Governmental Accounting Standards Board 67 and 68


Length: 530 words (1.5 double-spaced pages)
Rating: Excellent
Open Document
Need writing help? Check your paper »

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

Text Preview

More ↓
As financial accounting has its set of rules, governmental accounting has its own. Governmental entities in preparing financial statements and related accounting report must follow the rules set by the Governmental Accounting Standards Boards (GASB). On June 25, 2012, in Norwalk, CT, the Governmental Accounting Standards Board has voted two new standards that will considerably change and develop the accounting and financial reporting of public employee pensions by state and local governments. The first one is Statement No. 67 which is “Financial Reporting for Pension Plans” that revises existing regulation for the financial reports of most pension plans. The second one is Statement No. 68 which account for “Accounting and Financial Reporting for Pensions” that reviews and creates new financial reporting requirements for most governments that provide their employees with pension benefits.
The objective of these new standards is to improve the way state and local governments normally prepare reports on their pension liabilities and expenses. The logic behind that is, it will create and project a highest level of faith and confidence in the representation of the full impact of these obligations. One of the improvements is that net pension liabilities will be reported on the balance sheet. That change is to provide to citizens and all the users of financial reports producing by governmental entities a better representation of the size and nature of the financial obligations.

For financial reporting purposes we distinguish two types of pension plan; a defined benefit plan and a defined contribution plan. Both plans will provide income steam to retirees. Nevertheless, a defined plan is based on the benefit terms and a contribution plan is grounded on the amount the employee would contribute over his or her working life period; it is a compound of actual earnings on investment of the aggregate amount contributed and other factors.
Moreover, a defined benefit plan can be classified into two subcategories; one based on the number of governments participating in a particular pension plan and the other if assets and obligations are shared among the participating governments. Distinction is also made on the number of employers participating to the plan and the number of employers that have access to the funds. A single employer plan is the one in which assets are combined for investment purposes, but each employer’s share of the pooled assets will be legally used to pay the benefits to only its employees; and a cost-sharing employer or multiple plan in the one in which participating employers pool or share obligations to provide pensions to their employees and plan assets can be used to pay the benefits of employees of any participating employer.

Need Writing Help?

Get feedback on grammar, clarity, concision and logic instantly.

Check your paper »

