GASB Statement Nos. 63 and 65 Changes to Financial Statement Reporting

Word version


This letter is to inform local education agencies (LEAs) of changes to financial statement reporting standards as a result of the implementation of Governmental Accounting Standards Board (GASB) Statement Nos. 63 and 65. The specific requirements of GASB Statement Nos. 63 and 65 can be accessed on GASB's website at http://www.gasb.org/jsp/GASB/Page/GASBSectionPage&cid=1176160042391. These statements apply to school districts, regional education service centers, governmental charter holders, and college and university charter holders. These statements do not apply to non-profit charter holders with exempt status under Section 501(c)(3) of the Internal Revenue Code.

GASBStatement No. 63 - FinancialReporting of Deferred Outflows of Resources, Deferred Inflows of Resources, and Net Position

GASB Statement No. 63 establishes standards for reporting deferred outflows of resources, deferred inflows of resources, and net position in a statement of financial position and related disclosures. The provisions of this Statement are effective for financial statements for periods beginning after December 15, 2011. Therefore, LEAs should incorporate the requirements from GASB Statement No. 63 in its financial statements for the fiscal year ending in 2013.

GASB Statement No. 63 will impact the financial statements primarily as stated below.

  • The former Statement of Net Assets should be referred to as the Statement of Net Position.
  • Deferred outflows of resources should be reported in a separate section following assets in a Statement of Net Position and should be coded to the 1700 series of object codes (data control codes) in the Financial Accountability System Resource Guide (FASRG). For the electronic data feed, only total deferred outflows will be collected.
  • Deferred inflows of resources should be reported in a separate section following liabilities in a Statement of Position and should be coded to the 2600 series of object codes (data control codes), which will be added to the FASRG. For the electronic data feed, only total deferred inflows will be collected.
  • LEAs are encouraged to present the Statement of Net Position in a format that displays assets, plus deferred outflows of resources, less liabilities, less deferred inflows of resources, equals net position, although a balance sheet format (assets plus deferredoutflows of resources equals liabilities plus deferred inflows of resources, plus net position) may be used. Net position should be displayed in three components-net investment in capital assets, restricted (distinguishing between major categories of restrictions), and unrestricted.
  • The Governmental Fund Balance Sheet should be presented in a format that displays assets plus deferred outflows of resources, equals liabilities plus deferred inflows of resources, plus fund balance.

GASB Statement No. 65 - Items Previously Reported as Assets and Liabilities

GASB Statement No. 65 establishes accounting and financial reporting standards that:

  • reclassify, as deferred outflows of resources or deferred inflows of resources, certain items that were previously reported as assets and liabilities, and
  • recognizes, as outflows of resources or inflows of resources, certain items that were previously reported as assets and liabilities.

The provisions of this Statement are effective for financial statements for periods beginning after December 15, 2012. Therefore, LEAs should incorporate the requirements from GASB Statement No. 65 in its financial statements for the fiscal year ending in 2014. However, earlier application is encouraged.

Updated Financial Statement Templates

The implementation of GASB Statements 63 and 65 requires reporting changes to the current Statement of Net Assets and the Balance Sheet and terminology changes across several statements. The Texas Education Agency (TEA) has updated the templates for Exhibit A-1 (Statement of Net Assets) and Exhibit C-1 (Balance Sheet), which are located on the TEA's Financial Accountability System Resource Guide webpage at http://www.tea.state.tx.us/index2.aspx?id=1222&menu_id=645.

Contact Information

If you have any questions concerning these financial reporting changes, please contact Paul Moreno, Manager of Financial Desk Reviews in the Division of Financial Compliance, at (512) 475-2228 or paul.moreno@tea.texas.gov.

 

Sincerely,

Lisa Dawn-Fisher, Ph. D.
Associate Commissioner for School Finance / Chief School Finance Officer