According to a GASB press release, users, auditors, and preparers of state and local government financial reports have until Friday, August 28 to submit written comments on the EDs, which contain proposals intended to improve consistency in the measurement and financial reporting of other postemployment benefits (OPEB) such as retiree health insurance, and for the effects of municipal bankruptcy.
The proposed Statement on OPEB measurements addresses issues related to measurement of OPEB obligations by certain employers participating in agent multiple-employer OPEB plans, and would amend 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. (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, according to GASB).
Specifically, the proposal would:
- Enable certain agent employers to use the alternative measurement method, a less complex and potentially less expensive alternative to a full actuarial valuation
- Adjust 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
- Require the same frequency and timing of determining OPEB measures by both agent multiple-employer plans and their participating employers.
Chapter 9 Changes
The proposed Statement on Chapter 9 bankruptcies would provide guidance for governments that have petitioned for protection from creditors by filing for bankruptcy under Chapter 9 of the United States Bankruptcy Code. It would establish 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.
“With the current economic environment putting stress on state and local government resources, it became necessary for the GASB to address the financial reporting issues associated with local governments filing for bankruptcy protection under Chapter 9,” said Robert Attmore, chairman of the GASB.
“By issuing these proposals, the GASB is directly addressing issues raised by its constituents,” stated Mr. Attmore. “We encourage our constituents to review the proposals and provide their feedback.”
The EDs can be downloaded free of charge at www.gasb.org/exp .
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