Accounting
Financial Management
Fixed Asset Management
GASB 94: Public-Private Partnerships and Availability Payment Arrangements
Last updated: October 12, 2026 · Independent guide · We do not sell rankings or coverage.
GASB 94 is the Governmental Accounting Standards Board standard for public-private and public-public partnerships (PPPs) and availability payment arrangements (APAs). When your government lets an operator run one of its assets to provide a public service, you keep or record the underlying asset, record a receivable for installment payments, and record a deferred inflow of resources that becomes revenue over the PPP term. When you pay an operator based on an asset’s availability, the design, build and finance component is a financed purchase and the maintenance component is an expense.
GASB 94 in brief
- Who it applies to: all state and local governments reporting under GAAP, including transit authorities, public universities, school districts, cities and counties. Operator accounting applies only when the operator is itself a government.
- Requirement: transferors recognize the asset (or a receivable for it), an installment receivable and a deferred inflow; governmental operators recognize a right-to-use asset and a liability; APAs split into a financed purchase and an expense.
- Threshold: GASB sets no dollar threshold. The standard “need not be applied to immaterial items.”
- Key dates: issued March 2020; effective for fiscal years beginning after June 15, 2022, so the year ended June 30, 2023 for a government with a June 30 year-end. GASB 104 adds separate disclosure of right-to-use assets that governmental operators recognize under GASB 94 for fiscal years beginning after June 15, 2025.
- Official source: GASB Statement No. 94 (March 2020). It supersedes GASB 60 on service concession arrangements. We checked the rule and every source below on October 12, 2026.
What GASB 94 requires
What counts as a PPP, an SCA and an APA
Paragraph 5 defines a PPP as an arrangement in which a government (the transferor) “contracts with an 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” for a period of time in an exchange or exchange-like transaction. The operator can be a private company or another government.
A PPP is also a service concession arrangement (SCA) when all four paragraph 6 criteria are met: the operator gives significant consideration such as an up-front payment or a new facility; the operator is paid by third-party fees; the transferor determines or can approve the services, the customers and the rates; and the transferor keeps a significant residual interest in the asset at the end.
An APA under paragraph 7 is the reverse flow of cash. The government pays the operator to design, construct, finance, maintain or operate an asset, and the payments are “based entirely on the asset’s availability for use rather than on tolls, fees, or similar revenues or other measures of demand.” The government keeps demand risk.
| Arrangement | Typical example | Standard that applies |
|---|---|---|
| PPP over existing assets, no required improvements, not an SCA | Operator leases an existing parking garage as is | GASB 87 (paragraph 9) |
| SCA | Developer builds campus housing, collects rents at university-approved rates, building reverts to the university | GASB 94, paragraphs 14–15 |
| PPP with a new asset, not an SCA | Developer builds and sets its own rates, then transfers ownership | GASB 94, paragraph 16 |
| APA | Transit authority pays a fixed annual sum for a maintained rail facility, reduced if it is unavailable | GASB 94, paragraphs 76–83 |
Transferor recognition: asset, receivable and deferred inflow
- Underlying asset. An existing asset stays on your books at carrying value. A new SCA asset and any operator improvements are recognized at acquisition value when placed into service. You keep depreciating, unless the contract requires the operator to return the asset in its original condition (paragraphs 18–21).
- Receivable for the underlying asset. For a new asset that is not an SCA, you record a receivable at the operator’s estimated carrying value on the expected transfer date (paragraph 31).
- Receivable for installment payments. Present value of fixed payments, index-based payments at the commencement-date index, and fixed-in-substance payments, discounted at the rate you charge the operator. Usage-based payments and revenue sharing stay out and are recognized as revenue in the period they relate to (paragraphs 22–26).
- Deferred inflow. The sum of the installment receivable, any up-front payment, the new asset or improvements, and any asset receivable, recognized as revenue in a systematic and rational manner over the PPP term (paragraphs 32–33).
