Technical Update Presented by Chris Ray Partner - KPMG LLP KPMG LLP

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Technical UpdatePresented by Chris RayPartner
- KPMG LLPKPMG LLP
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GASB Statement No. 43Financial Reporting for
Postemployment Benefit Plans and Other Than
Pension Plans

• Effective Date
• Fiscal Year 2007
• Fiscal Year 2008
• Fiscal Year 2009

• Annual Revenues
• gt 100 million
• gt 10 million andlt 100 million
• lt 10 million

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GASB Statement No. 45 Accounting and Financial
Reporting by Employers for Postemployment
Benefits Other Than Pensions Effective Fiscal
Year 2008

• Establishes standards for the measurement,
  recognition, and display of other postemployment
  benefits (OPEB) expense/expenditures and related
  liabilities (assets), note disclosures, and, if
  applicable, required supplementary information
  (RSI)
• Required to measure and disclose an amount for
  annual OPEB cost on the accrual basis of
  accounting

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GASB Statement No. 47Accounting for Termination
BenefitsEffective Fiscal Year 2006 / 2008

• Establishes accounting standards for termination
  benefits
• Distinguishes between voluntary and involuntary
  termination benefits
• Voluntary termination benefits
• Inducements to hasten the termination of services
• For example, early retirement incentives
• Involuntary termination benefits
• Benefits provided as a consequence of the early
  termination of services
• For example, severance pay

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GASB Statement No. 47 - continued

• Recognition Accrual Based Statements
• Voluntary termination benefits
• Recognize liability and expense when the
  employees accept the offer and amounts can be
  estimated
• Measurement of the liability should be updated,
  and any incremental liability should be
  recognized as of the end of each subsequent
  reporting period

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GASB Statement No. 47 - continued

• Recognition Accrual Based Statements
• Involuntary termination benefits
• Recognize liability and expense when
• Plan of termination has been approved by those
  with the authority to commit the employer to the
  plan
• The plan has been communicated to the employees
• Amounts can be estimated
• Measurement of the liability should be updated,
  and any incremental liability should be
  recognized as of the end of each subsequent
  reporting period
• If employee must render future service to receive
  termination benefit, recognize benefit over
  future service period

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GASB Statement No. 48Sales and Pledges of
Receivables and Future Revenues and Intra-Entity
Transfers of Assets and Future RevenuesEffective
Fiscal Year 2008

• Transaction is presumed to be a collateralized
  borrowing unless the specified criteria is met (
  6-9)
• Provides guidance for transfers of assets or
  future revenues within the same reporting entity
• Provides guidance on pledges of future revenues
  when resources are not received by the pledging
  government
• Guidance provided on recording transactions for
  entities outside the governments reporting
  entity and for entities that re part of the
  governments reporting entity

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GASB Statement No. 49Accounting and Financial
Reporting for Pollution Remediation
ObligationsEffective Fiscal Year 2009

• Statement 49 requires recognition of a pollution
  remediation obligation when one of five specified
  obligating events occurs
• Obligations should be measured using the expected
  cash flow technique
• Obligation may be measured and recognized in
  components
• Certain outlays may be capitalized in
  accrual-based financial statements
• Guidance is provided on accounting for expected
  recoveries

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Statement on Auditing Standards No.
112Communicating Internal Control Related
Matters Identified in an AuditEffective Fiscal
Year 2007

• SAS No. 112 does not change the scope of a GAAS
  audit. The auditor is not required to design an
  audit to identify control deficiencies. Instead,
  we evaluate control deficiencies. SAS No. 112 is
  relevant when the auditor, in the performance of
  the audit, becomes AWARE of deficiencies.
• Non GAAP Accounting Policies
• Refer to Chapter 8, Section 8.9

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Other Projects

• Statements expected to be issued in 2007
• Pension Disclosures
• Intangible Assets (including computer software)
• Elements Concept Statement
• Land and Other Real Estate Held as Investments by
  Endowments
• Statements expected to be issued in 2008
• Derivatives and Hedging
• Fund Balance Reporting and Governmental Fund
  Definitions

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• Questions?