New York (June 25, 2012) – The American Institute of CPAs supported the vote today by the Governmental Accounting Standards Board to improve existing standards for pension accounting and financial reporting for state and local employers, as well as governmental pension plans.
“The AICPA strongly supports GASB’s efforts to improve transparency related to public pension benefits and their effect on the finances of state and local governments,” AICPA President and CEO Barry C. Melancon, CPA, CGMA, said. “The new GASB standards will benefit users of these financial statements, as well as taxpayers, since state and local governments for the first time will have to report unfunded pension liabilities on their balance sheets providing a clearer view of pension obligations.”
Specifically, the new standards will require governments to report in their financial statements a net pension liability that is equal to the difference between the total pension liability and the value of assets set aside in a pension plan to pay benefits to current employees, retirees and their beneficiaries. Currently, governments must only report as a liability the difference between the contributions they are required to make to a pension plan in a given year versus what they actually funded.
The two standards approved by GASB – Statement No. 67, Financial Reporting for Pension Plans, and Statement No. 68, Accounting and Financial Reporting for Pensions – have different implementation dates. The provisions in Statement 67 are effective for periods beginning after June 15, 2013. The provisions in Statement 68 are effective for fiscal years beginning after June 15, 2014.
About the AICPA
The American Institute of Certified Public Accountants (AICPA) is the world’s largest association representing the accounting profession, with nearly 377,000 members in 128 countries and a 125 year heritage of serving the public interest. AICPA members represent many areas of practice, including business and industry, public practice, government, education and consulting.
The AICPA sets ethical standards for the profession and U.S. auditing standards for audits of private companies, non-profit organizations, federal, state and local governments. It develops and grades the Uniform CPA Examination and offers specialty credentials for CPAs who concentrate on personal financial planning; fraud and forensics; business valuation; and information technology. Through a joint venture with the Chartered Institute of Management Accountants (CIMA), it has established the Chartered Global Management Accountant (CGMA) designation to elevate management accounting globally.
The AICPA maintains offices in New York, Washington, DC, Durham, N.C., and Ewing, N.J.