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There's been a lot of talk in the air lately about GASB. The Board listened to a presentation on GASB at its recent retreat. It's time for the Faculty Association to weigh in on GASB. So let's start with some questions and answers taken verbatim from GASB's own website. 1. What is GASB? GASB is an acronym for the Governmental Accounting Standards Board. The GASB is the independent, not-for-profit organization formed in 1984 that establishes and improves financial accounting and reporting standards for state and local governments. Its seven members are drawn from the Board's diverse constituency, including preparers and auditors of government financial statements, users of those statements and members of the academic community. More information about the GASB can be found at its website www.gasb.org. 2. Who formed GASB? The Governmental Accounting Standards Board was formed after agreement by the Financial Accounting Foundation, the American Institute of Certified Public Accountants, the Government Finance Officers Association, the National Association of State Auditors, Comptrollers and Treasurers, and the seven organizations representing state and local government officials. 3. What is GASB's stated mission? The mission of the GASB is to establish and improve standards of state and local governmental accounting and financial reporting that will result in useful information for users of financial reports and guide and educate the public, including issuers, auditors, and users of those financial reports. In establishing its standards, the GASB exercises its judgment only after research, due process, and careful deliberation. 4. Who controls GASB? The GASB operates under the oversight of the Financial Accounting Foundation, which is responsible for funding the activities of both the GASB and its counterpart for private enterprise, the Financial Accounting Standards Board [FASB]. The Foundation also is responsible for selecting the members of both Boards and their respective Advisory Councils. 5. Who controls the Foundation? Eight professional accounting and financial organizations control who sits on the board of the Foundation. FAF Board Members 6. What is GASB's claimed authority? Unless otherwise specified, pronouncements of the GASB apply to financial reports of all state and local governmental entities, including general purpose governments; public benefit corporations and authorities; public employee retirement systems; and public utilities, hospitals and other healthcare providers, and colleges and universities. GASB standards are officially recognized as authoritative by the American Institute of Certified Public Accountants and by many laws and regulations that apply to state and local governments. 7. What is GASB 45? Statement No. 45 [regards] Accounting and Financial Reporting by Employers for Postemployment Benefits Other Than Pensions (Issued 6/04) 8. What does GASB 45 require? Employers that participate in single-employer or agent multiple-employer defined benefit OPEB [Other Post-Employment Benefits] plans (sole and agent employers) are required to measure and disclose an amount for annual OPEB cost on the accrual basis of accounting. Annual OPEB cost is equal to the employer's annual required contribution to the plan (ARC), with certain adjustments if the employer has a net OPEB obligation for past under- or overcontributions. The ARC is defined as the employer's required contributions for the year, calculated in accordance with certain parameters, and includes (a) the normal cost for the year and (b) a component for amortization of the total unfunded actuarial accrued liabilities (or funding excess) of the plan over a period not to exceed thirty years. 9. What if the governmental agency does not fund the actuarial accrued liabilities? If a plan's method of financing does not meet the parameters (for example, the plan is financed on a pay-as-you-go basis), the parameters nevertheless apply for financial reporting purposes. What does this really all mean? See TO GASB OR NOT TO GASB
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