- Initial direct costs such as negotiation and legal costs are expensed (paragraph 17).
Governmental funds record only the installment receivable and a deferred inflow equal to that receivable plus any up-front payment, and recognize revenue over the term if available (paragraph 34). The capital asset appears only in the government-wide statements.
The operator side
A government that is the operator records an installment liability at present value and an intangible right-to-use asset, amortized over the shorter of the PPP term or the asset’s useful life. If it builds a new asset in a non-SCA PPP, it keeps the asset and records a liability and a deferred outflow equal to the estimated carrying value it will hand over. Governmental funds report an expenditure and other financing source at commencement and treat later payments as debt service (paragraphs 37–56).
APAs
Design, construction and financing components in which ownership transfers by the end of the contract are a financed purchase. Operation and maintenance components are expensed in the period the payments relate to. You split the components using contract prices if they are not unreasonable, or your best estimate; if neither is practicable, you account for the components as a single contract based on its primary component (paragraphs 77–83).
Illustrative entry set
Illustration only. These figures are constructed to show the mechanics and are not from any real contract. In a 30-year SCA, a developer builds $40,000,000 of student housing on a public university’s land, pays $2,000,000 at commencement and $300,000 at each year-end at a stated 5% rate, charges university-approved rents, and returns the building at the end. The term starts when the building opens. In a 25-year APA, a transit authority pays $8,000,000 a year in arrears for a rail maintenance facility: $5,500,000 for design, build and finance and $2,500,000 for maintenance, discounted at its 4.5% borrowing rate.
- University receivable. $300,000 × 15.37245 (30-year annuity factor at 5%) = $4,611,735.
- Deferred inflow. $4,611,735 + $2,000,000 + $40,000,000 = $46,611,735, recognized at $1,553,725 a year.
- Year 1. Interest is $4,611,735 × 5% = $230,587; the receivable falls by $69,413.
- Transit financed purchase. $5,500,000 × 14.82821 (25-year factor at 4.5%) = $81,555,149. Year 1 interest is $3,669,982; the obligation falls by $1,830,018.
| Account | Debit | Credit | When |
|---|---|---|---|
| University: Buildings / Deferred inflow, PPP | $40,000,000 | $40,000,000 | Placed into service |
| University: Cash; PPP receivable / Deferred inflow, PPP | $2,000,000; $4,611,735 | $6,611,735 | Commencement |
| University: Cash / Interest revenue; PPP receivable | $300,000 | $230,587; $69,413 | End of year 1 |
| University: Deferred inflow, PPP / PPP revenue | $1,553,725 | $1,553,725 | Each year |
| Transit: Capital asset / Financed purchase obligation | $81,555,149 | $81,555,149 | Placed into service |
| Transit: Interest expense; Obligation; Maintenance expense / Cash | $3,669,982; $1,830,018; $2,500,000 | $8,000,000 | End of year 1 |
The university keeps depreciating the building, since no original-condition return is required. A revenue share would be recognized only in the period it relates to. This illustration records the APA asset at completion; if title passes in stages, agree the construction-in-progress timing with your auditor.
Who is exempt
- PPPs that are leases over existing transferor assets with no required improvements and no SCA features follow GASB 87 (paragraph 9).
- Immaterial items. There is no short-term exception or dollar threshold, so your materiality policy decides.
- Private operators. Operator provisions apply only to governmental operators (footnote 1).
Deadlines and penalties
GASB 94 applied to fiscal years beginning after June 15, 2022, retroactively by restating prior years if practicable, measured using facts at the start of the implementation year (paragraphs 84–86). GASB 104 (September 2024) requires right-to-use assets that operators recognize under GASB 94 to be disclosed separately by major class of underlying public-public partnership asset from fiscal years beginning after June 15, 2025, so June 30, 2026 is the first year-end for a government with a June 30 fiscal year.
GASB has no penalties of its own. Its former chair told Congress that “the GASB does not have enforcement authority”; compliance runs through state laws and audit opinions (Robert Attmore, March 28, 2012).
