Government GPS

The Latest Rules and Regulations That Impact Your Government Entity

A Brief Look at GASBS 71

GASB Statement number 71 has been issued for the simple purpose of amending one paragraph in GASB Statement 68. Because of this, it is required to be applied in the same year of implementing GASB 68. Also, it is only going to be used in the first year of implementing 68, the transition year, and no year after that. GASB Statement 71 amends paragraph 137 of GASB Statement 68.

In the transition year of GASB Statement 68, GASB Statement 71 requires governments who are employers or non-employers contributing to a defined benefit pensions who have made contributions subsequent to the measurement date of the beginning net pension liability to recognize a beginning deferred outflow of resources for its pension contribution in its accrual basis financial statements. This beginning deferred outflow of resources for pension contributions will be used in reconciling to the ending net pension liability in the first year of implementation.

If you believe your government may be an employer or non-employer that this affects going into the implementation year of GASB 68, we suggest reading the entire GASB Statement 71 and consult your government accountant for the proper treatment of your deferred outflows and inflows. If you do not have a government accountant that can aid in this transition, and you feel you need one, the government accountants at Henry & Horne may be a good option for you. We are available to help.

We will be hosting a series of presentations on the implementation of GASBS 68 and 71 throughout the next six months. I and my colleague, Jeff Patterson, CPA, will be presenting a live two hour class in our office in late April, along with a live webinar that you can attend if interested. We will also be presenting these topics at GFOAz winter conference in Prescott, Arizona; the AASBO spring conference in Laughlin, Nevada; and the AASBO summer conference in Tucson, Arizona. Our focus will be on Arizona based defined benefit pension plans. If you are interested in attending our live presentation or webinar, please contact Chelsea Kreger at chelseak@hhcpa.com or call her at (480) 839-4900 for more information.

By Brian Hemmerle, CPA, CFE