what is gasb statement 75

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Gasb statement no. 75 – what basics do i need to know, by christopher w. heinfeld, cpa, audit partner.

Posted on August 8, 2018

Now, let’s discuss some of the related requirements; specifically, for plans that are administered through a trust that meets the specified criteria. As previously mentioned, GASB Statement No. 75 is very similar to that of GASB Statement No. 68, which was related to pensions. The requirements for the valuation of the total OPEB liability, as well as the measurement of the net OPEB liability, are very comparable. Additionally, the presentation of the related OPEB account balances (net OPEB liability, deferred outflows and inflows of resources, and OPEB expense) mirror those required by GASB Statement No. 68 for pensions. Lastly, the note disclosures and required supplementary information (RSI) requirements are equivalent to those of GASB Statement No. 68; see below for further details.

The note disclosure requirements vary based on the type of plan, but generally, comprise:

• a description of the plan including information about benefits and contributions
• information about the assumptions and other inputs used in the valuation
• information about the measurement of the liability including sensitivity analysis over not just the discount rate but also the healthcare cost trend rate used
• information about the plan’s basic financial statements or a reference to the report
• changes in the net OPEB liability (single/agent plans only), and
• the proportionate share of collective net OPEB liability (cost-sharing plans only)

If GASB Statement No. 68 was effective for your entity, then you will probably notice that these are the same general requirements, with the exception of additional information necessary for disclosure of any healthcare cost trend rates (if applicable) used in the valuation and measurement of the liability.

The RSI requirements vary based on the type of the plan, but generally, comprise a schedule of contributions, a schedule of changes in net OPEB liability and related ratios (single/agent plans only), and a schedule of proportionate share of the net OPEB liability (cost-sharing plans only). If GASB Statement No. 68 was effective for your entity, then you will probably notice that these are the same schedules required under that statement; however, be aware that GASB Statement No. 85 ( Omnibus ) made some adjustments to the use of Covered-Employee Payroll versus Covered Payroll.

Lastly, as this statement requires a significant amount of information to be disclosed, if your entity participates in an OPEB plan under the same organization as your pension plan, you may want to consider referencing both plans for identical disclosures rather than doubling up on disclosures and information.

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What is GASB Statement 75?

The Governmental Accounting Standards Board (GASB) Statement No. 75 addresses postemployment benefits other than pensions (other postemeployment benefits or OPEB), in the same way that GASB 68 addresses pension benefits. GASB 75 was issued In June 2015 to establish new accounting and financial reporting standards that require, for the first time, that the net liability for other postemployment benefits (OPEB) is reported in financial statements for employers with retirement plans across the country, including the Michigan Public School Employees Retirement System (MPSERS). It replaces the requirements of GASB Statements No. 45 and 57.

GASB 75 requires participants in a multi-employer cost sharing plan to:

• Record a proportionate share of the net OPEB liability on their balance sheet.
• Record a proportionate share of OPEB expense as defined by GASB on their income statement.
• Include additional note disclosures and required supplemental information.

When did GASB 75 go into effect?

GASB 75 is effective for fiscal years beginning after June 15, 2017.

What is net OPEB liability?

The net OPEB liability is the amount of the total OPEB benefit that is not funded by investment assets. This net unfunded OPEB benefit will be a line item in your Statement of Net Position. As a MPSERS participating employer you are required to record your proportionate share of the net OPEB liability. This liability is not new; it exists as a normal part of OPEB funding, where a benefit system can be overfunded or underfunded depending on the value of the investments.

How is the net OPEB liability calculated?

This net liability is calculated as the plan’s total OPEB liability minus the market value of the plan’s assets. The Office of Retirement Services (ORS) will annually determine each reporting unit’s proportionate share of the liability and expense by measuring their proportionate share of the prior year’s net liability.

What is OPEB expense?

The OPEB expense represents the annual cost of the retiree healthcare benefit for members with the premium subsidy. Each MPSERS employer is required by GASB to record its proportionate share of the OPEB expense. GASB 75 requires that OPEB expense be reported using a method that presents service (normal) cost and other basic expenses (for example the cost of administering the healthcare benefit), as well as amounts recognized each year for deferred inflows of resources (which reduce the OPEB expense) and deferred outflows of resources (which increase the OPEB expense). Examples of deferred inflows and outflows include differences between projected and actual investment returns and differences between expected and actual actuarial experience. Deferred inflows and outflows are recognized over a period of years specified by GASB 75, depending on a variety of factors. GASB 75 also requires MPSERS employers to record their proportionate share of the OPEB expense.

Are UAAL Rate Stabilization payments included as statutorily required OPEB contributions?

No. Beginning with the fiscal year ending Sept. 30, 2018, 100% of the UAAL rate stabilization payment is included in the statutorily required  pension  contribution. The payments are no longer part of the required  OPEB  contribution.

How does GASB 75 affect my reporting unit’s retirement costs?

As with GASB 68, GASB 75 is for financial reporting purposes only and does not change funding of retirement costs for reporting units. Additionally, the liability and the associated expenses will be reported only on your government-wide financial statements (Statement of Net Position and Statement of Activities) and as any full accrual funds that also include payroll costs, and not your modified accrual fund level statements.  Note: Public Act 92 of 2017 changed future pension funding methodologies. However, those changes are unrelated to the adoption of GASB 75.

Does my reporting unit need this information for budgeting purposes?

For public schools and other organizations using the modified accrual basis of accounting, your reporting unit does not need this information for budgeting purposes since the method used to fund the Retiree Healthcare Fund has not changed. Community colleges, universities and other organizations that use full accrual basis accounting will need to budget for the OPEB expense but not the contributions. Ultimately, these financial reporting changes will only affect your reporting unit’s government-wide, full accrual financial statements starting with your fiscal year 2018.

Does GASB 75 apply to both the premium subsidy benefit (3% HCC) and the Personal Healthcare Fund (PHF) benefit?

GASB 75 applies only to contributions for the premium subsidy benefit (3% HCC), for which contributions are made to the Retiree Healthcare Fund. The Personal Healthcare Fund (PHF) benefit is a Defined Contribution benefit and is not affected by GASB 75.

How can I get more information on how to record this liability?

Discuss this issue with your CPA and professional auditor. The full GASB Statement No. 75 and an accompanying Implementation Guide are available at GASB.org under Standards & Guidance. Statements are also known as “Pronouncements.”

Last updated: July 7, 2020

Overview of GASB Statements 73, 74, and 75

About the Author(s)

Daniel wade.

