Question: Which of the following statements is correct with respect to establishing reporting requirements for governments entering into derivative instruments? If a derivative is an investment derivative, the changes in the value of the derivative are deferred and reported in the Statement of Net Position. GASB standards regarding derivatives do not apply to proprietary funds. Changes in the value of hedge derivatives are deferred and reported in the Statement of Net Position. to search GASB standards regarding derivatives apply only to government financial statements prepared using the modified accrual basis of accounting.