GASB issued an exposure draft that it said would improve financial reporting by reducing uncertainty regarding the financial statement presentation of deferrals and their effects on a government’s net position. GASB said the proposal would provide guidance where none existed.


GASB said in a press release that the ED, Financial Reporting of Deferred Outflows of Resources, Deferred Inflows of Resources, and Net Position, proposes requirements for the reporting of deferred inflows of resources, deferred outflows of resources, and net position in a statement of financial position.


The proposed requirements would result in amendments to the requirements of Statement no. 34, Basic Financial Statements—and Management’s Discussion and Analysis—for State and Local Governments, and related pronouncements. GASB said that when Statement no. 34 was issued in 1999, it required the presentation of assets, liabilities and net assets in a statement of financial position. However, in 2007, GASB issued Concepts Statement no. 4, Elements of Financial Statements, which identifies and defines five elements that make up a statement of financial position. Besides assets and liabilities, Concepts Statement no. 4 introduced the elements of deferred outflows of resources and deferred inflows of resources, and established the residual measure as net position, rather than net assets. For this reason, and because recent GASB pronouncements have either already addressed, or are expected to address, transactions requiring the use of deferred outflows of resources or deferred inflows of resources, guidance is needed to address their presentation in financial statements, GASB said.


The proposed Statement would be effective for financial statements for periods beginning after June 15, 2011, with earlier application encouraged. Accounting changes adopted to conform to the provisions of this Statement would be applied retroactively. The ED is available at The comment period closed Feb. 25.


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