Association of Local Government Auditors

The Governmental Accounting Standards Board (GASB) is evaluating 645 comment letters, testimony from 3 public hearings and 3 user forums, and results of 18 field tests responding to the exposure drafts of proposed amendments of GASB Statements 25 and 27 on public pension accounting.  The Board plans to re-deliberate issues - including measurement, timing, cost-sharing, special funding situations, effective date and transition - in its upcoming meetings through spring 2012.  You can view comment letters, including ALGA's response prepared by the Professional Issues Committee, on GASB's website at www.gasb.org.  (ALGA's response is Letter of Comment No. 82 on Accounting and Financial Reporting for Pensions).  GASB is deferring its exposure draft on proposed amendments to Other Postemployment Benefit (OPEB) Accounting and Financial Reporting until December 2012.

GASB also received 37 comment letters and heard testimony at three public hearings in response to its preliminary views document, Recognition of Elements of Financial Statements and Measurement Approaches.  The Board plans to review outreach efforts at its December meeting, particularly targeting users and preparers of financial statements and reports.  The preliminary views and alternative view articulate the results of the Board's early deliberations on conceptual criteria for deciding when information should be reported in state and local governmental financial statements and how the reported amount should be measured.  While concept statements don't promulgate rules, they can have far-reaching effects because, once adopted, they form the foundation for Board deliberations in future standards setting.  I encourage you to look at the preliminary views and alternative view if you didn't have a chance when it was first released.  GASB expects to release an exposure draft in May 2012.

Three other major projects on GASB's technical agenda are expected to result in preliminary views and/or exposure drafts by mid-2012:

• Economic Condition Reporting: Financial Projections. This project will consider whether guidance or guidelines should be provided for additional information about economic condition as part of general purpose external financial reporting. The Board has reached tentative agreement (subject to due process) that all governmental entities should be required to report measures of economic condition, including projections of major inflows and outflows on a cash basis, projections of major financial obligations on an accrual basis, and projections of annual debt service payments, for a minimum of five years beyond the reporting period. GASB expects to release a preliminary views document in December 2011.
• Government Combinations. This project will consider the financial reporting requirements for government combinations that are accomplished through annexation, consolidation, acquisition, or other means. The Board has reached tentative agreement (subject to due process) on the types of combination arrangements without the presence of financial consideration that are in the project's scope and how to present initial reporting periods for combined governments based on a carryover method for measuring assets and liabilities. GASB expects to release an exposure draft in February 2012.
• Financial Guarantees. This project will consider whether additional guidance is needed regarding recognition and disclosure of financial guarantees - primarily associated with commitments to assume debt issued by other entities - made and received by state and local governments. The Board has reached tentative agreement (subject to due process) on the definition of a financial guarantee, and that the project is focusing on guarantees provided and received through nonexchange transactions. The Board also tentatively agreed that the project will consider discretely presented and blended component units as separate entities. GASB expects to release an exposure draft in June 2012.

More detailed information about these projects is available at GASB's website. As always, I welcome your thoughts on any of the upcoming topics. Feel free to send me an email: anoble@atlantaga.gov