GASB proposal addresses transition concern in pension standards

BY KEN TYSIAC

GASB issued a proposal Tuesday that is designed to eliminate a potential source of understatement during a state or local government’s transition to the board’s new pension standard.

Under the current transition provisions, a GASB news release states, there is potential for understatement of restated beginning net position and expense during the first year that a state or local government implements GASB Statement No. 68, Accounting and Financial Reporting for Pensions.

GASB’s proposed statement would require, during transition, recognition of a beginning deferred outflow of resources for a state or local government’s pension contributions made between the measurement date of the beginning net pension liability and the beginning of the initial fiscal year of implementation.

This amount would be recognized regardless of whether it is practical to determine the beginning amounts of all other deferred outflows and inflows of resources related to pensions.

The provisions would take effect simultaneously with Statement No. 68, which is required to be applied in fiscal years beginning after June 15, 2014. GASB seeks comments on the proposal by Aug. 26.

GASB approved two new standards on pensions in June 2012. As a result of the new standards, unfunded pension liabilities will begin appearing on the balance sheets of state and local governments that provide defined benefit pensions.

Ken Tysiac ( ktysiac@aicpa.org ) is a JofA senior editor.

SPONSORED REPORT

How to make the most of a negotiation

Negotiators are made, not born. In this sponsored report, we cover strategies and tactics to help you head into 2017 ready to take on business deals, salary discussions and more.

VIDEO

Will the Affordable Care Act be repealed?

The results of the 2016 presidential election are likely to have a big impact on federal tax policy in the coming years. Eddie Adkins, CPA, a partner in the Washington National Tax Office at Grant Thornton, discusses what parts of the ACA might survive the repeal of most of the law.

QUIZ

News quiz: Scam email plagues tax professionals—again

Even as the IRS reported on success in reducing tax return identity theft in the 2016 season, the Service also warned tax professionals about yet another email phishing scam. See how much you know about recent news with this short quiz.