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Read this article if you are responsible for preparing or reviewing governmental financial statements for governmental agencies.

The Governmental Accounting Standards Board (GASB) issued Statement No. 105, Subsequent Events to enhance the transparency, consistency, and value of financial reporting related to events that occur after the financial statement date, but before the financial statements are issued. The statement realigns existing guidance by clearly describing the subsequent events' time frame, distinguishing between recognized and non-recognized subsequent events, and providing specific disclosure requirements. 

Why GASB issued Statement No. 105 

Preceding guidance on subsequent events existed within the GASB literature. However, governmental entities and auditors sometimes differed in their determination of what events should be recognized in the financial statements and what should be disclosed in the notes to the financial statements. Also, there were differing interpretations regarding how long subsequent events should be evaluated. As a result, GASB 105 seeks clarity by establishing clear definitions and precise disclosure requirements, with the intention of improving comparability and transparency for financial statement readers.

Defining subsequent events and the evaluation period 

GASB 105 clearly defines subsequent events as transactions or other events that occur after the date of the financial statements, but before the financial statements are available to be issued. 

The guidance defines the date the financial statements are available to be issued as the date when: 

• The financial statements are complete in form and format that comply with generally accepted accounting principles
• All approvals necessary for issuance have been obtained

This clarification is important because it provides an endpoint for evaluating subsequent events across all governmental entities. GASB 105 also stipulates that governmental entities disclose the date through which subsequent events were evaluated, providing financial statement readers more transparency pertaining to the scope of management review. 

Recognized and non-recognized subsequent events 

A critical feature of GASB 105 is the clear distinction between recognized and non-recognized subsequent events. 

Recognized subsequent events are those that provide additional context about conditions that existed as of the financial statement date. These occurrences impact amounts or estimates reported in the financial statements, and therefore, require adjustments to the financial statements. 

Examples may include the following: 

• Information received after year-end that confirms the impairment of an asset that existed at the financial statement date 
• Outcome of litigation that provides additional evidence about conditions present at year-end 

In these cases, the financial statements should be adjusted to reflect the new information. 

Non-recognized subsequent events are events that relate to conditions that came about after the financial statement date. These events do not impact the amounts reported in the financial statements for the period being reported. However, it may still be important to financial statement readers. 

Examples may include: 

• Issuance of long-term debt after year-end 
• Major natural disasters occurring after the financial statement date 
• Government combinations or disposals completed after year-end 

Although these events are not recognized in the financial statement, GASB 105 requires that significant non-recognized subsequent events be disclosed in the notes to the financial statements. 

Disclosure requirements for non-recognized events 

For non-recognized subsequent events that are significant, GASB 105 requirements specify that the following be disclosed: 

• A description of the nature of the event 
• An estimate of the financial effect, if such an estimate can be made 
• A statement that an estimate cannot be made, if applicable 

These disclosure requirements are intended to help financial statement readers receive relevant information about occurrences that could impact their understanding of a government’s financial position or future operations. 

What GASB 105 means for governments  

Although GASB 105 provides new recognition or measurement concepts, it may require governmental entities to revisit existing financial reporting practices. Specifically, governmental entities should seek to evaluate whether their financial statement preparation, review, and approval processes clearly identify the point at which financial statements are issued. In most cases, internal policies or governing body approval practices may need clarification to provide consistent application of the subsequent events evaluation period. 

Governmental entities should help ensure that staff responsible for financial reports understand the distinction between recognized and non-recognized subsequent events and are prepared to identify and document events occurring throughout the evaluation process. The use of an implementation checklist could aid in this process. 

What to avoid when implementing GASB 105 

As governments implement GASB 105, several common pitfalls may arise: 

• Assuming the audit report date defines the subsequent events evaluation period 
• Failing to disclose the date through which subsequent events were evaluated 
• Treating all subsequent events as disclosure-only items 
• Having inadequate documentation supporting the classification of events as recognized or non-recognized 

Effective date and transition 

The requirements of GASB 105 are effective for fiscal years beginning after June 15, 2026, and for all reporting periods thereafter. Earlier application is encouraged. 

Governmental entities that are considering early adoption should evaluate their financial reporting timelines and approval processes so they can appropriately identify and assess subsequent events through the newly defined “available to be issued” date. 

Audit considerations 

GASB 105 may impact audit planning by extending the period through which subsequent events must be evaluated and documented. Early communication between management and auditors can help support expectations related to timing, documentation, and disclosure of subsequent events. 

