Governmental Accounting Standards Board (GASB) Exposure Draft on Reporting Items Previously Recognized as Assets and Liabilities
Summary: On August 17, 2011, the GASB issued the Exposure Draft Reporting Items Previously Recognized as Assets and Liabilities. The proposed Statement identifies transactions currently classified as assets or liabilities that should be reclassified as either deferred outflows of resources or deferred inflows of resources. The Statement is proposed to become effective 2012-13. The Exposure Draft is available on the GASB Web site.
The CDE expects the impact of this proposed Statement on local educational agencies (LEAs) to be minimal. There are a few transactions identified that may require LEAs to reclassify certain assets or liabilities as deferred outflows or deferred inflows of resources, but these transactions probably occur infrequently.
Background: GASB Concepts Statement 4, Elements of Financial Statements, identifies two new financial statement elements – deferred outflows of resources and deferred inflows of resources. Concepts Statement 4 also specifies that recognition of these financial statement elements should be limited to instances specifically identified in GASB authoritative pronouncements. GASB 63, Financial Reporting of Deferred Outflows of Resources, Deferred Inflows of Resources, and Net Position, provides financial statement presentation guidance for deferred outflows and inflows of resources but does not specifically identify items that should be recognized as such.
Implications for local educational agencies (LEAs): As noted above, a few transactions identified in the proposed Statement that should be reclassified as deferred outflows or deferred inflows of resources may apply to LEAs, including but not limited to:
Deferred outflows of resources:
- Resources advanced to another government in relation to a government-mandated nonexchange transaction or a voluntary nonexchange transaction when a time requirement is the only eligibility requirement that has not been met by the other government
- Deferred debit amounts resulting from the refunding of debt
Deferred inflows of resources:
- Resources received in advance in relation to a government-mandated nonexchange transaction or a voluntary nonexchange transaction when time requirements are the only eligibility requirement that has not been met by the receiving government
- Deferred credit amounts resulting from the refunding of debt