Government Advisory Insights

How Will GASB 103 Help Your Government Tell a Clearer Financial Story to Your Stakeholders?

By the JG Technical Committee  ·  Julian & Grube, Inc.  ·  June 2026

Instead of changing how governments account for money, GASB 103, "Financial Reporting Model Improvements," refines how financial information is presented and explained to readers. Governments should view GASB 103 as a financial reporting and communication improvement standard, one that aligns closely with long-standing expectations for clarity, transparency, and government-specific reporting.

What is GASB 103 designed to improve?

GASB 103 is intended to make your financial statements easier to understand by:

• Improving the usefulness of Management's Discussion and Analysis (MD&A)
• Clearly identifying one-time or unusual financial events
• Strengthening the connection between budgets and actual amounts
• Improving readability and consistency in the proprietary fund income statement for governments with enterprise-type activities (for example, internal service funds)

How GASB 103 promotes a more meaningful MD&A

MD&A is meant to tell the government's financial story in plain language. Under GASB 103, MD&A should focus less on repeating numbers presented in the basic financial statements and more on explaining why financial information changed from the prior year.

GASB 103 clarifies the structure of MD&A by limiting it to five focused sections and emphasizing explanations over boilerplate language. The MD&A sections will be:

• Overview of the Financial Statements
• Financial Summary
• Detailed Analyses
• Significant Capital Asset and Long-Term Financing Activity
• Current Known Facts, Decisions, or Conditions

This reinforces the expectation that MD&A be government-specific, informative, and written for readers without a technical accounting background.

How GASB 103 reinforces accountability in budgetary reporting

Budgetary comparison schedules remain a critical component of Ohio government financial reporting, given the State's emphasis on legal-level budgetary control. GASB 103 reinforces the importance of clearly presenting:

• The original budget approved by the governing body
• The final amended budget
• Actual results, with understandable explanations of significant variances
• Variance columns between the original and final budget, and between the final budget and the actual columns

GASB 103 also requires the budgetary amounts to be included in the Required Supplementary Information (RSI) or Supplementary Information (SI), and to include discussion of significant budgetary changes throughout the year.

How GASB 103 changes the proprietary statements

If your government has enterprise funds, such as internal service funds or funds where charges are meant to cover all of the costs of that fund, GASB 103 changes the income statement to define nonoperating revenues and expenses as follows:

• Subsidies received and provided
• Contributions to permanent and term endowments
• Revenues and expenses related to financing
• Resources from the disposal of capital assets and inventory
• Investment income and expense

What GASB 103 will require from you

• GASB 103 requires additional and expanded explanations within the MD&A. Your JG consultant may need to ask you additional questions to meet this requirement.
• GASB 103 requires additional and expanded explanations for budgetary variances in the RSI section. Your JG consultant may need to ask you additional questions to meet this requirement.
• If your entity uses proprietary funds, your JG consultant may have questions about specific revenues and expenses in order to properly classify them as operating or nonoperating for GASB 103.

Let's tell your financial story clearly

GASB 103 is about telling your financial story more clearly, and a little preparation goes a long way. That's exactly the kind of thing we help our local government clients work through. If you'd like help getting ready for GASB 103, reach out to Jason Cowman and our advisory team at jcowman@jg.cpa. We're always glad to help.