Governance and oversight implications 

Since subsequent events may involve significant financing decisions, legal matters, or operational changes, GASB 105 has implications beyond the accounting function. Governing bodies and oversight officials should be aware that events occurring after year-end but before financial statements are issued may still require evaluation and disclosure. Clear communication between management, governing bodies, and auditors can help ensure that significant events are appropriately identified, evaluated, and disclosed in a timely manner. 

Plan for implementation 

GASB 105 represents a meaningful refinement of subsequent events guidance for governmental entities. By defining the evaluation period, distinguishing between recognized and non-recognized events, and standardizing disclosure requirements, the statement enhances the usefulness and consistency of governmental financial reporting. Government entities should begin planning now for smooth implementation. 

BerryDunn’s team of governmental professionals is well-versed in helping entities implement new GASB standards. We can assist with assessing current processes for identification and evaluation of transactions or other events occurring during the subsequent events' time frame. We can also update financial statement templates so that the required subsequent event note disclosures are included. Contact us to learn how we can support you in preparing for the implementation of GASB 105. Learn more about our team and services. 

Maine business owners, this one's been a long time coming.

After years of advocacy from the Maine CPA community and business organizations, Governor Janet Mills' supplemental budget proposal includes a Pass-Through Entity Tax (PTET) for Maine, which would be effective for tax years beginning January 1, 2026. If enacted, partnerships and S corporations will finally have access to a federal tax planning strategy that businesses in 36 other states have been using for years. Maine has been late to the party, but the party has started!

Why the pass-through entity tax matters to Maine businesses

Here's the backstory. The 2017 Tax Cuts and Jobs Act capped the federal deduction for state and local taxes (SALT) at $10,000 per year for individual taxpayers. For many business owners, that cap wiped out a meaningful federal deduction on income that was already being taxed at the state level. C-corporations never had this problem, as they've always been able to deduct state income taxes in full at the entity level. The PTET would level the playing field by shifting the tax obligation from the individual to the entity, where it can be deducted without hitting the SALT cap.

OBBBA impact on the pass-through entity tax

When the One Big Beautiful Bill Act (OBBBA) was signed on July 4, 2025, it changed the math again. The OBBBA temporarily raised the individual SALT cap from $10,000 to $40,000 for tax years 2025 through 2029. Good news, right? For many business owners, the answer was “yes.” But the headline number doesn't tell the whole story.

The expanded cap phases out aggressively for higher earners. If your modified adjusted gross income exceeds $500,000, that $40,000 cap starts shrinking; if your income is above $600,000, you're effectively back to $10,000. For Maine's most successful pass-through entity owners, the expanded SALT cap may provide little or no individual relief. For that group, the PTET remains the more powerful tool.

For owners in the $300,000 to $500,000 range, the analysis is more nuanced. The expanded cap may partially cover your deduction needs, but when you add up property taxes, state income taxes, and other SALT items, the entity-level election often still makes sense—especially when you can potentially stack the full PTET deduction at the entity level on top of up to $40,000 of personal SALT items.

How Maine's PTET works

The election is made annually on a timely-filed Maine return and is irrevocable once the filing deadline passes. The tax is calculated on the entity's aggregate Maine-source income—grossed up for the PTE tax itself—at Maine's highest individual marginal rate of 7.15%. Members then receive a 90% refundable credit against their individual Maine income tax for their share of what the entity paid.

That 90% matters. Maine is joining Massachusetts and a handful of other states that offer less than a full 100% credit, which means there's a built-in 10% cost to the election. In most cases, the federal benefit will outweigh that haircut—but it requires analysis. This isn't a one-size-fits-all recommendation.

What if your business has nonresident members?

If your entity has nonresident members, there's an additional wrinkle: the electing PTE must pay estimated tax equal to 10% of the PTE tax allocated to each nonresident member, due within 30 days of the entity return's due date. The upside: Nonresident members whose only Maine-source income flows through electing PTEs may be able to skip filing a Maine individual return entirely if their credits cover the liability.

The bottom line: A win for Maine businesses

For high-income pass-through entity owners—especially those above the $500,000 MAGI threshold—the PTET election is likely the primary tool for capturing federal tax relief. For owners in the middle-income ranges, the interaction between the expanded personal SALT cap and the entity-level election needs careful modeling. And for everyone, that 10% non-refundable component means that a thoughtful calculation is needed before a decision is made.

This is a real win for Maine's business community—assuming it crosses the finish line. If you own a partnership or S corporation with Maine operations, now is the time to start the conversation so you're ready to move when it does. The election is annual, irrevocable once the deadline passes, and the first necessary actions will be approaching fast.

