Main Question: What is opinion on this student's response? Please see below.

The second discussion question for this week plays off our first question in a way. Mainly, due to the effect, GASB statement 65 had on the recognition of an element and creating a standard to classify certain transactions, e.g., 'elements that were previously classified as an asset or liability' are now classified as a deferred outflow or inflow of resources. Also, Statement 63 laid out where deferrals should present on the financial statement(s) - and their effects on an organization's net position.

I agreed with GASB, for the need to separate these classifications because of the nature of deferrals being in a future period. However, to answer this second question, Statements 63 & 65 could affect the 'creditworthiness of governmental debt issuers.' These statements set the standards to classify a deferral, as well as create their own section within the government's financial statements. As pointed out in Statement 63, it will ultimately affect a government's net position. Thus, changing the ratios a municipal bond market would factor when examining a government's financial health. (Basing calculation as stated above on assets, liabilities, revenue, net position, etc.)