On Its Proprietary Funds Statement of Net Position, a State

Multiple Choice

On its proprietary funds statement of net position, a state reports deferred outflows of $6 million related to derivatives. Which of the following might explain this amount?

A) The derivatives are classified as assets.
B) The derivatives swap variable rate for fixed rate debt, and interest rates have declined.
C) The derivatives are held as income-earning investments, and their value has increased.
D) The derivatives no longer qualify for hedge accounting.