The Governmental Accounting Standards Board has issued two new accounting statements, one covering items previously reported as assets and liabilities, which clarified the appropriate reporting of deferred outflows and inflows of resources, and another statement containing technical corrections to resolve conflicting guidance.

Statement No. 65, “Items Previously Reported as Assets and Liabilities,” clarifies the appropriate reporting of deferred outflows of resources and deferred inflows of resources to ensure consistency in financial reporting. GASB noted that its earlier GASB Concepts Statement No. 4, "Elements of Financial Statements," specified that recognition of deferred outflows and deferred inflows should be limited to those instances specifically identified in authoritative GASB pronouncements. As a result, guidance was needed to determine which balances being reported as assets and liabilities should actually be reported as deferred outflows of resources or deferred inflows of resources, according to the definitions in Concepts Statement 4. Based on those definitions, Statement 65 reclassifies and recognizes 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.

The other new standard, Statement No. 66, “Technical Corrections—2012,” enhances the usefulness of financial reports by resolving conflicting accounting and financial reporting guidance that could diminish the consistency of financial reporting.

Statement 66 amends Statement No. 10, “Accounting and Financial Reporting for Risk Financing and Related Insurance Issues,” by removing 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. As a result, governments would base their decisions about governmental fund type usage for risk financing activities on the definitions in Statement No. 54, “Fund Balance Reporting and Governmental Fund Type Definitions.”

This Statement also amends Statement No. 62, “Codification of Accounting and Financial Reporting Guidance Contained in Pre-November 30, 1989 FASB and AICPA Pronouncements,” by modifying the specific guidance on accounting for (1) operating lease payments that vary from a straight-line basis, (2) the difference between the initial investment (purchase price) and the principal amount of a purchased loan or group of loans, and (3) servicing fees related to mortgage loans that are sold when the stated service fee rate differs significantly from a current (normal) servicing fee rate. These changes would eliminate any uncertainty regarding the application of Statement No. 13, “Accounting for Operating Leases with Scheduled Rent Increases,” and result in guidance that is consistent with the requirements in Statement No. 48, “Sales and Pledges of Receivables and Future Revenues and Intra-Entity Transfers of Assets and Future Revenues,” respectively.

The provisions of both Statements are effective for periods beginning after Dec. 15, 2012, and would be applied on a prospective basis.  Early adoption is encouraged.

For information on ordering Statements 65 and 66, visit

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