Seattle Tel: 1 206 504 5695

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Successful implementation of new accounting rules for public postretirement benefit pension plans will require an understanding of a variety of technical concepts regarding various newly required calculations. We take a look at Government Accounting Standards Board (GASB) Statements 73, 74, and 75.

Overview of GASB Statements 73, 74, and 75

About the Author(s)

Daniel wade.

Seattle Tel: 1 206 504 5695

We’re here to help

Ask the tough questions. We’re ready for them.

Share this page

Successful implementation of new accounting rules for public postretirement benefit pension plans will require an understanding of a variety of technical concepts regarding various newly required calculations. We take a look at Government Accounting Standards Board (GASB) Statements 73, 74, and 75.

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GASB 74/75 frequently asked questions

General information.

The Governmental Accounting Standards Board (GASB) is an independent, non-profit, non-governmental regulatory body charged with setting authoritative standards of accounting and financial reporting for state and local governments, including school employers. GASB accounting standards are the primary source of Generally Accepted Accounting Principles (GAAP) for state and local governments, including CalSTRS and school employers.

GASB Statement No. 74,  Financial Reporting for Postemployment Benefit Plans Other Than Pension Plans , establishes financial reporting standards for state and local governmental other postemployment benefit (OPEB) plans – defined benefit OPEB plans and defined contribution OPEB plans that are administered through trusts or equivalent arrangements.

GASB 74 replaced GASB 43,  Financial Reporting for Post-Employment Benefit Plans Other Than Pension Plans, as amended , and GASB 57,  OPEB Measurements by Agent Employers and Agent Multiple- Employer Plan. It became effective for financial statements for fiscal years beginning after June 15, 2016. CalSTRS first implemented this standard in our Annual Comprehensive Financial Report for the fiscal year ended June 30, 2018.

GASB 74 is applicable to CalSTRS which administers an OPEB plan called the Medicare Premium Payment (MPP) Program. The standard requires the establishment of a net OPEB liability to be measured as the total OPEB liability, less the amount of the OPEB plan’s fiduciary net position. The statement also requires additional disclosure and supplementary information to be included in the OPEB plan’s financial statements.

GASB 75,  Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions,  established standards of accounting and financial reporting for defined benefit OPEB and defined contribution OPEB that are provided to the employees of state and local governmental employers through OPEB plans that are administered through trusts or equivalent arrangements.

GASB 75 replaced GASB 45,  Accounting and Financial Reporting by Employers for Postemployment Benefits Other Than Pensions. It applies to the GAAP-based financial statements of employers and became effective for the fiscal years beginning after June 15, 2017.

This standard is applicable to the employers who participate in the MPP Program and requires employers to report a liability equal to their proportionate share of the collective OPEB liability for all entities participating in CalSTRS’ cost-sharing plan on the face of the financials. In addition, employers are required to present more extensive note disclosures and required supplementary information about their net OPEB liability.

The Medicare Premium Payment Program is a cost-sharing multiple-employer other postemployment benefit plan established pursuant to Chapter 1032, Statutes of 2000 (SB 1435). CalSTRS administers the MPP Program through the Teachers’ Health Benefits Fund.

The MPP Program pays Medicare Part A premiums and Medicare Parts A and B late enrollment surcharges for eligible members of the Defined Benefit (DB) Program who were retired or began receiving a disability allowance prior to July 1, 2012, and were not eligible for premium free Medicare Part A.

The payments are made directly to the Centers for Medicare and Medicaid Services on a monthly basis.

The CalSTRS MPP Program is available to eligible members of the DB Program who are 65 years or older. These members must be enrolled in Medicare Part A or B, and must be ineligible to receive premium free Medicare A coverage on their own.

Members who retired or were receiving a disability allowance prior to January 1, 2001, are eligible to have CalSTRS pay their Medicare Part A premium and Part B surcharges. Members who retired on or after January 1, 2001, but before July 1, 2012, must meet all of the criteria above and must have retired from an employer who held a Medicare Division.

If the Medicare Division was held before January 1, 2001, the member is eligible. If the Division was held on or after January 1, 2001, and the member was less than 58 years old at the time of the Division, they must have elected to receive Medicare coverage.

Members who were receiving a disability allowance, and were actively employed at the time of the Division, must meet all of the same criteria as above. Members who were receiving a disability allowance, but were not actively employed are also eligible, as long as the Division was completed prior to the time the member reached normal retirement age.

A Medicare Division is an election where a member makes an irrevocable choice whether or not to be covered by Medicare through the payment of Medicare payroll tax. These elections were overseen and conducted by the California Public Employees Retirement System.

DB Program members who were hired prior to April 1, 1986, were not required to pay Medicare payroll tax. All members hired after April 1, 1986, were required to pay the Medicare payroll tax, as such pre-1986 hires had to opt in or out.

Per Education Code § 41010, all Local Educational Agencies are subject to the  California School Accounting Manual , as approved by the State Board of Education and furnished by the Superintendent of Public Instruction.

The  California School Accounting Manual   requires most school employers to prepare their financial statements in accordance with Generally Accepted Accounting Principles. GASB standards, including GASB 75, are the primary source of GAAP for most school employers. Conformity with GAAP allows comparability among school employers. Being out of compliance with GAAP may impact the audit opinion of the school employer’s financial statements.

Any participating employer that is a member of one of the state’s defined benefit plans must implement GASB 75, including local governments, public authorities, and local school systems. Not for profit charter schools that use the full-accrual basis of accounting may need to report these amounts in their financial statements.

GASB 74 and GASB 75 do not establish requirements for funding. The statements aim to separate funding and financial reporting and provide users with information about the effects of OPEB-related transactions and other events on the face of the basic financial statements.

GASB 75 takes an accounting-based approach to assist users in assessing accountability and relationship between government’s inflows of resources and its total cost of providing government services each period.

No. The MPP Program is funded on a pay-as-you go basis from a portion of monthly employer contributions to the DB Program. In accordance with California Education Code Section 25930, contributions that would otherwise be credited to the DB Program each month are instead credited to the MPP Program to fund monthly program and administrative costs. Total redirections to the MPP Program are monitored to ensure that total incurred costs do not exceed the amount initially identified as the cost of the program.

Statutory contribution rates for participating State Teachers’ Retirement Plan employers are determined by the legislature, which has given the Teachers’ Retirement Board limited authority to adjust the supplemental employer contribution rate from July 1, 2021, through June 2046 in order to eliminate the remaining unfunded actuarial obligation related to service credited to members prior to July 1, 2014.

