GASB 94: New accounting standard for public-private and public-public partnerships (P3s)
91¸£ÀûÉç will implement GASB 94 in fiscal year 2023. This new standard provides updated guidance for public-private and public-public partnerships (P3s). Ìý
A P3 is an arrangement that 91¸£ÀûÉç enters into with a third party, where the third party is given the right to operate or use a nonfinancial asset (either tangible or intangible) owned by 91¸£ÀûÉç in order to provide public services. The third party receives payment for providing the services to the public and in turn compensates 91¸£ÀûÉç in order to use the asset to earn that revenue.Ìý
The most common P3s for universities are arrangements to provide public services on behalf of auxiliary units. For example, a third party might construct a student dormitory and be allowed to collect payments from 91¸£ÀûÉç students who stay in the dorm. In exchange, 91¸£ÀûÉç will own the dormitory at the end of the term of the agreement.
In addition to P3 agreements where third parties provide public services on behalf of 91¸£ÀûÉç, 91¸£ÀûÉç must also recognize any P3 agreements where 91¸£ÀûÉç is allowed to use a governmental entity’s nonfinancial asset to provide public services on behalf of that governmental entity.
Please send any P3 agreements to Justin Church (justin.church@colorado.edu), whether a third party is providing public services on behalf of 91¸£ÀûÉç or if 91¸£ÀûÉç is providing public services on behalf of another governmental entity. Ìý