The User's Perspective
Goings on at the GASB
Pension Project Update
At the mid-September close of the comment period, the GASB had received nearly 200 written responses to its Preliminary Views entitled Pension Accounting and Financial Reporting by Employers . That document, which was issued in June 2010, proposes how to improve the effectiveness of the existing accounting and financial reporting standards for state and local governments. The reexamination of the GASB’s pension standards is a part of the Board’s broader effort to examine the effectiveness of its standards of accounting and financial reporting for postemployment benefits—which also include other postemployment benefits (OPEB). (For more information about the Preliminary Views, please see the article in the June 2010 issue.)
In October, the GASB held three public hearings—in Dallas, New York, and San Francisco—on issues discussed in the Preliminary Views. Over the course of the hearings, the GASB received testimony from 29 individuals and organizations, including financial statement users, actuaries, consultants, financial statement preparer organizations, and public employee retirement systems. The participants in the public hearings expressed a wide range of opinions both supporting and opposing each of the Board’s preliminary views.
Since issuing the Preliminary Views, the Board has been deliberating over issues not fully covered in that document, including note disclosures and supporting schedules, and reporting by pension plans. The Board also is reviewing the input received in response to the Preliminary Views and reconsidering its proposals. For instance, the Board tentatively affirmed its decision to no longer base the accounting and financial reporting of pensions on a government’s approach to funding benefits. Similarly, the Board tentatively affirmed the proposal that governments report the unfunded portion of the pension obligation as a liability in their financial statements.
Looking ahead, the GASB expects to issue an Exposure Draft of new pension standards in June 2011.
User Guide Series Update Underway
The GASB’s user guide series, which introduces the financial reports of state and local governments to a broad, non-accountant audience, is currently being revised and updated for publication in 2011. The What You Should Know guides—originally published in 2000–2001—provide a comprehensive, easy-to-read introduction to the annual financial reports of local governments, school districts, and—all-new for 2011—business-type activities, such as utilities, hospitals, and colleges. The titles in the revised series will be:
- What You Should Know about Your Local Government’s Finances
- What You Should Know about Your School District’s Finances
- What You Should Know about Your Government’s Business-Type Activities
- An Analyst’s Guide to Government Financial Reports .
The 2011 editions of the first three guides will cover more note disclosures and supporting information and include the major new pronouncements issued since the publication of the original guides, including those on other postemployment benefits (OPEB), derivative instruments, and fund balance.
An Analysts Guide , which is aimed at experienced, regular users of governmental financial statements, will combine the current guide with What Else You Should Know about a Government’s Finances, the GASB’s guide to notes and supporting information, to create a comprehensive guide to the full financial report.
The 2011 editions of the guides are scheduled for publication mid-year. The original guides are available in the store section of the GASB website, https://www.gasb.org/store, by clicking on the User Guides item in the menu on the left hand side of the screen.
Michael Granof Joins the GASB
Michael H. Granof, PhD, CPA, the Ernst & Young Distinguished Centennial Professor of the McCombs School of Business at the University of Texas at Austin, was appointed by the Trustees of the FAF to a five-year term on the GASB, which began July 1. Dr. Granof succeeds William Holder, who concluded his second five-year term on the GASB in June.
Dr. Granof has been a member of the faculty of the McCombs School of Business since 1972. He was appointed in 1984 as the Ernst & Young Distinguished Centennial Professor. In addition, since 1999 Dr. Granof has also been a Professor of Public Affairs at the Lyndon B. Johnson School of Public Affairs at the University of Texas at Austin.
During his career, Dr. Granof has focused on government accounting and auditing issues and has written a number of textbooks and articles on these subjects. He was a former member of the National Council on Governmental Accounting (the GASB’s predecessor body) and also is a part-time member of the Federal Accounting Standards Advisory Board.
Marty Benison Named GASAC Chair
Massachusetts Comptroller Marty Benison has been appointed by the Trustees of the Financial Accounting Foundation (FAF) to a two-year term as chairman of the Governmental Accounting Standards Advisory Council (GASAC), beginning January 1, 2011. Benison, who currently represents the National Association of State Auditors, Comptrollers and Treasurers on the GASAC, will succeed Dan Ebersole, recently retired Georgia state treasurer, who served as chairman for three years.