No. The NOL is an accrual accounting measurement calculated in conformity with GASB 74 and GASB 75. The unfunded liability is a funding measure calculated according to Actuarial Standards of Practice.

Net Other Postemployment Benefit Liability

The net OPEB liability of the MPP Program is presented in multiple places within the Financial section of the  Annual Comprehensive Financial Report .

• Note 4 - Net OPEB liability of employers
• Schedule V - Schedule of changes in net OPEB liability of employers
• Schedule VI - Schedule of net OPEB liability of employers

Information on the discount rate for the MPP Program may be found in Note 4 of the notes to the basic financial statements within the Financial Section of the Annual Comprehensive Financial Report .

The MPP Program is funded on a pay-as-you-go basis, with contributions generally being made at the same time and in the same amount as benefit payments. As such, the fiduciary net position will not be sufficient to make the projected future benefit payments.

Since the MPP Program is essentially unfunded from a financial reporting perspective, in accordance with GASB 74, the rate used to discount the total OPEB liability represents the yield or index rate for 20-year, tax-exempt general obligation municipal bonds with an average rating of AA/Aa or higher.

No, the NOL is an accrued liability, similar to accrued vacation or other employment benefits that have been earned by employees but are payable sometime in the future. The program is funded on a pay-as-you-go basis with contributions generally being made at the same time and in the same amount as benefit payments and expenses coming due. Additionally, each employer's individual liability represents a proportionate share of the collective OPEB liability as of a given fiscal year end for all entities participating in the MPP Program. Therefore, school employers have no mechanism for directly reducing their liability.

The NOL for individual employers can only be reduced when the collective NOL of the MPP Program decreases.

Proportionate share calculation

Due to the unique approach by which the MPP Program is funded, each employer may have different accounting policies for determining their proportionate share of the NOL, OPEB expense, and deferred inflows and outflows. CalSTRS prepares the schedule of proportionate share of contributions for employers and nonemployer contributing entity (Schedule A) in CalSTRS’ Other Pension Information (OPI) report, to assist employers with meeting the requirements of GASB 68. Employers can also use this report to calculate a proportionate share factor that can be applied to the NOL of the MPP Program for GASB 75 purposes.

Schedule A shows each employer’s contributions (to the nearest dollar) as calculated by CalSTRS along with any additional allocated contributions (note: no additional allocated contributions were applicable to the June 30, 2023, Schedule A). It also shows corresponding contributions for each individual employer as a percentage of total employer contributions (which includes employer contributions made by the State of California as a nonemployer contributing entity to the State Teachers’ Retirement Plan) for the fiscal year. The percentage is displayed to three decimal places.

As the State of California does not make contributions to the MPP Program, those State of California contributions shown in Schedule A should be excluded from total employer contributions when considering the proportionate share factor for the net OPEB liability. As such, employers will need to recalculate their proportionate share factor using information presented in Schedule A. To do this, employers would divide their total CalSTRS calculated and allocated contributions by Total CalSTRS-calculated employer contributions at the bottom of Schedule A.

The following is a screenshot of a fictional Schedule A for the fiscal year ended June 30, 20X1 to be used for example purposes:

Based on the data above, Unified School District #1 would use this Schedule A to recalculate its proportionate share factor for the MPP Program by excluding the nonemployer contributing entity (State of California) as follows:

The following is an example of calculating Unified School District #1's proportionate share of the net OPEB liability, which can be found within Note 4 (Net OPEB liability of employers) of the  Annual Comprehensive Financial Report ). This calculation uses a fictional net OPEB liability of employers as of June 30, 20X1, along with the recalculated proportionate share factor (taken from the previous question) for example purposes.

Employers may use this process each year to calculate their current proportionate share factor, and NOL.

No, school employers are not required by the new accounting standards to use the proportionate share calculated by CalSTRS. Each employer’s method of determining their proportionate share of the net OPEB liability, deferred inflows and outflows of resources, and OPEB expense of the MPP Program is an accounting policy decision that each employer should consult on with their auditors.

CalSTRS calculates current year contributions due based on current year creditable earnings for active members as reported by employers. Since cash remittances of contributions due are received from employers prior to reports of creditable earnings by member, CalSTRS accrues employer contributions due monthly based on estimates. In addition, CalSTRS recognizes contributions and adjustments to contributions reported in the current year for service performed in a prior year as they are reported by employers.

The specific types of contributions included are:

• Monthly contributions, including accruals, to the Defined Benefit Program for the CalSTRS 2% at 60 under Education Code §§ 22950 and 22951.
• Monthly contributions, including accruals, to the Defined Benefit Program for the CalSTRS 2% at 62 formula under Government Code § 7522.30.
• Excess service contributions, including accruals, to the Defined Benefit Supplement Program under Education Code § 22905(b)(1).
• Employer contributions to the Cash Balance Benefit Program under Education Code §§ 26503 and 26503.5.
• Employer contributions to the Defined Benefit Supplement Program for limited-term compensation increases under Education Code § 22905(b)(3).
• Employer contributions for members who participate in the reduced workload program under Education Code § 22713(e).
• Employer contributions for members which serve as an elected officer in an employee organization under Education Code § 22711(a)(3).
• Employer contributions redirected to the Medicare Premium Payment Program under Education Code § 22950(c).
• Employer contributions redirected to the Teachers’ Replacement Benefits Program under Education Code § 24260(d).

CalSTRS excluded the following contributions from Schedule A because they are separately financed obligations paid in installments, or do not reflect the employers’ long-term contribution effort:

• Employer contributions to the Supplemental Benefit Maintenance Account and the Defined Benefit Program for retirement incentives (golden handshake) under Education Code §§ 22714 and 22715.
• Employer contributions for the purchase of one-year final compensation under Education Code § 22135(f).
• Employer contributions for service credit awarded for excess unused sick leave under Education Code § 22718.
• Employer contributions for additional service credit under Education Code § 22801(d).
• Employer contributions for military service credit under Education Code § 22852.

To help employers understand the amount presented for their school district in Schedule A - Schedule of proportionate share of contributions for employers and nonemployer contributing entity, CalSTRS has provided a reconciliation of employer contributions report through the Contributions Account Portal.

To get to the report, school employers must log into the  Secure Employer Website  and then follow this path:

Contribution Account Portal ➤ Financial Reporting ➤ Reconciliation of Employer Contributions

There is a job aid on the Help page on the Contributions Account Portal that explains in detail how to run the report. A link to the job aid is also posted on CalSTRS.com.

