State and local governments would be required for the first time to report unfunded pension liabilities on their balance sheets if GASB approves two proposed standards Monday.
Governments would be required to disclose a net pension liability that equals the difference between the total pension liability and the value of assets set aside in a pension plan. Although the standards would not be binding, state and local governments would have to meet them to receive clean opinions from auditors on their financial statements.
The GASB statements containing the standards are called Financial Reporting for Pension Plans and Accounting and Financial Reporting for Pensions.
GASB is meeting by teleconference from 1 to 5 p.m. Monday; instructions for public access are available on GASB’s website.
Audit firm rotation
The PCAOB will take the debate on auditor independence and audit firm rotation to California, holding its second public meeting on the topic Thursday in San Francisco.
Panelists will present opinions on a concept release issued by the PCAOB on Aug. 16, 2011. The release invited comment on how to increase auditor independence, objectivity, and professional skepticism. The event will be available via webast at the PCAOB’s site.
Limiting terms for audit firms was the most pressing issue discussed in the release and during a public forum on the topic March 21–22 in Washington.
Proponents have said mandatory audit firm rotation would reduce client pressure on auditors and offer a fresh look at companies’ financial reporting. Term limit opponents, including the AICPA, have said mandatory rotation would have “costly and unintended consequences.”
Financial instruments on FASB agenda
FASB will meet Tuesday to discuss three projects.
Impairment in the accounting for financial instruments, the definition of nonpublic entities, and repurchase agreements in transfers and servicing are the issues on FASB’s agenda.
A webcast of the meeting can be accessed at FASB’s website.
U.S. economy
Several economic indicators—home prices, consumer confidence, and GDP—will be closely watched this week to see if the U.S. economy is showing signs of another slowdown.
On Tuesday, The Conference Board is scheduled to release May consumer confidence figures. Preliminary figures, released early in the month, showed that consumer confidence has been falling.
Also on Tuesday, the S&P/Case-Shiller home price index will shed light on whether the housing market is following suit. Last month, the index showed that home prices were still falling in some of the nation’s biggest cities.
On Thursday, the Bureau of Economic Analysis will release its third estimate of first-quarter GDP, which consists of purchases of domestically produced goods and services by individuals, businesses, foreigners, and government entities. GDP increased slowly throughout 2011, accelerating in the fourth quarter of 2011. But initial estimates showed sluggishness during the first quarter.
—From JofA staff reports.
