GASB Hot Topics/Updates

GASB 68 – A Look Back

ASRS provided –

Schedule of Pension

Amounts by Employer

GASB 68 – A Look BackFinancial Statement Impact

Restatement of beginning net position

New accounts include net pension liability, deferred outflows of resources and deferred inflows of resources for pension plan items

Significant decreases in net position

Negative unrestricted net position

GASB 68 – A Look BackFinancial Statement Impact on Net Position

Addition of the net pension liability to the financial statements caused the unrestricted net position amount to be negative in most cases.

ASRS Pension Discussion

• Comments and questions arising from press, board members and others

• Liability decreased in fiscal year 2015, likely to increase for fiscal 2016

• Employers may be requested to provide employee information as part of ASRS audit

• Health care benefits liability to be added in a few years

ASRS Pension Discussion

Question:

Is the District required to fund or set aside resources to pay the liability? Is ASRS going to increase contribution rates to fund the deficit?

Answer:

There is no requirement to fund or set aside resources to pay the liability. As Arizona school districts are required to make the annual required contribution some would argue this in not a fiscally sound decision. ASRS rates are determined based on numerous factors not included in the calculation of the liability reported, including smoothing of investment returns (or losses) and amortization of the liability over 30 years.

GASB 68 – A Look BackCommon Questions & Information Sources

• Bond Rating• Moody’s Special Comment• https://www.moodys.com/research/Moodys-New-pension-disclosures-

under-GASB-6768-will-have-limited--PR_303049

• Funding the Net Pension Liability

• Factors Impacting the Pension Liability Moving Forward?

• Others?

Information Sources• Auditor General: http://www.azauditor.gov/reporting-guidelines-0• ASRS: http://www.azauditor.gov/school-district-reporting-guidelines

Upcoming GASB Statements

• Statement No. 72: Fair Value Measurement and Application

• Statement No. 73: Accounting and Financial Reporting for Pensions and Related Assets That Are Not Within The Scope

of GASB Statement 68, and Amendments to Certain Provisions of GASB Statements 67 and 68

• Statement No. 74: Financial Reporting for Postemployment Benefit Plans Other Than Pension Plans

• Statement No. 75: Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions

• Statement No. 76: The Hierarchy of Generally Accepted Accounting Principles for State and Local Governments

• Statement No. 77: Tax Abatement Disclosures

• Statement No. 78: Pensions Provided Through Certain Multiple-Employer Defined Benefit Pension Plans

• Statement No. 79: Certain External Investment Pools and Pool Participants

• Statement No. 80: Blending Requirements For Certain Component Units – An Amendment of GASB Statement No. 14

2016 GASB Statement

• Statement No. 72: Fair Value Measurement and Application

• The statement requires disclosure about fair value measurements;

specifically, the level of fair value hierarchy, valuation techniques, and

additional disclosures regarding investments in certain entities that

calculate net asset value per share (or its equivalent)

• Cash and investments note to change – “Level 1, 2, 3” identification for fair

value of investments

Not applicable to participation in County and State Treasurer pools