The reconciliation of employer contributions report reconciles contributions presented in Schedule A to contribution reports submitted by employers. However, it does not include information on contributions by the state on behalf of employers.

Deferred inflows/outflows

A traditional balance sheet consists of assets and liabilities; however, GASB felt these categories were insufficient to describe certain transactions. As such, GASB created two new categories known as deferred inflows of resources and deferred outflows of resources.

GASB first introduced the idea of deferred inflows and outflows of resources in Concepts Statement No. 4, which defines deferred outflows of resources as a consumption of net assets that is applicable to a future reporting period. Concepts Statement No. 4 defines deferred inflows of resources as an acquisition of net assets that is applicable to a future reporting period. Deferred outflows of resources balances have a positive effect on net position, similar to assets, and deferred inflows of resources balances have a negative effect on net position, similar to liabilities.

Typically, when assets and liabilities are recorded, they have a corresponding revenue or expense that is recognized in the current period. Conversely, when deferred items are recorded, the expense or revenue is recognized in future periods (like a prepaid expense or deferred revenue).

GASB 75 classifies the following items as deferred inflows and outflows:

• Differences between expected and actual experience. (1)
• Changes in assumptions.
• Net difference between projected and actual earnings on plan investments.
• Changes in proportionate share.
• Contributions subsequent to the measurement date.
• Difference between an employer’s proportionate share and actual contributions.

(1) Also referred to as actuarial gains and losses.

The amortization period for the difference between projected and actual earnings on plan investments is five years. The amortization period for all other deferred items is the average remaining service life of plan members.

Except for the difference between projected and actual earnings on plan investments, deferred inflows and outflows must be separately recognized and amortized in the financial statements. They cannot be netted together.

For example, if there is a deferred outflow of resources of $200 and a deferred inflow of resources of $500 related to changes in assumptions, they cannot be combined and shown on the balance sheet as a $300 net deferred inflow of resources for changes in assumptions. However, deferred inflows and outflows for the difference between projected and actual earnings on plan investments is an exception and can be netted together.

As the MPP Program is a retiree only OPEB plan with no active members, the average remaining service life is one year.

CalSTRS will maintain schedules for deferred inflows of resources and deferred outflows of resources specific to the OPEB plan at the collective level. However, employers will need to maintain schedules for deferrals arising from changes in the employer’s proportionate share and contributions subsequent to the measurement date.

The reasoning behind this approach is that CalSTRS is not calculating deferrals specific to individual school employers.

Employers who participate in the MPP Program are required by GASB 75 to disclose their district’s proportionate share of the MPP Program’s deferred inflows and outflows of resources and OPEB expense. Deferred outflows and inflows of resources for the MPP Program can be found within the GASB 74/75 Financial Reporting actuarial valuation reports .

Yes, changes resulting from GASB 75 requirements apply to the government-wide financial statements, enterprise and agency funds financial statements which are prepared on full accrual basis of accounting.

The measurement date is the date the net OPEB liability is measured for purposes of a school employer’s financial reporting and must be consistently applied from period to period. GASB 75 requires the total OPEB liability be determined by (a) an actuarial valuation as of the measurement date or (b) the use of update procedures to roll forward to the measurement date amounts from an actuarial valuation as of a date no more than 30 months and 1 day earlier than the employer’s most recent fiscal year end.

As the collective NOL is reported by CalSTRS, the measurement date must fall on June 30, which is CalSTRS fiscal year end.(2) However, school employers can choose to use June 30 of the current fiscal year or June 30 of the prior fiscal year as the measurement date.

For example, for their financial statements for the fiscal year ending June 30, 2023, school employers can use June 30, 2022, or June 30, 2023, for their measurement date.

When selecting the measurement date, school employers should consider when CalSTRS financial statements will be available in relation to when the employer plans to complete their own financial statements.

Employers who choose to use a measurement date of June 30 from the current fiscal year should consider that CalSTRS’ June 30 financial statements are generally not available until November of the same calendar year following their presentation to the Teacher’s Retirement Board. For example, if an employer is reporting for June 30, 2023, and uses a measurement date of June 30, 2023, they would need to use information from CalSTRS’ June 30, 2023, financial statements, which would not be available until November 2023.

(2) June 30 is also the fiscal year end for school employers, per the Department of Education’s California School Accounting Manual .

CalSTRS' current fiscal year financial statements are contained within the  Annual Comprehensive Financial Report , which is available on CalSTRS.com.

CalSTRS’ audited June 30 financial statements are posted to CalSTRS.com following their presentation to the Teachers’ Retirement Board in November. The financial statements are contained within the Annual Comprehensive Financial Report  which is made available online in late December once it’s completed.

GASB 75, paragraphs 89-98, describe the required note disclosures and the required supplementary information for cost-sharing employers. Unfortunately, CalSTRS cannot assist employers in preparing this information as it falls outside the scope of CalSTRS fiduciary duty to our members.

The MPP Program is a cost-sharing multiple-employer other postemployment benefit plan established pursuant to Chapter 1032, Statutes 2000 (SB 1435).

As a cost-sharing multiple-employer OPEB plan, OPEB obligations to the employees of more than one employer are pooled and OPEB plan assets can be used to pay the benefits of the employees of any employer that provides OPEB through the OPEB plan. In accordance with GASB 75, cost-sharing employers are required to recognize a liability for their proportionate share of the net OPEB liability.

The  California School Accounting Manual  requires most school employers to prepare their financial statements in accordance with Generally Accepted Accounting Principles. GASB standards, including GASB 75, are the primary source of GAAP for most school employers.

Being out of compliance with GAAP may impact the audit opinion of the school employer’s financial statements. Employers are encouraged to consult with their independent auditors about these GASB standards and the policies needed to implement the changes outlined above.

Additional information

CalSTRS identifies links to  additional information  that may be helpful to employers on CalSTRS.com.

CalSTRS cannot give specific accounting advice or guidance to employers, but for questions about GASB 74 and GASB 75, contact CalSTRS’ Financial Reporting team at [email protected] .

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What is the Difference Between GASB 74 and GASB 75?

August 15, 2017 | Parker Elmore

• Governmental Accounting Standards Board Statement No. 74 (GASB 74), Financial Reporting for Postemployment Benefit Plans Other Than Pension Plans, establishes financial reporting standards for plans that administer OPEB (Other Postemployment Benefits) on behalf of governments.
• Governmental Accounting Standards Board Statement No. 75 (GASB 75), Accounting and Financial Reporting for Postemployment Benefits Other than Pensions, establishes accounting and financial reporting standards for government employers for OPEB (Other Postemployment Benefits).

