GASB Issues OPEB, Bankruptcy Guidance Statements

December 31, 2009 ( - The Governmental Accounting Standards Board (GASB) on Thursday issued two statements of guidance, which it said were intended to make more consistent the measurement and reporting of other post-employment benefits (OPEB).

The rulemaking organization has released Statement No. 57, OPEB Measurements by Agent Employers and Agent Multiple-Employer Plans and Statement No. 58, Accounting and Financial Reporting for Chapter 9 Bankruptcies.

According to a GASB announcement, Statement 57 discusses measurement of OPEB obligations by certain employers participating in agent multiple-employer OPEB plans. (In agent multiple-employer plans, separate liabilities are calculated and separate asset accounts are kept for each participating government, rather than being administered and accounted for as a single plan as is done in a cost-sharing plan.)

Statement 57 amends Statement No. 43, Financial Reporting for Postemployment Benefit Plans Other Than Pension Plans, and Statement No. 45, Accounting and Financial Reporting by Employers for Postemployment Benefits Other Than Pensions.

Specifically, according to the announcement, Statement 57:

  • allows certain agent employers to use the alternative measurement method, a less complex and potentially less expensive alternative to a full actuarial valuation;
  • adjusts the requirement that a defined benefit OPEB plan obtain an actuarial valuation, in light of the change allowing more qualifying employers to use the alternative measurement method; and
  • clarifies that the same frequency and timing of determining OPEB measures are required for both agent multiple-employer plans and their participating employers.

Bankruptcy Protection

Statement 58 provides guidance for governments that have filed for bankruptcy protection under Chapter 9 of the United States Bankruptcy Code. It establishes requirements for recognizing and measuring the effects of the bankruptcy process on assets and liabilities, and for classifying changes in those items and related costs.

“The stress that the current economic environment is putting on state and local government resources and the lack of existing financial reporting guidance made it necessary for the GASB to address the financial reporting issues associated with qualified local governments that file for bankruptcy protection under Chapter 9,” said GASB Chairman Robert Attmore, in the announcement.

The provisions of Statement 57 related to the use and reporting of the alternative measurement method are effective immediately. The provisions related to the frequency and timing of measurements are effective for actuarial valuations first used to report funded status information in OPEB plan financial statements for periods beginning after June 15, 2011. Statement 58 is effective for periods beginning after June 15, 2009.

More information about ordering copies of the new GASB documents is here