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CITY OF SAN LEANDRO <br />MEMORANDUM ON INTERNAL CONTROL <br />JUNE 30, 2012 <br /> <br />SCHEDULE OF OTHER MATTERS <br /> <br />Review Draft 6/18/2013 5:11:57 PM <br /> <br />GASB 63 - Financial Reporting of Deferred Outflows of Resources, Deferred Inflows of Resources, <br />and Net Position <br /> <br />This Statement provides financial reporting guidance for deferred outflows of resources and deferred <br />inflows of resources. Concepts Statement No. 4, Elements of Financial Statements, introduced and <br />defined those elements as a consumption of net assets by the government that is applicable to a future <br />reporting period, and an acquisition of net assets by the government that is applicable to a future reporting <br />period, respectively. Previous financial reporting standards do not include guidance for reporting those <br />financial statement elements, which are distinct from assets and liabilities. <br /> <br />Concepts Statement 4 also identifies net position as the residual of all other elements presented in a <br />statement of financial position. This Statement amends the net asset reporting requirements in Statement <br />No. 34, Basic Financial Statements—and Management’s Discussion and Analysis—for State and Local <br />Governments, and other pronouncements by incorporating deferred outflows of resources and deferred <br />inflows of resources into the definitions of the required components of the residual measure and by <br />renaming that measure as net position, rather than net assets. <br /> <br />The objective of this Statement is to provide guidance for reporting deferred outflows of resources, <br />deferred inflows of resources, and net position in a statement of financial position and related <br />disclosures. <br /> <br />State and local governments enter into transactions that result in the consumption or acquisition of net <br />assets in one period that are applicable to future periods. Concepts Statement No. 4, Elements of Financial <br />Statements, identifies those consumptions or acquisitions as deferred outflows of resources and deferred <br />inflows of resources, respectively, and distinguishes them from assets and liabilities. This Statement <br />provides guidance for reporting deferred outflows of resources and deferred inflows of resources <br />balances. <br /> <br />Concepts Statement 4 identifies net position as the residual of all other elements presented in a statement <br />of financial position. It is the difference between (a) assets and deferred outflows of resources and (b) <br />liabilities and deferred inflows of resources. This Statement provides guidance for reporting net position <br />within a framework that includes deferred outflows of resources and deferred inflows of resources, in <br />addition to assets and liabilities. <br /> <br />SUMMARY: <br /> <br />• Statement of Net Position The statement of net position should report all assets, deferred outflows <br />of resources, liabilities, deferred inflows of resources, and net position. Governments are <br />encouraged to present the statement of net position in a format that displays assets, plus deferred <br />outflows of resources, less liabilities, less deferred inflows of resources, equals net position, <br />although a balance sheet format (assets plus deferred outflows of resources equals liabilities plus <br />deferred inflows of resources, plus net position) may be used. Regardless of the format used, the <br />statement of net position should report the residual amount as net position, rather than net assets, <br />proprietary or fiduciary fund balance, or equity. Net position represents the difference between all <br />other elements in a statement of financial position and should be displayed in three components— <br />net investment in capital assets; restricted (distinguishing between major categories of <br />restrictions); and unrestricted. <br />