If you are a governmental entity that sponsors an Other Postemployement Benefits Plan (OPEB plan), you are subject to Governmental Accounting Standards Board Statement No. 74 (GASB 74) and Governmental Accounting Standards Board Statement No. 75 (GASB 75) to issue GAAP (Generally Accepted Accounting Principals) compliant financial statements.

What is an OPEB Plan?

OPEB or Other Than Postemployment Benefit plans are benefits other than pensions that are provided to former and retired employees. These benefits are primarily healthcare benefits, but will often include dental insurance, life insurance, and other supplemental benefits.

GASB 74 – Financial Reporting for Postemployment Benefit Plans other than Pension Plans

This statement relates to the financial reporting of the OPEB plan itself rather than the governmental entity, employer, or plan sponsor.

What are the key issues to consider under GASB 74?

• Contributions to the Trust and earnings thereon must be irrevocable.
• OPEB Trust assets may only be utilized to provide OPEB benefits in accordance with plan terms (e.g., may not revert to the plan sponsors until all obligations are satisfied).
• OPEB Trust assets must be legally protected from the creditors of employers, contributing entities, and plan members.
• Higher discount rates yield lower disclosed liabilities & vice versa.
• GASB 74 does NOT allow for asset smoothing – it requires the use of the market value or actual value of plan assets.
• The Measurement Date under GASB 74 is the Reporting Date or fiscal year-end so it is important that the plan sponsor, actuaries, and auditors work together to ensure that reporting deadlines can be met.
• Disclosure is done via Required Supplementary Information (“RSI”) – likely six to eight pages.

GASB 75 – Accounting and Financial Reporting for Postemployment Benefits Other than Pensions

This statement relates to the financial reporting for OPEB that is provided to the employees of state and local governmental employers.

What are the key issues to consider under GASB 75?

• Absent an OPEB Trust, the discount rate will be the 20-year high-grade municipal bond index. This will create a wider range of volatility for discount rates from period to period. In turn, yielding potentially large swings in liability from period to period.
• While asset smoothing is not explicitly allowed, the use of deferred inflows & outflows of resources allows any asset returns above or below the expected return for the period to be amortized over a period not to exceed five (5) years.
• The use of an earlier Measurement Date can alleviate year-end stress by allowing the GASB 75 disclosures to be done well in advance.
• In the event of an earlier Measurement Date, this will require the disclosure of a deferred outflow of resources to reflect employer contributions paid after the Measurement Date and before the Reporting Date.

We’re here to help.

You may still be adjusting your OPEB plans to the new accounting standards under GASB 74 and 75. We can help make your job easier. Share your recent valuation with us and we’ll send you a quote.

About The Author As President and CEO of Odyssey Advisors, Parker Elmore is dedicated to quality service, expertise, and efficiency. With over 25 years of industry experience, Parker and the Odyssey team develop and implement solutions to the complex financial issues faced by... Learn More

GASB plans new standards and guidance for accountants

The Governmental Accounting Standards Board is getting ready to roll out new rules and proposals for state and local governments, including improvements to the financial reporting model, classification of capital assets, and measurement of infrastructure assets.

GASB chair Joel Black visited the Accounting Today offices and discussed some of those upcoming changes. GASB recently approved Statement 103, Financial Reporting Model Improvements, providing targeted improvements to the blueprint for government financial reports, and plans to release it next week. 

"It's been in the works for probably close to 10 years and was our reexamination of Statement 34, which was the largest change in government financial reporting that probably ever has been," said Black. "It created government-wide statements, MD&A and major funds, and put infrastructure on the Statement of Net Position for the first time. In researching that, we found that by and large it was working really well, but we had areas for targeted improvement."

The biggest one involved looking at the measurement focus and basis of accounting for governmental funds, such as general funds and special revenue funds, where the rules can be vague. "They don't always necessarily make sense together, but you have to know how to report them under GAAP in the governmental funds," said Black. "We were hoping, as part of this project, to create a consistent, underlying way to account for the transactions that run through governmental funds, to make it easier for people to understand how to account for things within the governmental funds, as opposed to just having to know this long set of rules."

Statement 103 project , GASB went through three rounds of due process and then took a step back to evaluate it. The board ultimately decided to scale back the number of changes in the existing rules.

"We really had two options," said Black. "One was this conceptually consistent way to account for governmental funds that was very close to cash basis. Nobody really liked that as a solution because the information that comes out of that isn't as good as the information that comes out of the current reporting model. And so we were left with the second option. That started out as a conceptually consistent way to account for governmental funds, but as we tried to get the information that comes out of it to be more what we wanted it to be, which really was pretty similar to what the current model produces, we kept having to add a number of exceptions and complexities. And when the board stepped back and said, 'Are we just changing one set of rules for another set of rules? Did we meet our objective?' the board decided we didn't, so we took it out."

The major changes in governmental fund accounting that GASB had talked about were ultimately taken out of the project. Instead of a far-reaching overhaul, GASB decided to make targeted improvements but significant improvements. One of the most prominent is in the management discussion and analysis section.

"We didn't really change what's required to be in there, but better describe what's required to be in there, what we always hoped would be in there, to get better results from the preparation of MD&A, in particular, to get more analysis in the management discussion and analysis," said Black. "We specifically say it's not just what changed and how much did it change, but rather why did it change? We've added more language there. There's a section of MD&A about currently known facts and decisions that might affect the government's financial condition that we weren't getting much out of, so there's much more description of that section of MD&A."

The new standard may help make government financial statements more accessible to regular citizens. They may be able to spot examples of overspending on expensive, wasteful projects.

"I think it will improve consistency and improve in particular the MD&A, the section of the report that we specifically within this project acknowledge is written more for the less sophisticated reader," said Black. "That's how we direct management to prepare the MD&A, so that it's hopefully a little less technical. If you have more analysis and description of why, then taxpayers should be able to see major activities and financial condition statements and analysis of the government in an improved MD&A."

The other big change pertains to proprietary business types of funds on the income statement — their statement of revenues, expenses, changes in net position — where GASB better defined what should be classified as operating and nonoperating revenues and expenses. 

"That statement added a new category of nonoperating revenues and expenses called subsidies within that statement, and a new subtotal that would take operating income or loss plus noncapital subsidies to get another indicator of how that fund is operating," said Black. "We think there will be more consistency from government to government about what's in operating versus what's in nonoperating with the change. A couple of other tweaks are in Statement 103, but those are the two big ones."

