Reporting Requirements for Annual Financial Reports of State Agencies and Universities

Notes & Samples

NOTE 28 – Deferred Outflows of Resources and Deferred Inflows of Resources
Sample (Illustrative, may not tie to exhibits)

In fiscal 20CY, Sample Agency used derivatives to cover its bonds. These derivatives were classified as hedging derivatives. Sample Agency recorded deferred outflows of resources for some of its hedging derivatives and deferred inflows of resources for others — and disclosed its hedging derivatives in Note 7.

Sample Agency had bond refunding transactions and recorded deferred outflows of resources for losses related to the transactions.

Sample Agency recorded deferred outflows of resources and deferred inflows of resources related to its employees’ pension administered by TRS — and disclosed the pension information in Note 9.

Sample Agency purchased a new x-ray machine that has an asset retirement obligation (ARO) — and disclosed it as an ARO in Note 5.

Sample Agency (as a lessor) entered into a lease for building space and recorded a deferred inflow of resources. This lease is disclosed in Note 8.

Sample Agency had a government acquisition of private ABC University and recorded deferred outflows of resources for the excess consideration over the net position acquired — and disclosed the acquisition in supplemental Note XX.

Sample Agency also had a public-private partnership (PPP) with a private company and recorded deferred inflows of resources related to the arrangement. The PPP is disclosed in Note 27.

In addition, Sample Agency also earned dividends on its investments in foreign companies but would not receive them within 60 days after the fiscal year-end. Sample Agency reported the dividends to be received as deferred inflows of resources in its governmental fund.

Sample Agency presented the deferred outflows of resources and deferred inflows of resources related to its derivatives, bond refunding transactions, employee pension, government acquisition, PPPs and dividends from foreign investments in the following Note 28.

Note 28 – Deferred Outflows of Resources and Deferred Inflows of Resources

In fiscal 20CY, Sample Agency reported deferred outflows of resources and deferred inflows of resources in connection with its hedging derivative instruments, bond refunding transactions, employee pension, government acquisition and dividends from foreign investments as presented below.

August 31, 20CY

Deferred outflows of resources of $12,367,488 in business-type activities were related to hedging derivatives in a liability position, losses related to bond refunding transactions, employee pension and excess consideration provided over net position acquired in private ABC University. Deferred inflows of resources of $1,088,521 were related to hedging derivatives in an asset position and employee pension. The ARO deferred outflows of resources, the net hedging derivative liability of $375,527 and the components of pension deferred outflows of resources of $1,962,532 and deferred inflows of resources of $1,071,022 are disclosed in Note 5, Note 7 and Note 9, respectively.

Deferred inflows of resources of $5,254,633 in governmental activities were related to a PPP entered into by the agency with a private company. This amount reflects the unamortized balance of up-front concession payments received and capital assets acquired from this company. Details of Sample Agency’s PPP are disclosed in Note 27.

Deferred inflows of resources of $27,520 in governmental funds were related to dividends earned on investments in foreign companies but not available within 60 days after the fiscal year-end.

Sample Agency must also:

• Make a cross reference between the detailed notes and Note 28.
• Tie the Note 28 total for deferred outflows of resources and deferred inflows of resources for governmental activities, business-type activities and governmental funds (respectively) to the basis conversion fund, proprietary fund and governmental fund section of its financial statements.