GASB 67 and GASB 68: What the New Accounting Standards Mean for Public Pension Reporting

6 Pages Posted: 21 Sep 2018

See all articles by Sheila Weinberg

Sheila Weinberg

Truth in Accounting

Eileen Norcross

George Mason University - Mercatus Center

Date Written: June 15, 2017

Abstract

In 2012 GASB updated its guidance for the reporting and measurement of public pension plan data, and in fiscal year (FY) 2015, state and local governments began to adopt the new standards, known as GASB 67 and GASB 68, in their comprehensive annual financial reports (CAFRs). The new standards were released in response to criticism that the previous standards, GASB 25 and GASB 27, did not fully measure or report plan liabilities and generated misleading information.

While GASB 67 and 68 improve financial transparency by requiring fuller pension reporting in government financial statements, what is being reported still falls short of accuracy in measurement. GASB should improve the current guidance to reflect economic measurement of risk and eliminate the use of deferrals and delayed reporting.

A review of 144 public pension plans contained in 34 state CAFRs for FY 2014 reveals considerable variation in how the new guidance is applied by governments. In this paper we review each of the standards and consider their effects on state and local financial reporting.

Keywords: GASB, government accounting, budgets, debt, pensions, retirement, liabilities

Suggested Citation

Weinberg, Sheila and Norcross, Eileen, GASB 67 and GASB 68: What the New Accounting Standards Mean for Public Pension Reporting (June 15, 2017). Mercatus on Policy Series. Available at SSRN: https://ssrn.com/abstract=3245301

Sheila Weinberg

Truth in Accounting

No Address Available

Eileen Norcross (Contact Author)

George Mason University - Mercatus Center ( email )

3434 Washington Blvd., 4th Floor
Arlington, VA 22201
United States
703-993-4930 (Phone)

HOME PAGE: http://https://www.mercatus.org/eileen-norcross

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