GASB has issued guidance that requires governments to disclose information about risks related to certain concentrations and constraints.
GASB Statement No. 102, Certain Risk Disclosures, defines a concentration as "a lack of diversity related to an aspect of a significant inflow of resources or outflow of resources."
The statement defines a constraint as "a limitation that is imposed by an external party or by formal action of a government's highest level of decision-making authority."
Examples of a concentration include when a small number of companies represent a majority of employment in a government's jurisdiction or when a government relies on one source for most of its revenue. Learn more.