GASB proposal addresses transition concern in pension standards

BY KEN TYSIAC
July 2, 2013

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.

PROFESSIONAL DEVELOPMENT: EARLY CAREER

Making manager: The key to accelerating your career

Being promoted to manager is a key development in a young public accountant’s career. Here’s what CPAs need to learn to land that promotion.

PROFESSIONAL DEVELOPMENT: MIDDLE CAREER

Motivation and preparation can pave the path to CFO

CPAs in business and industry face intense competition to land a coveted CFO job. Learn how to best prepare yourself for the role.

PROFESSIONAL DEVELOPMENT: LATE CAREER

Second act: Consulting

CPAs are using experience to carve out late-career niches. Learn how to successfully make a late-career transition to consulting, from CPAs who have done it.