GASB issues guidance on accounting for P3s and APAs

By Ken Tysiac

GASB issued a standard Monday that is designed to improve state and local governments’ accounting for public-private and public-public partnership arrangements (known as P3s) and availability payment arrangements (known as APAs).

The guidance is included in GASB Statement No. 94, Public-Private and Public-Public Partnerships and Availability Payment Arrangements. The standard provides guidance for P3 arrangements, including those outside the scope of GASB’s existing literature in Statement No. 60, Accounting and Financial Reporting for Service Concession Arrangements, and Statement No. 87, Leases.

The new standard also is designed to make certain improvements to the guidance previously included in Statement 60 and provides accounting and financial reporting guidance for APAs.

P3 guidance

Under Statement 94, a P3 is defined as an arrangement in which a government transferor contracts with a governmental or nongovernmental operator to provide public services by conveying control of the right to operate or use a nonfinancial asset, such as infrastructure or other capital asset (the underlying P3 asset), for an amount of time in an exchange or exchange-like transaction.

Some P3s meet the definition of a service concession arrangement (SCA). Statement 94 carries forward the financial reporting requirements for SCAs that were included in Statement 60, with modifications to apply the more extensive requirements related to recognition and measurement of leases to SCAs.

P3s that meet the definition of a lease should apply the guidance in Statement 87, according to GASB, if existing assets of the transferor that are not required to be improved by the operator as part of the P3 arrangement are the only underlying P3 assets and the P3s do not meet the definition of an SCA.

For all other P3s, Statement 94 provides specific guidance from the perspectives of both a government that transfers rights to another party and governmental operators that receive those rights.

APA guidance

An APA is defined under Statement 94 as an arrangement in which a government compensates an operator for services that may include designing, constructing, financing, maintaining, or operating an underlying infrastructure or other nonfinancial asset for an amount of time in an exchange or exchange-like transaction.

Statement 94 requires governments to account for APAs related to those activities and in which ownership of the asset transfers by the end of the contract as a financed purchase of the underlying infrastructure or other nonfinancial asset. It also requires a government to report an APA that is related to operating or maintaining a nonfinancial asset as an outflow of resources (for example, expense) in the period to which payments relate.

Statement 94 is effective for fiscal years beginning after June 15, 2022, and all reporting periods thereafter. In recognition of the coronavirus pandemic, the effective date was delayed one year beyond what GASB had proposed in its exposure draft.

Ken Tysiac ( is the JofA’s editorial director.


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