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Reporting Requirements for Annual Financial Reports of State Agencies and Universities

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Reporting Requirements for Annual Financial Reports of State Agencies and Universities

Notes & Samples

NOTE 18 – Management’s Discussion and Analysis (MD&A)
MD&A GASB 34 v GASB 103

The Management’s Discussion and Analysis (MD&A) under GASB 103 is intended to be:

  • Shorter
  • More analytical
  • Focused on major financial changes

The biggest operational changes agencies will see:

  • The required financial summary table
  • Less narrative explanation of minor fluctuations
  • A clearer five-section MD&A structure
Topic GASB 34 (Previous Model) GASB 103 (New Model – Fiscal 2026)
Purpose of MD&A Narrative overview of financial statements and activities. Often lengthy and descriptive. Focused analytical overview highlighting significant financial matters. Designed to reduce boilerplate discussion.
Structure General guidance on topics to cover but no strict format. Agencies often used long narrative sections. Structured format with five required sections, creating more consistency across agencies.
Overview of Financial Statements Required explanation of the basic financial statements and how they relate to each other. Still required but expected to be concise and not repeat information already in the statements.
Financial Highlights Narrative discussion of key financial results. Replaced by a required Financial Summary table presenting condensed comparative financial information.
Condensed Financial Information Encouraged but not required in table form. Required comparative summary table including assets, liabilities, net position, revenues, expenses and changes in net position.
Discussion of Financial Position Broad discussion of changes in assets, liabilities and net position. Often very detailed. Discussion must focus only on significant changes in financial position. Minor fluctuations must not be discussed.
Results of Operations Narrative explanation of revenues, expenses and changes in net position. Still required but focused on major financial drivers rather than detailed explanations of every variance.
Capital Asset Discussion Required description of capital asset activity. Still required but focused on significant capital asset activity only.
Long-Term Debt Discussion Required discussion of debt activity and limitations. Still required but limited to significant long-term financing activity.
Budgetary Discussion Often included significant discussion of budget variances. Not emphasized. Budgetary analysis must only be included if it has material impact.
Economic Factors / Future Outlook Required discussion of currently known facts, decisions or conditions affecting financial position. Still required, but more clearly emphasized as a forward-looking section.
Level of Detail Expected Often lengthy with repetitive explanations of financial statements. Shorter, analytical and focused on major financial changes.