GASB wanted to avoid upending the rules for governmental fund accounting completely, especially as it nears its 40th anniversary in mid-June. "We are excited to commemorate the work that's gone into 40 years of standard-setting from past board members and team members and all the stakeholders contributing to a full set of GAAP that we think works really well," said Black. "It took 40 years to create, but we're also taking the time to look at and think about how it's setting us up for the future, and making sure that we are prepared for the next 40 years of setting standards and dealing with maintaining GAAP and advancing it for what the future might look like."

Financial Data Transparency Act

GASB is looking ahead and anticipating possible changes required by the Financial Data Transparency Act, which was signed into law at the end of 2022 as part of a larger national defense authorization package. The FDTA will require state and local governments to file some level of electronic financial reports and is in the rule-making process at the SEC. GASB's role hasn't yet been determined, but the GASB staff is in the process of developing a government financial reporting taxonomy that could be used by state and local governments on a voluntary basis and, potentially, by the SEC in determining how the FDTA should be implemented. GASB is working on developing a taxonomy, similar to the one that its sister standard-setter, the Financial Accounting Standards Board, has for organizing the standards around GAAP financial reporting and tagging the data.

"This is part of setting ourselves up for the next 40-plus years of GAAP, being sure we're paying attention to how technology is changing financial statement preparation, auditing and the consumption of that financial information by users of financial statements," said Black. "Right now, what we're mainly working on is a financial statement taxonomy. That would be really about that consumption piece. What we're creating right now would be, for lack of a better term, something like a data standard. It won't be a GASB statement, but some kind of data standard that from our perspective would be voluntary, but it would be a standard that talks about this future of financial reporting, that not only are the numbers on a page, but they're structured in a way that when a machine reads it, it not only sees the number, but it understands what the number is, understands what year it relates to, how it was prepared, what it means, what it is."

mandated by the SEC, but it could be open to other types of technology as well. 

"We will be developing a taxonomy that an XBRL language tool could use, but it could also be other types of tech tools like a scraping tool that might use some kind of programmed or artificial intelligence to use the rule and apply it the same way without necessarily having to be an expert language kind of tool," said Black. "Our idea is to be more technology solution agnostic in development in this rule."

developed by an industry consortium known as XBRL US.

Classification of capital assets

Another major project is nearing completion, when GASB plans to issue final guidance on the disclosure and classification of certain capital assets to ensure they're classified in the way that provides the most relevant information, including disclosed capital assets held for sale. The board hasn't voted yet, but the schedule calls for GASB to vote in July on it becoming a new standard. If approved, it would be called Statement 104. 

"This one is providing more granular detail in the note disclosure related to capital assets for things like capital assets held for sale for some of these new types of right-to-use assets that were created by recent standards like the lease standard, [GASB Statement No.] 87, and the public-private partnership standard, 94, and the subscription-based IT arrangements, 96," said Black. "All of those created potentially right-to-use assets that really are treated like capital assets in our literature. But users think about those kinds of right-to-use assets, and assets held for sale, maybe differently than more traditional owned tangible capital assets. While the base of the financials won't change as a result of this, the note disclosure will provide more detail to break out those types of capital assets from the more traditional ones."

That could help watchdog groups and investors understand better what the assets of the government constitute, whether they're owned or just leased for some period of time, similar to the way FASB's leases standard helps investors make better sense of corporate balance sheets.

"These are those assets that are right-to-use assets created under that standard would be broken out separately in the note disclosure, whereas now they're just kind of built into capital assets, unless the government chose to break them out in the note disclosure, which they could have done," said Black. "But if they didn't, this would require them to."

Infrastructure assets

GASB is also scheduled to issue a proposal in October on infrastructure assets such as highways and sewer systems that will look at how they should be recognized and measured in financial statements as well as other issues. In some ways, the new statement could be used to track spending under the bipartisan Infrastructure and Investment Jobs Act that Congress passed in 2021.

"It is about accounting for those types of investments that a government would make, and hopefully giving better information about their current infrastructure so that they can make good decisions about where infrastructure investment is needed," said Black. "What we heard from users of government financial reports — in particular those in the investment community, but it could extend to others too — is two main things. More traditional capital assets are largely working OK, but for these long-lived assets — roads, bridges, sewer systems — the value shown on the financial statements didn't always necessarily reflect the condition of those types of assets. And then they wanted more information about what they would call a deferred maintenance liability"

The tentative board decisions so far say that for the value on the financial statements, GASB would allow state and local governments to maintain what the current requirements are, giving them the ability to record those infrastructure assets at cost and depreciate them over their expected useful life of providing service to the citizens. They also could continue to use a modified approach where they could avoid depreciation if they do condition assessments every few years and assess the condition of their infrastructure assets against a predetermined condition level, and report information about that in the financial statements so the assets would not have to be depreciated because they're being maintained at a certain level. But given the ongoing level of deterioration in much of the nation's infrastructure, GASB may also propose a way to account for that.

"We're going to keep those two ways of accounting for infrastructure," said Black. "But we are looking to propose that the depreciation aspect for governments, which for most governments is using historical cost and depreciation, improving depreciation to require a periodic review of the estimated useful life, because our research showed that some governments set that initial estimated useful life for roads or whatever, and just forget it. They just apply it blindly to all roads. They're not continuously updating that estimated useful life to make sure that as you're depreciating that infrastructure asset, the value is more conditioned to how long you think you're going to use it, and actually spread the cost of that out over the appropriate period. So we're proposing to do that."

GASB is also proposing to componentize the requirement to capitalize infrastructure. "If a significant part of an infrastructure asset has a significantly different estimated useful life than the rest of it, capitalize those and depreciate them separately," said Black. 

For example, road surfaces that get replaced approximately every five years would be capitalized differently than the base of the roads, which could last for decades.

Other changes could be coming in accounting for deferred maintenance liability. 

"The board has said deferred maintenance as a 'liability' does not meet our conceptual definition of what a 'liability' is, so we're not going to require that," said Black. "Even more broadly, that term is pretty subjective in order to assess what maintenance you have been deferring against what condition and have that be consistently applied. So instead of requiring anything for deferred maintenance, what we're going to propose, and tentatively decided to propose, is to provide more information about what the government is spending currently on maintaining its infrastructure assets. Because that number currently is just buried in expenses, no user can really get out how much the government is spending to maintain its infrastructure. We would propose that the note disclosure and/or required supplementary information would break that number out for the year, compare it maybe against what was budgeted by the government that it expected to spend to maintain that infrastructure that year, and maybe a 10-year historical trend of those numbers. That would give a user some information about what the government is actually spending based on where it is and how much infrastructure it has. Does that seem like a lot? Does that seem like not very much? Can they ask more questions? We're trying to give them some information, but information that's maybe a little more appropriate for historical financial statements, and a little more consistently applied."