Records you must keep and what to disclose
Transferors disclose a description of each PPP, including construction status and how variable payments are set; the assets and deferred inflows recognized; discount rates; inflows from variable payments and termination penalties; rights retained or granted; and guarantees and commitments (paragraphs 35–36). Operators add liabilities and deferred outflows, principal and interest for each of the next five years and in five-year increments, and impairment components (paragraphs 57–59). GASB 94 has no APA-specific disclosure paragraph. Keep the signed contract and amendments, the SCA and term analysis, the rate support, the operator’s carrying value estimate, and amortization schedules.
What to set up in your systems
A lease module is a natural starting point, but a PPP needs fields a lease record lacks. Track these per contract, whether in your ledger, your contract management system or a lease tool:
| Data field | Why you need it | GASB 94 paragraph |
|---|---|---|
| Classification (PPP-lease, SCA, non-SCA PPP, APA) and answers to each test | Drives which entries apply | 5–9 |
| Commencement, placed-in-service and transfer dates; options and reasonably-certain conclusions | PPP term and recognition timing | 10–16 |
| Payment schedule split into fixed, index-based and usage-based amounts; up-front payment | Receivable or liability measurement; variable payment disclosure | 22–24, 40–41 |
| Discount rate and source | Present value and disclosure | 25, 42 |
| Asset ID, acquisition value, useful life, return-condition clause | Depreciation in your fixed asset register | 18–21 |
| Component prices (asset, financing, O&M) and allocation method | Splitting PPP and APA components | 60–65, 79–83 |
| Construction status, guarantees, commitments, amendment log | Disclosures; modification versus termination | 35–36, 66–75 |
Crunchafi (formerly LeaseCrunch), a lease accounting vendor, documents a workaround that enters a transferor PPP as a GASB 87 lessor and books the asset and deferred inflow through custom GL accounts or outside the system (Crunchafi, no date shown). If you have only a few PPPs, a reviewed spreadsheet schedule feeding manual journal entries can be enough. Ask any vendor to demonstrate a deferred inflow that includes a constructed asset. See also our guide to lease accounting software.
How we researched this
We read GASB Statement No. 94 and GASB 104 in full and checked all sources on October 12, 2026.
Related guides
- GASB 87 Lease Accounting: Entries, Example and Software
- GASB 96 SBITAs: Rules, Journal Entries and Example
- GAAP vs GASB: Governments, Public Colleges and Nonprofits
Frequently asked questions
What is the difference between a PPP and an APA under GASB 94?
In a PPP the operator pays or provides value to the government for the right to run an asset and usually earns fees from the public. In an APA the government pays the operator based on whether the asset is available, and keeps demand risk.
Is a university student housing deal a PPP?
Often. If a developer builds housing on campus, collects rents and returns the building, it is a PPP. It is an SCA only if the university also approves rates and services and keeps a significant residual interest.
Is there a short-term exception in GASB 94?
No. Unlike GASB 87 and 96, GASB 94 has no 12-month exception, because “the Board believes that short-term arrangements do not occur in PPPs” (paragraph B14). Small arrangements fall to your materiality policy.
When did GASB 94 take effect?
For fiscal years beginning after June 15, 2022, which for a June 30 year-end government was fiscal 2023. Prior years were restated where practicable.
Sources
- GASB Statement No. 94, Public-Private and Public-Public Partnerships and Availability Payment Arrangements, March 2020
- GASB Statement No. 104, Disclosure of Certain Capital Assets, September 2024
- Robert H. Attmore, testimony to the House Financial Services Subcommittee on Capital Markets and Government Sponsored Enterprises, March 28, 2012
- Crunchafi (LeaseCrunch), How to enter a PPP subject to GASB 94 as transferor, no date shown (vendor)
Sherman Hsieh
Independent analysis of enterprise software — ERP, CRM and more
