“Sunlight is said to be the best of disinfectants. Electric lights the most efficient policeman.” – Louis Brandeis (Supreme Court Justice)
That’s right, two giants steps! The latest standards on more transparent pension disclosures by GASB for state and local government and the implementation of the Federal Data Act for federal spending data.
Most CPAs never forget their Intermediate Accounting Courses and specifically one of the most complex and hardest topics – pension accounting. Unfunded liabilities, assets and expenses, amortization schedules, discount rates and actuarial assumptions. With all of the recent debates over government debt and future obligations, GASB issues several major standards updates last year which are closing in on implementation in June, 2015
David Vaudt, Chairman of GASB, released a major toolkit to assist government CPAs in implementation of these new pension accounting standards (GASB #67, #68, & #71)
“The GASB is committed to providing our stakeholders with a full array of resources to assist in their understanding and implementation of the pension standards,” said GASB Chairman David A. Vaudt. “This toolkit highlights key implementation issues and provides guidance on how preparers and auditors of state and local governments can effectively comply with the requirements.”
The toolkit is designed to help preparers, auditors, and users of state and local government financial reports understand and apply the revised pension accounting and financial reporting standards that the GASB approved in June 2012.
David highlights five key areas for successful implementation in this brief video:
- Pension Funding Policy
- Selection of Assumptions
- Timing of Measurements
- Frequency & Timing of Actuarial Valuations
- Employer Reporting Information
I love the plain english version of their Q&A, Setting the Record Straight which addresses some of the frequent misperceptions about this complex accounting topic.
Statement No. 67 will take effect for pension plans in fiscal years beginning after June 15, 2013 (that is, for years ended June 30, 2014 or later). Statement No. 68 will take effect for employers and governmental nonemployer contributing entities in fiscal years beginning after June 15, 2014 (that is, for years ended June 30, 2015 or later).
Second is the passage of the DATA Act covered in detail by the Data Transparency Coalition and our friend, Hudson Hollister.
Dan Roth writing for Wired Magazine wrote this in the February, 2009 artivle, Road Map for Financial Recovery: Radical Transparency Now covering the Wall Street mortgage meltdown
“When data is kept under lock and key, as mysterious as a temple secret, only the priests can read and interpret it. But place it in the public domain and suddenly it takes on new life. People start playing with the information, reaching strange new conclusions or raising questions that no one else would think to ask. It is impossible to predict who will become obsessed with the data or why—but someone will.”