GASB issues guidance on deferred outflows and deferred inflows, plus technical corrections

BY KEN TYSIAC

In separate statements of standards for state and local governments issued Monday, GASB clarified the appropriate reporting of deferred outflows and deferred inflows of resources, and issued technical corrections to resolve conflicting accounting and financial reporting guidance.

GASB issued Statement No. 65, Items Previously Reported as Assets and Liabilities, and Statement No. 66, Technical Corrections—2012.

Statement No. 65 reclassifies and recognizes certain items currently reported as assets and liabilities as one of four financial statement elements:

  • Deferred outflows of resources.
  • Outflows of resources.
  • Deferred inflows of resources.
  • Inflows of resources.


GASB Statement No. 4, Elements of Financial Statements, requires that deferred outflows and deferred inflows be recognized only in those instances specifically identified in GASB pronouncements. Statement No. 65 provides that guidance.

Statement No. 66 removes the provision that limits fund-based reporting of a state and local government’s risk financing activities to the general fund and the internal service fund type, amending Statement No. 10, Accounting and Financial Reporting for Risk Financing and Related Insurance Issues. This requires governments to base their decisions about governmental fund type usage for risk financing activities on the guidance in Statement No. 54, Fund Balance Reporting and Governmental Fund Type Definitions.

In addition, Statement No. 66 amends Statement No. 62, Codification of Accounting and Financial Reporting Guidance Contained in Pre-November 30, 1989 FASB and AICPA Pronouncements. Statement No. 66 modifies specific guidance on accounting for:

  • Operating lease payments that vary from a straight-line basis.
  • The difference between the initial investment, or purchase price, and the principal amount of a purchased loan or group of loans.
  • Servicing fees related to mortgage loans sold when the stated service fee rate differs significantly from a current or normal servicing fee rate.


This guidance is designed to eliminate uncertainty regarding the application of Statement No. 13, Accounting for Operating Leases With Scheduled Rent Increases, and provide guidance consistent with requirements in Statement No. 48, Sales and Pledges of Receivables and Future Revenues and Intra-Entity Transfers of Assets and Future Revenues.

Both statements are effective for periods beginning after Dec. 15, 2012, and would be applied on a prospective basis. GASB encourages early adoption.

For information on ordering Statements No. 65 and 66, visit gasb.org.

Ken Tysiac ( ktysiac@aicpa.org ) is a JofA senior editor.

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