How to Cite this Page

MLA Citation:
"Governmental Accounting Standards Board 67 and 68." 123HelpMe.com. 12 Dec 2017
    <http://www.123HelpMe.com/view.asp?id=299855>.
Title Length Color Rating  
Government Accounting Standards Board versus Financial Accounting Standards Board - ... They are appointed for five year terms, and are eligible for an additional five year term. The FASB uses due process to implement the process of the standard setting process. The rules for setting or changing standards include; identifying financial reporting issues from stakeholders or other sources, and then the FASB decides whether or not to add the issue to the agenda. Once that is done the boards deliberates at one or more public meetings, and an Exposure Draft is issued for stakeholder input....   [tags: private vs government/non-profit companies]
:: 6 Works Cited
1016 words
(2.9 pages)
Term Papers [preview]
Essay on Accounting Standards - The Federal Government, State and Local Governments (SLG), and Not-for-profit organizations (NFP) all have unique objectives and assets under their control. As a result it may not be feasible to develop a single set of accounting standards that accurately represents all of their financial activity in a manner that is useful to concerned parties. To resolve these discrepancies three separate standard setting bodies have been tasked with developing Generally Accepted Accounting Principles (GAAP) for these different organizations: The Federal Accounting Standards Advisory Board (FASAB) for federal accounting, the Governmental Accounting Standards Board (GASB) for SLG, and the Financial Accounti...   [tags: Business Finance Accounting] 1374 words
(3.9 pages)
Strong Essays [preview]
The Government Accounting Standards Board Statement 45 Essay - ... From an accrual accounting perspective, the cost of OPEB, like the cost of pension benefits, generally should be associated with the periods in which the exchange occurs, rather than with the periods when benefits are paid or provided (usually many years later). When implementing GASB 45, many governments will report annual OPEB costs and the unfunded actuarial accrued liabilities (UAAL) for past service costs. Disclosure of this information will foster improved accountability and better informed policy decisions about the level and types of benefits provided by employers and potential methods of financing and managing those benefits....   [tags: affect on government entities]
:: 7 Works Cited
841 words
(2.4 pages)
Better Essays [preview]
Accounting Regulatory Bodies Paper - Accounting Regulatory Bodies Paper Introduction The success of a company is very dependent upon its financial accounting. In accounting there are numerous Regulatory bodies that govern the accounting world. These companies are extremely important to a company because they set the standards when it comes to the language and decision making of a company. These regulatory bodies can be structured as agencies, associations, commissions, and boards. Without companies like the Security and Exchange Commission (SEC), The Financial Accounting Standards Board (FASB), the Governmental Accounting Standards Board (GASB), Internal Accounting Standards Board (IASB), Internal Revenue Service (IRS), and ot...   [tags: Monitoring Regulation Accounting] 721 words
(2.1 pages)
Strong Essays [preview]
The Government Accounting Standards Boards 45 Essay - GASB 45 The Government Accounting Standards Board (GASB) issued Statement 45 (GASB 45) in June 2004; this statement establishes accounting and reporting standards for post-employment benefits other than pensions, or “other post-employment benefits (OPEB),” offered by state and local governments. It requires local governments to actuarially determine their annual required contribution (ARC) to fund OPEB and to account for the unfunded amount as liabilities on annual financial statements. Government employers required to comply with GASB 45 include all states, towns, education boards, public schools, and all other government entities that offer OPEB and report under GASB....   [tags: GASB 45, Post-employment Benefits]
:: 10 Works Cited
1281 words
(3.7 pages)
Strong Essays [preview]
Essay about Tax Law And Accounting - Tax Law and Accounting Income tax is a part of the fiscal policy of our economy. The first federal income tax was imposed by Congress in 1862, to finance the waging of the Civil War. The Civil War income tax was repealed in 1872, but a new income tax was enacted as part of the 1894 Tariff Act. However, the Supreme Court struck down the income tax in 1895. It ruled that the portion of the income tax that applied to income on property was a direct tax that, under the United States Constitution, could not be levied without apportioning the tax by population....   [tags: Tax Accounting Financial Finance] 1174 words
(3.4 pages)
Strong Essays [preview]
The Financial Accounting Standards Board (FASB) Essay - To help accounting professionals easily navigate through 50-plus years of unorganized US generally accepted accounting principles (GAAP) and standards the Trustees of the Financial Accounting Foundation approved the Financial Accounting Standards Board (FASB) Accounting Standards Codification (Codification.) By codifying authoritative US GAAP, FASB will provide users with real-time and accurate information in one location. Concurrently, FASB developed the FASB Codification Research System; a web-based system allowing registered users to electronically research accounting issues....   [tags: Accounting]
:: 2 Works Cited
946 words
(2.7 pages)
Better Essays [preview]
Essay on The Need for Accounting Standards - What would financial statements look like if there were no accounting standards?” Accounting standards are a set of principle that govern current accounting practice and are used as a reference to determine the appropriate treatment of complex transactions. Having financial statements in the same format allow them to be compared and in this essay we shall discuss how the accounting standards came about, and why it continues to exist until this very day, as the format of such practice has changed dramatically over the years as they are now used as a reference when problems occur....   [tags: Accounting Standards Research]
:: 35 Works Cited
3298 words
(9.4 pages)
Research Papers [preview]
Essay on Sarbanes Oxley SOX - Effective Governance - Sarbanes-Oxley: Effective Governance. Introduction On December 2, 2001, less than a month after it admitted accounting errors that inflated earnings by almost $600 million since 1994, the Houston-based energy trading company, Enron Corporation, filed for bankruptcy protection. With $62.8 billion in assets, it became the largest bankruptcy case in U.S. history, dwarfing Texaco's filing in 1987 when it had $35.9 billion in assets. The day Enron filed for bankruptcy its stock closed at 72 cents, down from more than $75 less than a year earlier....   [tags: Accounting Regulation] 1889 words
(5.4 pages)
Powerful Essays [preview]
Essay about Role and Evolution of The International Accounting Standards Board - Role and Evolution of The International Accounting Standards Board The International Accounting Standards Board, (IASB), began life as the International Accounting Standards Committee (IASC) in the 1973. The IASC was created in June 1973 as a result of an agreement by the accountancy bodies of Australia, Canada, France, Germany, Japan, Mexico, the Netherlands, the United Kingdom and Ireland and the United States. These countries constituted the Board of IASC at that time. The international professional activities of the accountancy bodies were organized under the International Federation of Accountants (IFAC) in 1977....   [tags: Accounts Accounting Business Essays]
:: 2 Works Cited
693 words
(2 pages)
Better Essays [preview]




Statement 67 and 68 come in the replacement of statement 25 and statement 27 respectively. These previous statement defined the annual pension cost as the annual required contribution, unless there is a net pension obligation. In the current statements the balance sheet liability is defined as the net pension obligation. Additionally, the new statements also shift primary focus from expense to balance sheet; it is a complete overhaul approach to public plan accounting. The two new statements will apply to retirement income and certain other benefits like death and disability benefits if they are approved through a pension plan. In the scope of the new rules, pension plan must meet certain criteria: the contributions and earnings have to be irrevocable; the assets are available and will be used only to provide benefits to plan participants; and the assets must be protected from the creditors of the employers.







Return to 123HelpMe.com