A news release from the Norwalk, Connecticut-based group said that Statement 47 provides that benefits for involuntary terminations should be accounted for in the period in which a government becomes obligated to provide benefits to terminated employees. That is not necessarily the same period in which the benefits are actually provided, the GASB announcement said.
The GASB release provides an exception to the general recognition requirements for termination payments that affect defined benefit post-employment benefits, such as pensions or retiree health care, according to the agency. Those termination obligations should be accounted for in the same manner as defined benefit pensions or other post-employment benefits, although any increase in an actuarial accrued liability associated with a termination benefit is required to be separately disclosed, the agency said.
The GASB Statement also elaborates on how to measure the cost of termination benefits and requires disclosure of information about termination benefit arrangements, including a description of the plan and the cost of the obligations.
In general, Statement 47 is effective for financial statements for periods beginning after June 15, 2005. However, for termination benefits that affect defined benefit post-employment benefits other than pensions, governments should implement Statement 47 simultaneously with Statement 45, Accounting and Financial Reporting by Employers for Post-Employment Benefits Other Than Pensions ( GASB Issues New Standards for Post-Retirement Benefits ).
More information is at http://www.gasb.org/st/summary/gstsm47.html .