The Governmental Accounting Standards Board (GASB) is seeking feedback on an Exposure Draft of a proposed Implementation Guide (IG) addressing subsidies in Statement No. 103, Financial Reporting Model Improvements. Written comments are due April 27, 2026.
The proposed IG includes a new Q&A (4.1) regarding the income statement presentation of supplemental payments to hospitals. As written, we believe the Q&A could create diversity in practice due to differences in interpretation of the guidance.
GASB No. 103 requires noncapital subsidies to be reported after operating income in the statement of revenues, expenses, and changes in fund net position. In the Q&A example, it may be interpreted that GASB believes Medicaid supplemental payments are not part of any contractual relationship between the patient and the government for
healthcare coverage, and the supplemental payments would meet the definition of subsidies, thus excluding them from operating revenues. We believe this presentation would be a significant change in practice for many governmental healthcare entities.
Draffin Tucker is responding to the Exposure Draft, and we encourage the healthcare community to also comment on aspects with which you agree as well as any with which you disagree.
Comments should be addressed to the Director of Research and Technical Activities,
Project No. 3-25, and emailed to director@gasb.org. Comments also may be submitted
through an electronic input form.
If you have any questions or would like assistance in responding to the proposed Q&As, please contact our Albany office at (229) 883-7878 or our Atlanta office at (404) 220-8494.
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