GASB issued two exposure drafts that the board said would establish a definition of pension plan that reflects the primary activities of a fund that is used to provide pensions—the accumulation and management of assets dedicated for pensions and the payment of pensions to plan members as the benefits come due. The board said the proposed amendments to existing pension standards would improve how the costs and obligations associated with the pensions that state and local governments provide to their employees are calculated and reported.


“It is important to note that these proposals relate to accounting and financial reporting, not to how governments approach the funding of their pension plans,” GASB Chairman Robert Attmore said in a press release. “Pension funding is a policy decision made by government officials.”


The first ED, Accounting and Financial Reporting for Pensions—an amendment of GASB Statement No. 27 (Pension ED), primarily relates to reporting by governments that provide pensions to their employees. The second ED, Financial Reporting for Pension Plans—an amendment of GASB Statement No. 25 (Pension Plan ED), addresses the reporting by the pension plans that administer those benefits.


The Pension ED proposes that governments be required to report in their statement of financial position a net pension liability, which is the difference between the total pension liability and net assets (primarily investments reported at fair value) set aside in a qualified trust to pay benefits to current employees, retirees and their beneficiaries. It also proposes significant changes to how a government would calculate its total pension liability and pension expense. These changes include:

  • Immediate recognition of more components of pension expense than is currently required, including the effect on the pension liability of changes in benefit terms, rather than deferral and amortization over as many as 30 years, which is common for funding purposes.
  • Use of a discount rate that applies (a) the expected long-term rate of return on pension plan investments for which plan assets are expected to be available to make projected benefit payments and (b) the interest rate on a tax-exempt, 30-year, AA-or-higher-rated municipal bond index to projected benefit payments for which plan assets are not expected to be available for long-term investment in a qualified trust.
  • A single actuarial cost allocation method—“entry age normal”—rather than the current choice among six actuarial cost methods.
  • Requiring governments participating in cost-sharing, multiple-employer pension plans to record a liability equal to their proportionate share of any net pension liability for the cost-sharing plan as a whole.
  • Requiring governments in all types of covered pension plans to present more extensive note disclosures and required supplementary information. The Pension ED addresses situations in which another entity contributes to a government’s pension plan on behalf of the employer. It also addresses accounting and financial reporting for employers that provide pensions through defined contribution plans.


The Pension Plan ED, which addresses financial reporting for plans that are administered through qualified trusts, outlines the basic framework for the separately issued financial reports of defined benefit pension plans. It also details proposed note disclosure requirements for defined contribution pension plans.


Comments on the proposals are due Sept. 30.


GASB also released a comprehensive plain-language supplement to assist nonaccountant users of financial statements in commenting on the Pension ED. The board will host public hearings on the proposals on Oct. 3, Oct. 13 and Oct. 20, and user discussion forums on Oct. 4, Oct. 14 and Oct. 21. Locations and other details, including instructions for registering to participate, are explained in the EDs, which are available at



  GASB issued a Preliminary Views (PV) document on concepts related to recognition of elements of financial statements and measurement approaches. The board said the PV, Recognition of Elements of Financial Statements and Measurement Approaches, presents its early views on how and when an item should be reported(recognition) on state and local government financial statements and how the amount of the item reported on those statements should be determined (measurement approach).


The document is available at


The board is seeking comments on the PV by Sept. 30 and has scheduled public hearings on the document for Oct. 4 in New York City; Oct. 14 in San Francisco; and Oct. 21 in Chicago. Complete details, including how to participate in the hearings, are available in the PV.


The PV says that recognition concepts encompass two aspects of financial statements—measurement focus and basis of accounting. The measurement focus of a specific financial statement determines what items should be reported as assets, liabilities and other elements of that financial statement. The related basis of accounting determines when those items should be reported.


The PV proposes a recognition framework for financial statements prepared using either the “economic resources” measurement focus or the “near-term financial resources” measurement focus. The latter would, from a conceptual standpoint, replace the existing “current financial resources” measurement focus that is used in governmental fund financial reporting. The proposed recognition framework also includes proposed concepts related to recognition of deferred outflows of resources and deferred inflows of resources that would assist the board in determining when those elements should be used in the standard-setting process.


The document proposes a framework for when each of two primary measurement approaches, on a conceptual basis, should be used. The primary measurement approaches are:

  • Initial-transaction-date-based measurement (initial amount). The transaction price or amount assigned when an asset was acquired or a liability was incurred, including subsequent modifications to that price or amount, such as through amortization or depreciation.
  • Current-financial-statement-date-based measurement (remeasured amount). The amount assigned when an asset or liability is remeasured as of the financial statement date, including fair value; current acquisition, sales and settlement price; replacement cost; and value-in-use.


The PV identifies characteristics of assets or liabilities that would indicate from a conceptual viewpoint when each measurement approach would be appropriately applied in future standard setting.



  FASAB issued a proposal to defer the effective date of a technical bulletin related to asbestos cleanup costs.


The exposure draft of Technical Bulletin 2011-2, Extended Deferral of the Effective Date of Technical Bulletin 2006-1, Recognition and Measurement of Asbestos-Related Cleanup Costs, proposes to delay by one year the effective date of Technical Bulletin 2006-1, Recognition and Measurement of Asbestos- Related Cleanup Costs, to enable federal agencies to finalize their methodology and develop an estimate of their asbestos-related liabilities.


The comment period closed Aug. 3. If adopted, the effective date of Technical Bulletin 2006-1 would be changed to periods beginning after Sept. 30, 2012. The ED is available at



  A FASAB committee issued a report that contains recommendations to assist in developing implementation guidance for federal General Property, Plant & Equipment (G-PP&E). The report, Records Retention Timeframes for Property, Plant, & Equipment Research Report, is not an authoritative source of generally accepted accounting principles.


FASAB’s Accounting and Audit Policy Committee (AAPC) established the G-PP&E Task Force to create the report. The Record Retention Subgroup of the AAPC G-PP&E Task Force addressed record retention time frames and methods (hardcopy vs. electronic) for document retention that supports property, plant & equipment (PP&E) reported in agencies’ general-purpose financial statements. The subgroup considered multiple aspects of record retention such as permanent PP&E records, transactional PP&E records, and hard copy vs. electronic records. The subgroup researched record-retention practices and requirements and guidance related to the subject in federal government and private-sector accounting and other standards. In particular, the subgroup reviewed the National Archives and Records Administration’s (NARA) record-retention regulations and guidance applicable to federal agencies and visited with NARA’s record-retention specialist.


The subgroup’s recommendations to NARA are not intended as guidance for the audit/oversight community, FASAB said in a press release. For example, the recommendations are not meant to address the sufficiency of evidence to be able to draw conclusions, measure the validity of evidence, or infringe on the judgment of the oversight community. The report is intended for agency management as general guidance to assist with consistency across government regarding PP&E record retention.


The report is available at


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