State and local government employers will soon be required to reflect the cost of non-pension post-employment benefits (e.g. health coverage, life insurance, etc.) in their financial reports. The Governmental Accounting Standards Board (GASB) (the public sector corollary to the Financial Accounting Standards Board for private sector employers) requires implementation in three phases based on a government's total annual revenues in the first fiscal year ending after June 15, 1999.
For governments with total annual revenues of $100 million or more, the GASB rule applies for fiscal years that begin after December 15, 2006. For governments with revenues between $10 million and $100 million, the GASB rule applies for fiscal years that begin after December 15, 2007. For governments with revenues of less than $10 million, the ýASB rule applies for fiscal years that begin after December 15, 2008. The Governmental Accounting Standards Board encourages earlier implementation.
The Governmental Accounting Standards Board's Statement No. 45 explains this requirement. This Statement establishes standards for the measurement, recognition and display of related liabilities in the financial reports of state and local governmental employers. CFOs of public employers can go to the GASB website for more information, www.gasb.org.