GASB RESOLVES TRANSITION ISSUE IN PENSION
STANDARDS
Norwalk, CT, November 25, 2013—The
Governmental Accounting Standards Board (GASB) today issued a Statement
regarding the transition provisions of GASB´s new pension standards for state
and local governments. GASB Statement No. 71, Pension
Transition for Contributions Made Subsequent to the Measurement Date—an
amendment of GASB Statement No. 68, eliminates a potential source of
understatement of restated beginning net position and expense in a government´s
first year of implementing GASB Statement No. 68, Accounting
and Financial Reporting for Pensions.
To correct this potential
understatement, Statement 71 requires a state or local government, when
transitioning to the new pension standards, to recognize a beginning deferred
outflow of resources for its pension contributions made during the time between
the measurement date of the beginning net pension liability and the beginning of
the initial fiscal year of implementation. This amount will be recognized
regardless of whether it is practical to determine the beginning amounts of all
other deferred outflows of resources and deferred inflows of resources related
to pensions.
The provisions are effective simultaneously with the
provisions of Statement 68, which is required to be applied in fiscal years
beginning after June 15, 2014.
Statements 68 and 71 are available on the
GASB website, http://www.gasb.org/cs/ContentServer?c=Page&pagename=GASB%2FPage%2FGASBSectionPage&cid=1176163528472.
About the Governmental Accounting Standards Board
The GASB is the independent, not-for-profit organization formed in 1984 that
establishes and improves financial accounting and reporting standards for state
and local governments. Its seven members are drawn from the Board´s diverse
constituency, including preparers and auditors of government financial
statements, users of those statements, and members of the academic community.
More information about the GASB can be found at its website, http://www.gasb.org/.