About BerryDunn

Our seasoned tax professionals partner with you to offer practical, accessible guidance and develop detailed strategies that support your unique needs. We excel at tax strategy and solutions, placing an emphasis on building long-term relationships. Our deep expertise spans a full range of tax concerns, tax services, and consulting to support individuals, businesses, and nonprofit organizations. Our tax consultants are specialists in their industry, working closely with colleagues across the firm to deliver integrated, comprehensive solutions. Learn more about our services and team.

On February 20, 2026, the US Supreme Court issued a ruling on Learning Resources, Inc. v. Trump, a case challenging President Trump’s authority to impose tariffs under the International Emergency Economic Powers Act (IEEPA). In a 6-3 vote, the US Supreme Court ruled that IEEPA does not permit the President to impose tariffs.

Tariffs imposed under IEEPA

Prior to this ruling, the Trump Administration imposed significant tariffs under IEEPA. This law authorizes the President to act to address any unusual or extraordinary foreign threat that endangers national security, foreign policy, or the economy in the US if a national emergency is declared. President Trump declared such an emergency on April 2, 2025, citing the trade deficit and illegal immigration. The subsequent tariffs include:

• 10% minimum tariff on most imports
• 50% tariff on copper, steel, and aluminum
• 20 – 40% tariffs on most goods from Brazil, India, Canada, Mexico, and China

How can importers request refunds?

These tariffs are estimated to generate $175 billion in refunds for affected importers. Although the Court’s decision does not provide guidance on how importers should be refunded for these previously paid tariffs, it is expected that a refund procedure will be established through either the US Court of International Trade or US Customs and Border Protection (CBP). To prepare for these refunds, importers should:

• Compile entries and payment records related to IEEPA duties.
• Submit CBP Form 19 protests within 180 days of each entry’s liquidation, if not done so already. This 180-day deadline may be waived when refund procedures are established.
• Prepare for possible litigation in the US Court of International Trade.

What's next? 

While this is a significant “win” for US importers, Trump has asserted that he will continue to impose tariffs via alternative statutes that allow him to act. While these statutes may authorize the President to impose tariffs, these authorities are limited by time-based restrictions or approval from other governmental parties.

How BerryDunn can help

Our dedicated audit, tax, and consulting professionals understand the impact of tariffs and can assist with developing strategies for refunds as they become available. Learn more about our team and services. 

Read this article if you are the owner/investor, accounting manager, controller, or CFO at a SaaS company. 

Many software-as-a-service (SaaS) companies operate on a subscription-based model with large payments due up front. This article explores how these companies can manage the significant timing differences between financial reporting and IRS tax requirements.

The "tax surprise" in SaaS billing 

For SaaS companies, collecting three years of cash upfront is great for liquidity but creates a significant tax acceleration. While US Generally Accepted Accounting Principles (US GAAP) allow you to spread that revenue over the full three-year term as you deliver the service, the IRS generally only allows a one-year deferral. This means in year two, you may be taxed on the entire remaining contract balance, even though you haven’t "earned" it yet for financial reporting purposes.

Understanding the book and tax gap 

Under US GAAP, specifically ASC 606, revenue is recognized only as the service is actually delivered to the customer. Therefore, if a company receives payment of $600,000 for a three-year subscription on December 31, 2024, it has only "earned" the first year of that agreement by December 31, 2025. As a result, $200,000 is recognized as revenue, while $400,000 remains as "deferred revenue" on the balance sheet—representing services the company is still obligated to provide in the future. 

For financial reporting, this upfront cash helps with immediate operations, while the deferred revenue reflects the health of future recurring income. Unfortunately, the IRS views taxable income differently. 

The tax impact: IRC Section 451(c) 

While US GAAP focuses on when the service is earned through performance, federal tax law generally operates under the "all events test." For tax purposes, the IRS often considers income "fixed" the moment you have the right to the money or receive the payment. 

When payment is received up front, the law generally only allows you to pause tax recognition for one year. In the example above, you can defer the revenue for 2024. However, in 2025, the company must recognize the entire remaining balance ($600,000) as taxable income. This creates an additional $400,000 of taxable income in year two that hasn't been recognized for book purposes yet. 

The difference eventually reverses in 2026 and 2027, and the sudden tax acceleration in year two often catches businesses off guard. 

