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GASB Statement 102 Goes Into Effect on 6/30 – What to Know

Matt Geerdes

Jun 24 2025

4 min read

Summary

The Government Accounting Standards Board (GASB) issued Statement 102,¹ titled “Certain Risk Disclosures,” taking effect for fiscal years beginning after June 15, 2024. As entities with a June 30, 2025 fiscal year-end begin closing their books, this standard must be considered during the process.
This statement improves financial reporting by highlighting risks that could impact a state and local government. It requires an assessment of disclosure criteria for both the primary government reporting unit and other reporting units with revenue debt liabilities.
Accounting teams must ensure compliance with the GASB statement by identifying and assessing “concentrations” or “constraints” that meet disclosure thresholds, their financial impact and expected timing. This applies to the adoption year and beyond, aligning with other public financial disclosures.

Purpose

GASB Statement 102 aims to respond to government vulnerability risks and the limitations of existing risk disclosures in financial reporting. Its purpose is to provide users of government financial statements with better information to understand and assess these risks. Further, they will be able to consider the disclosures of these risks as they analyze the government’s financial condition.

The statement requires governments to assess disclosure criteria at the primary government-level, including its blended component units as defined in Statement 14.² It also mandates a separate assessment for other reporting units with revenue debt liabilities.

Scope and Applicability

GASB Statement 102 sets disclosure requirements for risks in all state and local government financial statements, caused by financial vulnerabilities with a substantial impact due to concentrations or constraints. A “substantial impact” is considered a financially disruptive effect on the normal functioning of a government, with a magnitude that is more than significant. GASB opted for a narrower scope to ensure consistency and reliability in reporting. The scope excludes risks related to estimates and operations but includes environmental factors that could impact resource access and spending. Cybersecurity risks and ESG concerns aren’t covered but may be in future guidance.

What are “Concentrations” and “Constraints”?

GASB Statement 102 defines concentrations as “a lack of diversity related to an aspect of a significant inflow of resources or outflow of resources.” A constraint is considered “a limitation imposed on a government by an external party or by formal action of the government’s highest level of decision-making authority.” Simply put, a “concentration” is a reliance on one funding source or expense type. And a “constraint” is a restriction imposed by an outside party or top internal stakeholders that limits how the government can use money.

Disclosure Criteria

Governments must disclose risks in their financial statements if:

A concentration or constraint is known before issuing the report
The concentration or constraint makes the entity vulnerable to the risk of a substantial impact
An event related to this risk has occurred, is happening or is likely to occur within a year of issuing the statements

The disclosure should clearly explain the concentration or constraint, as well as the nature of the government’s vulnerability to this risk. Explanation requirements include:

A clear description of the concentration or constraint
Any related events associated with the concentration or constraint that could cause a substantial impact, if they’ve taken place or are beginning to occur
Actions taken by the government to mitigate this risk before issuing the financial statement

Key Considerations for Governments and Auditors

Governments regularly deal with financial concentrations and constraints, which may now require disclosure in financial statement notes. To ensure consistency, they should align these disclosures with other publicly available documents, such as budgets. GASB Statement 102’s requirements may overlap with existing note disclosures, so governments should consolidate information where appropriate to avoid redundancy.

Auditors should review whether internal controls related to financial disclosures need updating. They should assess all concentrations and constraints to ensure proper disclosure, confirm that a complete set of relevant risks has been identified, and verify that financial statements include all required disclosure elements.

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About the Author

Matt Geerdes

Matt Geerdes is a principal with over 24 years of experience providing auditing and consulting services. Matt works closely with entities in the government and not-for-profit sectors, including municipalities, state agencies and state universities, community colleges, school districts, special districts and educational foundations. He regularly serves as a subject-matter expert on specific accounting topics pertaining to the Governmental Accounting Standards Board, authoring technical whitepapers and accounting memos, instructing educational courses on accounting and auditing topics, and speaking at industry events across the country.