GASB Proposes Reclassifying Certain Assets and Liabilities

GASB issued an exposure draft that it said applies its conceptual definitions of deferred outflows of resources and deferred inflows of resources elements to a broader range of items to enhance consistency in state and local government financial statements. The ED says it would alleviate uncertainty regarding the classification of certain items that may appear to meet the definition of a deferred outflow of resources or a deferred inflow of resources.


The proposed statement, Reporting Items Previously Recognized as Assets and Liabilities , would reclassify or recognize certain items currently being reported as assets and liabilities as one of four financial statement elements—deferred outflows of resources, outflows of resources, deferred inflows of resources, or inflows of resources.

Currently, many items that appear to meet the definition of deferred outflows of resources and deferred inflows of resources according to Concepts Statement no. 4, Elements of Financial Statements , are not specifically identified as such throughout GASB’s authoritative literature, GASB said in a press release. GASB said that, because the Concepts Statement specifies that recognition of deferred outflows and deferred inflows should be limited to those instances identified in authoritative GASB pronouncements, governments need guidance to determine which balances should be reported as deferred outflows of resources or deferred inflows of resources rather than as assets or liabilities.

“This proposed statement identifies the items that the board has determined meet its conceptual definitions of the elements of a statement of financial position,” GASB Chairman Robert Attmore said in the press release. “We encourage stakeholders to review and comment on whether they agree or disagree with our conclusions.”

The proposal’s requirements would be effective for periods beginning after June 15, 2012, with earlier application encouraged. Comments on the ED are due Nov. 18.


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