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

I believe there was an effect on ratio analysis when governments implemented GASB Statement 65; however, the extent of the effect is directly related to the number and volume of transactions a government previously reported as assets and liabilities. I will demonstrate this with a continuation of the examples I provided in my response to the first discussion question. Before GASB Statement No. 65, a government would record property tax revenue for the next fiscal period as a liability; however, now the property tax is recorded as a deferred inflow of resources. With all other variables held constant, this change would make the assets divided by liabilities ratio increase, the liabilities divided by net position ratio decreases, and the liabilities divided by revenues ratio to decrease. Before GASB Statement No. 65, a grantee government would record grand funds received in a period before they are available as a liability, and the grantor government would record the grant funds as a grant expense. Currently, the grantee government records the grants funds as a deferred inflow, and the grantor government records the grant funds as a deferred outflow. Holding all other variables constant, the ratios for the grantee government would be the same as the previous property tax example. The ratios for the grantor government would stay the same for assets divided by liabilities and liabilities divided by net position and would decrease for liabilities divided by revenues.