The Changing Face of Governmental Financial Reporting

Thomas Cox, CPA

The last three years have seen the most far-reaching changes in governmental financial reporting since the introduction of the integrated reporting model. These changes have primarily affected the reporting of financial position at both the fund and government-wide levels, as well as the inclusion of greater detail on the face of the financial statements. Since 2010, the balance sheets of governmental financial statements have been refined to show five enhanced constraint classifications for fund balances. Furthermore, all fund and government-wide presentations must now report two additional categories of financial position: deferred outflows and deferred inflows. For analysts, accountants, and auditors, these changes to governmental financial statements present challenges—not only in ensuring compliance with accounting standards, but also in understanding new interpretations of fair presentation.