GASB Proposes Guidance for Financial Reporting of Deferred Outflows of Resources, Deferred Inflows of Resources, and Net Position

***Comments on Proposed Statement Are Due by February 25, 2011***

Norwalk, CT, November 24, 2010—The Governmental Accounting Standards Board (GASB) today issued its Exposure Draft (ED), Financial Reporting of Deferred Outflows of Resources, Deferred Inflows of Resources, and Net Position. The deadline for submitting written comments on the ED is February 25, 2011.

The ED proposes requirements for the reporting of deferred inflows of resources, deferred outflows of resources, and net position in a statement of financial position. It would improve financial reporting by reducing uncertainty regarding the financial statement presentation of deferrals and their effects on a government’s net position.

The proposed requirements would result in certain 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. When Statement 34 was issued in 1999, it required the presentation of assets, liabilities, and net assets in a statement of financial position. However, in 2007, the GASB issued Concepts Statement No. 4, Elements of Financial Statements, which identifies and defines five elements that make up a statement of financial position. In addition to assets and liabilities, that Concepts Statement 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.

The provisions of 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.

Copies of the Exposure Draft may be downloaded free of charge from

About the Governmental Accounting Standards Board

The GASB is the independent, not-for-profit organization formed in 1984 that establishes and improves financial accounting and reporting standards for state and local governments. Its seven members are drawn from the Board’s diverse constituency, including preparers and auditors of government financial statements, users of those statements, and members of the academic community. More information about the GASB can be found at its website