That could give citizens better insights into the cost of repairing the crumbling infrastructure seen across the country.

"As governments invested a lot over the years in these roads and bridges, especially in sections of the country that are older, some of that infrastructure is really old," said Black. "What is its value on the financial statements? How's that reflected? How is the user supposed to know this bridge, this sewer system, the pipes that are under the ground that nobody can see are old and falling apart? Or new and in good shape? How much have they been maintained? I think that certainly is where the users are coming from and trying to say, we need more information."

That could help with accounting for the impact of climate change and how it's affecting and damaging bridges and other pieces of infrastructure.

"What we found was that we have an impaired capital asset standard that works pretty well and applies to infrastructure, so it would probably already address things like that pretty well," said Black. "But to the extent it's impairing a better number already, then it's getting better by default, too. As climate change happens, and that affects useful lives, and you're continuously evaluating that instead of just using the same policy you used 10 years ago, to spread the cost of your roads or bridges over, then I think it should reflect changing conditions and environment to the extent that's changing the useful lives of these assets."

Going concern, severe financial distress and subsequent events

A "preliminary views" document for the infrastructure project is expected to come out in October. Two other proposals are scheduled to be issued for comment near the end of the year: going concern and severe financial stress disclosures (in December) and subsequent events (also in December).

"Both of these, the infrastructure project and the going concern and severe financial distress projects, are relatively recent additions to our agenda," said Black. "They're both in similar phases, in that they're both coming out for due process later this year with a preliminary views document, which means we still would have another round of due process after that. This is initially what the board's thinking about these two projects. Let's get some feedback on that, and then we'll go back and develop an actual draft standard and get feedback on that."

For the going concern project, GASB's research has shown the existing standard for governments wasn't being consistently applied because it was written more for the private sector. "Governments in some states legally can't go bankrupt or go out of business," said Black. "They can't cease to exist."

However, state and local governments can come under considerable financial stress and should issue disclosures when that's the case.

"We're trying to write a standard that works for governments," said Black. "In doing that and acknowledging that governments can sometimes go bankrupt or cease to exist, we created two concepts. One is going concern uncertainty, which is really similar to what you might think of as not continuing to exist as the same legal entity for 12 months after the financial statements. But a separate thing might be related, called severe financial stress. For both of these two concepts within this proposal, we will attempt to broadly define what going concern uncertainty is and what severe financial stress is. It will be a judgment call by the government preparer to evaluate their facts and circumstances, use this definition and determine whether they have a going concern uncertainty or whether they're in severe financial stress. We will give them some relevant factors to think about these types of things, but it won't be a checklist that if you meet three of these, you're in this. If they determine they are having going certain uncertainty or are in severe financial stress, there will be some disclosure requirements in the notes for them to alert a reader about either of those conditions."

That going concern uncertainty might apply, for example, if a town is losing so much population that its leaders have decided to have a neighboring city or town merge with or absorb it.

"If it's probable that it will happen within 12 months of the financial statement issuance, then that is the kind of thing that would be a going concern uncertainty," said Black. "Even if it's absorbed not necessarily because it was in financial stress, but just because taxpayers decided that this was a more efficient way to deal with providing government services, that would still be going concern uncertainty."

The subsequent events project is smaller than the going concern project, so GASB has decided to go straight to an exposure draft in December. Like the going concern project, GASB did some research and found that the literature also was not being consistently applied. 

"In fact, we found some academic research that looked at items where we knew a subsequent event should have been disclosed, and the error rate of when it wasn't was close to 30% of the time it wasn't disclosed when it should have been disclosed," said Black. "This project tries to create more consistent application so we don't have error rates like that, and then subsequent events are actually disclosed when they're required, not necessarily to change what is a subsequent event, but better describe it, so that we can get better results from the standard."

Examples of the kinds of subsequent events that might be reported include subsequent debt issuance, subsequent government combinations and natural disasters. 

Implementation guide

GASB also has a proposed implementation guide in the works that's scheduled to be released for public comment toward the end of this year and is likely to be finalized in 2025. The guide will include Q&As on a number of standard-setting topics.

"We periodically update our comprehensive Q&A set of implementation guidance," said Black. "We were doing that annually, but recently it's been more like every other year. When we have enough questions, and we think it's important enough to put one out, we will put one out."

Statement 101 on compensated absences . 

Pension post-implementation review

pension standards , but it's planning to come out with a post-implementation review. 

"For the bigger standards, we evaluate that standard, say, five years or so after it's been effective to see if it is achieving what we wanted it to achieve," said Black. "Are the benefits being seen the way we expected them to? Were the costs in line with what we expected them to be. What are the costs/benefits? The pension PIR report is about to come out at the end of May. A chart in that report shows the technical inquiries, and you see it spike the year of implementation and maybe the next year it has come down and settled at a much lower level."

Technology advances

website launched earlier this year, and new technology to improve its internal research.

"We're seeing good traffic on the website," said Black. "What we hear more anecdotally is people are finding what they need easier. It's easier to navigate. They can find what they came to find better. We continue to get a lot of really good feedback on the GARS, the Government Accounting Research System that was really significantly modified and improved in 2023. We're getting a lot of really good feedback and a lot of people are using that and interact with our literature in that way."

GARS includes all of GASB's authoritative literature, organized into codifications of the original pronouncements, along with implementation guidance and Q&As. "GARS allows you to easily search within all of that guidance and find places in the guidance that can help you, whether it be a Q&A or the actual guidance related to a topic area that you're trying to find," said Black. "It is our actual literature. It's free to use, free to access. It's really easy to navigate. We always had GARS, but it was old. It was hard to navigate the search function. You had to pay to subscribe to use it, and even then it didn't work all that well. Now it's free for everybody. It's much more intuitive to navigate and search. The website is similar in that it gets much more intuitive to navigate and find what you're looking for there as well."

Bridging the GAAP" podcast series of 10-15-minute episodes focusing on different issues in governmental accounting. So far, there have been three episodes: on the Financial Data Transparency Act, the proposed guidance for the disclosure and classification of certain capital assets, and on GARS. Two more are planned in the next few months on the post-implementation review of the pension standards in a two-part episode, the first one describing the PIR process in general and the second going over the pension PIR results. 

