Accounting and Financial Reporting

Flight Plans: Recognizing and accounting for different types of PILOTs

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Tucked among the 21 proposed questions and answers (Q&A) in the Governmental Accounting Standard Board (GASB) exposure draft, Implementation Guidance Update—2025, is a proposed clarification about whether payments in lieu of taxes (PILOTs) represent subsidies.

Subsidies are defined and distinguished in proprietary fund and stand-alone business-type activities financial statements in accordance with guidance in GASB Statement No. 103, Financial Reporting Model Improvements.2 Like so many questions about accounting, the answer is (drum roll…): “It depends.”

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