB updates for schools, including:

• GASB 103: Financial Reporting Model Improvements
• GASB 104: Disclosure of Certain Capital Assets
• Uniform Guidance Updates

Don’t miss out on the chance to gain valuable insights into financial and reporting strategies—and to ask your questions about GASB best practices. Register for the webinar today and stay ahead of compliance requirements while optimizing your financial management practices!