Government Accounting Advisor: GASB Issues Two New Implementation Guides

The GASB issued two new implementation guides during April of this year. Implementation Guide No. 2017-1, Implementation Guidance Update-2017, addresses a variety of issues, while Implementation Guide No. 2017-2, Financial Reporting for Postemployment Benefit Plans Other Than Pension Plans, includes more than 150 questions and answers (Q&As) on implementation of GASB No. 74, Financial Reporting for Postemployment Benefit Plans Other Than Pension Plans.

No. 2017-1, Implementation Guidance Update-2017

The 2017 implementation guide update includes the following:

  • New Questions and Answers.
  • Amendments to Previously Issued Questions and Answers.
  • Appendix A: Background Information.
  • Appendix B: Description of New Questions and Answers and Amendments to Previously Issued Questions and Answers.
  • Appendix C: Illustrations.
  • Appendix D: Codification Instructions.

Forty-one new Q&As cover subjects including: cash flows reporting; the financial reporting entity; plan and employer accounting and reporting for pensions; accounting and financial reporting for certain investments and for external investment pools; GASBS No. 54, Fund Balance Reporting and Governmental Fund Type Definitions; and GASBS No. 77, Tax Abatement Disclosures.

In addition, 33 Q&A items from prior Implementation Guides have been superseded or amended on the following topics:

  • Disclosures Related to Deposits with Financial Institutions, Investments (Including Repurchase Agreements), and Reverse Repurchase Agreements.
  • Risk Financing and Related Insurance Issues.
  • The Financial Reporting Entity.
  • Pensions-Plan and Employer Accounting and Reporting.
  • Basic Financial Statements and Management’s Discussion and Analysis.
  • GASBS No. 33, Accounting and Financial Reporting for Nonexchange Transactions.
  • GASBS No. 51, Accounting and Financial Reporting for Intangible Assets.

Also, one new illustration is provided in Appendix C entitled “Determination of the Discount Rate in Circumstances in Which Total Employer Contributions to the Pension Plan Equal Benefit Payments Made.” The illustration includes several tables with examples of projections and calculations used to determine discount rates for pension plan accounting.

No. 2017-2, Financial Reporting for Postemployment Benefit Plans Other Than Pension Plans

Implementation Guide No. 2017-2 includes guidance for state and local governments on the application of the provisions of GASBS No. 74, Financial Reporting for Postemployment Benefit Plans Other Than Pension Plans. The new Q&A items provide a resource for common plan implementation situations that auditors and plan management may encounter related to the following:

  • Scope and applicability of GASBS No. 74.
  • Types of OPEB plans and benefits.
  • Plan financial statements and financial statement elements.
  • Notes to plan financial statements and required supplementary information (RSI).
  • Measurement of the net OPEB liability.
  • GASBS No. 74 effective date and transition guidance.

The Implementation Guide also provides illustrations in Appendix B, which covers the determination and calculation of various amounts and provides plan disclosure and RSI illustrations.

Effective Dates and Other Information

The requirements of Implementation Guide No. 2017-1 are effective for reporting periods beginning after June 15, 2017, but earlier application is encouraged if the pronouncement addressed by the Q&As has been implemented. Implementation Guide No. 2017-2 is effective for reporting periods beginning after December 15, 2016, except for certain questions effective for reporting periods beginning after June 15, 2017. Earlier application of Implementation Guide No. 2017-2 is encouraged if the related OPEB plan provision of GASBS No. 85, Omnibus 2017, has been implemented. The implementation guides each include specific transition guidance.

The GASB implementation guides are Category B authoritative guidance under GAAP. The guidance applies to all state and local governments following GAAP financial accounting and reporting standards.