Strategic tax accounting and compliance 

Managing these timing differences requires proactive structuring. Key considerations include: 

• Deferral method election: Under IRC Section 451(c), taxpayers can elect to defer the recognition of advance payments to the year following receipt, rather than reporting it all immediately. 
• Accounting method changes: Moving to a deferral method typically requires filing IRS Form 3115 to formally change your tax accounting approach. 
• Applicable Financial Statements (AFS): Your ability to use these deferral methods often depends on whether your firm produces an "applicable financial statement," such as an audit or a review. 
• Contract structuring: If your company does not strictly need 100% of the cash on day one, structuring contracts with annual billing can eliminate the gap between book and tax reporting.

BerryDunn can help 

While "cash in hand" is usually the best option, it is vital to understand the tax ramifications that come with it. The accounting and tax experts in BerryDunn’s technology practice have advised many clients on navigating these multiyear contracts. Please reach out to your contact at the firm when entering into these agreements to ensure your tax planning stays ahead of your revenue growth. Learn more about our team and services. 

In 2025, our team completed projects in seven states and kicked off new work in 17 states, partnering with communities ranging from fewer than 12,000 residents to more than one million. These projects reflect the core of what our Parks, Recreation, and Libraries team does: helping agencies improve operations, drive innovation, identify improvements based on community need, and strengthen their brand and image. 

From master plans to feasibility studies to strategic and operational assessments, our 2025 work offered a clear look at what agencies are prioritizing—and where the field is heading. Here are the key trends we saw, along with what they mean for your agency. 

1. Sustainability is becoming a planning non‑negotiable 

Across communities in Colorado, North Carolina, Nevada, and beyond, agencies are increasingly incorporating sustainability into capital, operational, and master planning decisions. This aligns with our team's master planning approach, which integrates infrastructure assessments, levels of service analysis, and long-term operational considerations to build more resilient systems.  

What this means for agencies: 

• Consider lifecycle cost analysis for both new facilities and renovations. 
• Integrate sustainability and climate-resilience metrics into future master plans. 
• Use feasibility studies to evaluate long-term operational implications of amenities. 

2. Data-driven decision-making is accelerating 

Communities are increasingly turning to data to support transparent decision-making and long-term planning. Many 2025 projects—including fee studies, strategic plans, and PROST plans—highlighted the importance of diagnostic data collection, analysis, and community needs assessment so agencies can make informed decisions grounded in facts and local context.  

How this helps agencies: 

• Centralize the data you already collect (registration, attendance, maintenance). 
• Use data stories to better communicate funding needs to governing bodies. 
• Apply GIS mapping tools to identify equity gaps or underserved areas. 

3. Workforce resilience remains a top priority 

Staffing challenges, burnout, and shifting workforce needs emerged repeatedly throughout 2025—both in projects and in conversations at conferences. Many communities sought organizational assessments or strategic plans specifically to address staffing constraints, workload distribution, and long-term talent development. 

This trend aligns with our team’s emphasis on operational assessments and improving organizational effectiveness to help agencies create more sustainable internal systems and staff structures that support mission delivery.  

What agencies can do: 

• Revisit job descriptions to ensure they match current responsibilities. 
• Use organizational assessments to evaluate staffing structure and workload. 
• Invest in leadership development to build internal capacity. 

4. Community expectations are rising—and evolving 

Residents continue to voice strong expectations for transparency, access, and inclusivity in parks and recreation services. This aligns with our team’s strong emphasis on robust community engagement, which includes prioritizing needs, facilitating equitable input, and linking community feedback directly to planning recommendations.  

How agencies can respond: 

• Use engagement tools that reach a broad audience (mobile surveys, pop-up events). 
• Share “what we heard” summaries to build trust and accountability. 
• Ensure engagement findings directly inform budget and capital priorities. 

5. “One size fits all” planning no longer works 

In 2025, our team worked with communities ranging from small rural towns to large metropolitan regions. These widely different contexts confirm what our master planning methodology is built on: planning must be tailored to each community, grounded in local data, demographic realities, facility and system assessments, and achievable implementation strategies.  

How this helps agencies: 

• Use right-sized planning: mini master plans, targeted system reviews, or operational assessments. 
• Align planning scope and budget with your community’s capacity. 
• Use implementation tools like timelines, KPIs, and action plans to ensure follow-through. 

As you plan for the rest of the year, these patterns can help you benchmark your agency’s current priorities, consider emerging needs, and identify where additional planning, assessment, or visioning may support your goals. 

About BerryDunn

BerryDunn's parks, recreation, and libraries consultants work with you to improve operations, drive innovation, identify improvements to services based on community need, and elevate your brand and image―all from the perspective of our team’s combined 100 years of hands-on experience. We provide practical park solutions, recreation expertise, and library consulting. Learn more about our team and services.