GASB Outlines Potential Improvements to Pension Standards


GASB issued a Preliminary Views document, Pension Accounting and Financial Reporting by Employers, listing what it believes are the most fundamental issues related to recognition and measurement of pension obligations by state and local government employers. The approach presented would move governmental pension accounting and reporting away from the current funding approach, and introduce recognition and measurement standards that would be based on GASB’s conceptual framework, including information that would help financial statement users better assess the degree to which interperiod equity has been achieved. In the context of GASB’s interperiod reporting concepts, interperiod equity refers to the state in which current-period inflows of resources (or acquisitions of net assets) equal current-period costs of services.

 

GASB is seeking comments on those views before developing more detailed proposals for changes to existing accounting and financial reporting standards. Comments are due Sept. 17. The board said it will begin deliberations in July on pension note disclosures and supporting information for government employers and pension plan reporting issues.

 

The Preliminary Views document is part of the board’s overall project to consider improvements to the existing standards of accounting and financial reporting for postemployment benefits. GASB periodically reviews its standards to determine whether they continue to effectively meet their objectives.

 

GASB said most of the issues in the Preliminary Views benefited from constituent feedback received in response to the board’s March 2009 Invitation to Comment, Pension Accounting and Financial Reporting. The board received written comments from nearly 120 individuals and organizations and held two days of public hearings. The board addressed the feedback it received in developing its Preliminary Views.

 

GASB also released a plain-language supplement to assist users of financial statements in commenting on the Preliminary Views.

 

GASB will host public hearings on the Preliminary Views on Oct. 13, 8:30 a.m. CDT at the Hyatt Regency Dallas-Fort Worth Airport in Dallas; Oct. 14, 8:30 a.m. PDT at the offices of KPMG in San Francisco; and Oct. 27, 8:30 a.m. EDT at the Crowne Plaza LaGuardia in New York City. More details, and instructions for registering to participate in the hearings, will be announced in the coming weeks on GASB’s website .

 

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