State and local governments are required to follow accounting practices set forth by the Governmental Accounting Standards Board. GASB is recognized by governments, the accounting industry and capital markets as the official source of Generally Accepted Accounting Principles for government entities.
Periodically, GASB issues new standards intended to make government financial reporting more accountable. Typically, GASB issues exposure drafts leading up to the final approval of new standards to give users the opportunity to comment on the effects of the proposed standards.
Last week, GASB approved two new exposure drafts related to the financial reporting for other post-employmentbenefits known as OPEB. The concepts in the exposure drafts for OPEB are similar to the GASB 67 standards for pensions that were issued earlier this year.
One would apply to entities that provide an OPEB plan administered through a trust such as the South Carolina Other Retirement Benefits Employer Trust. Members of the trust will report the liability net of their accumulated earnings within the trust.
The other would apply to entities that do not participate in such a trust. They would report the total OPEB liability on their financial statements. The drafts will also include new methods to calculate the liability and annual OPEB expense.
GASB is expected to post these exposure drafts on its website in mid-June and will host public hearings in September. In the meantime, GASB has released a helpful Q&A resource.
If you find some of the language and terminology used by GASB confusing, you can find a series of "plain language" documents explaining many of the terms here.
For more information on SCORBET and OPEB contact the Association’s Heather Ricard or Hayes Holland.