"I think that that's a good way to meet people where they are a little bit differently," said Black, "We're just continuing to try those new avenues to reach our stakeholders."

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Home » Guidance » GASB Statement No. 102, Certain Risk Disclosures, Update

GASB Statement No. 102, Certain Risk Disclosures, Update

The Governmental Accounting Standards Board (GASB) has issued Statement No. 102, Certain Risk Disclosures , to provide users of government financial statements with essential information about risks related to a government’s vulnerabilities due to certain concentrations or constraints. Although this new guidance centers around risk, GASB 102 does not define risk. In fact, the GASB did not spend much time during deliberations discussing what is meant by the term risk, likely because the term risk is already defined in GASB Statement No. 10, Accounting and Financial Reporting for Risk Financing and Related Insurance Issues , which states that risk is “defined variously as uncertainty of loss, chance of loss or the variance of actual from expected results.” Within the context of GASB 102, we can think of risk as the combination of a condition (limited to a concentration or constraint) plus an event, which may result in a substantially negative impact.

Several years ago, the Financial Accounting Standards Board (FASB) issued what is now known as FASB Topic 275, Risks and Uncertainties , which requires certain disclosures about the nature of operations, the use of estimates in the preparation of the financial statements, and significant concentrations. When the GASB deliberated on which FASB guidance to incorporate into GASB literature (GASB 62), it was decided that FASB Topic 275 would not be incorporated until the GASB could assess the requirements considering the government environment. GASB 102 is the result of that assessment or deliberation. It should be noted that most of what is in FASB Topic 275 did not make it into GASB 102. And unlike FASB Topic 275, GASB 102 does not require a disclosure just because a concentration exists.

What Is a Concentration and a Constraint, As Defined by GASB 102?

A concentration is a lack of diversity related to an aspect of a significant inflow or outflow of resources. For example, a single employer that employs a majority of the taxpayers in a government’s jurisdiction or a government that relies on one revenue source for most of its funding. Concentrations may include, but are not limited to, the composition of any of the following:

• Employers such as a large manufacturer in a small rural town
• Industries such as a resort town that relies on tourism
• Inflows of resources such as a special purpose government that receives most of its revenue from a single federal agency
• Workforce covered by collective bargaining agreements such as a transportation entity where all drivers/operators belong to a single union
• Providers of financial resources such as a town with significant long-term financing from a single financial institution
• Suppliers of material, labor or services, such as a public utility with a single coal source

A constraint is a limitation that is imposed by an external party or by formal action of a government’s highest level of decision-making authority. For example, a voter-approved property tax cap or a state-imposed debt limit. Constraints may include, but are not limited to, the following:

• Limitations on raising revenue, such as a cap on the allowed increase in tax rates
• Limitations on spending, such as a spending budget that can’t be exceeded without external approval.
• Limitations on the incurrence of debt, such as a debt ceiling
• Mandated spending, such as newly imposed federal environmental standards requiring outlays to comply

When Is GASB 102 Effective?

The requirements of this Statement are effective starting for governments with a fiscal year end of June 30, 2025. Earlier application is encouraged. For most governments, implementation of this guidance will be a non-event, only requiring an internal consideration without an effect on financial reporting. It may be an excellent candidate for early implementation.

What Does GASB 102 Change?

The GASB believes that responsible government officials are already aware of significant concentrations or constraints affecting their jurisdictions. Certainly, GASB 102 is not intended to be the catalyst for bringing such things to their awareness. A government may have a long history of operating with certain concentrations or constraints placed on them. Responsible officials should also already be aware of when an event, or series of events becomes a problem because of the existing concentrations or constraints.

For example, a small town whose primary taxpayer is a large manufacturer will certainly already be invested in keeping said taxpayer within its tax base. News of the manufacturer closing or relocating to a different jurisdiction will be a major concern for the residents of that town. All of this is true without GASB 102. However, what GASB 102 does is require those circumstances to be disclosed in the town’s financial statements. A disclosure is not required when only that concentration exists. A disclosure is required when the event (loss of the taxpayer) is expected to occur in the next year and the effect will be substantial.

Disclosure Criteria

Statement 102 requires governments to disclose a concentration or constraint in the notes to the financial statements if all of the following criteria are met:

• A concentration or constraint is known before the financial statements’ issuance
• The concentration or constraint makes the reporting unit vulnerable to a substantial impact
• An event or events associated with the concentration or constraint that could cause a substantial impact have occurred, have begun to occur, or are more likely than not to begin to occur within 12 months of the date the financial statements are issued

If mitigating actions are taken before the financial statements’ issuance, and they cause any disclosure criteria not to be met, note disclosures are not required.

The application of the disclosure criteria requires the exercise of professional judgement. Nowhere in the GASB literature is the term substantial defined. The GASB believed that prescribing a definition would cause more problems than it would solve. Based on the context of the deliberations, however, substantial can be thought of as more than significant (which is thought to be synonymous with material) but less than severe (possibly catastrophic). Additionally, the likelihood of the impact occurring within the next 12 months also requires professional judgement.

Disclosure in Notes to the Financial Statements

A government should disclose each concentration or constraint that meets the disclosure criteria above in the notes to the financial statements. In its deliberations, the GASB was reluctant to prescribe specific disclosure requirements. The concern with doing so was that governments would limit disclosures to only the minimum requirements and that disclosures would become boilerplate. But the concern with not prescribing disclosure requirements was that governments wouldn’t disclose nearly enough. The spirit of the requirements is that disclosures should provide users with a clear understanding of the nature of the concentration or constraint and its impact. Statement 102 requires the disclosures to describe the following information:

• The concentration or constraint
• Each event associated with the concentration or constraint that could cause a substantial impact if the event had occurred or had begun to occur prior to the issuance of the financial statements
• Note that future plans would be inappropriate for disclosures and should not be included

Planning for GASB 102 and Beyond

While GASB has identified GASB 102 as a small potential level of effort to implement, having a comprehensive framework to address all upcoming GASB pronouncements is critical for a high-performance state or local government.

Cherry Bekaert has developed a GASB Roadmap checklist that helps track GASB’s assumed level of effort, industry impact, and government available resources to adequately prepare for all upcoming GASB pronouncements and other significant federal and state regulatory issues. For a GASB Roadmap of your own, please reach out to our GASB-as-a-Service professionals.

Questions? Contact Us

Related Guidance

• Podcast: Navigating GASB 102: Certain Risk Exposure
• Article: 4 Reasons to Co-source Government Accounting Functions