Municipal bond analysts calculate a variety of ratios when analyzing the creditworthiness of governmental debt issuers. Many of these ratios include asset and liability amounts, such as assets divided by liabilities, liabilities divided by net position, and liabilities divided by revenues. What do you think the effect wason ratio analysis when governments implemented GASB Statement 65? Please explain your answer.

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

If the changes in net position resulting from GASB Statement 65 were significant, there would have been a major impact on ratio analysis, especially during the transition year where the element variances would have been distinguished from the previous year. This might have resulted in miscalculations and the mischaracterization of the creditworthiness of an entity. Initially, I believe GASB Statement 65 would have complicated ratio analysis due to what, I believe, would be a learning curve. I would like to assume that analysts were prepared for the change and educated on the adjustments required in order to accurately perform their ratio analysis. Most likely, the transition period was more complicated due to inconsistencies and incomparability between a government's statement before and after the implementation of GASB Statement 65. I also think it would have been incumbent upon the government entity to initiate education procedures regarding the impact upon their financial statements. This explanation should have been quantified to allow for the variation in outcomes on the financial statements. The education process would have been necessary and critical to appropriately apply the ratios with a complete understanding of the pre GASB Statement 65 and post GASB Statement 65, in order to accurately analyze creditworthiness of the government entity.