GASB Seeks Comments on OPEBs, Chap. 9

WASHINGTON - The Governmental Accounting Standards Board on Friday urged market participants to submit written comments on exposure drafts on health care and other post-employment benefit plans and Chapter 9 bankruptcies by Aug. 28.

"By issuing these proposals, the GASB is directly addressing issues raised by its constituents," said Robert Attmore, GASB's chairman. "We encourage our constituents to review the proposals and provide their feedback."

The exposure draft on Chapter 9 bankruptcies for municipalities would establish requirements for recognizing and measuring the effects of the bankruptcy process on assets and liabilities, as well as for classifying changes in those items and related costs.

This particular initiative has grown in importance due to the economic downturn.

"With the current economic environment putting stress on state and local government resources, it became necessary for the GASB to address the financial reporting issues associated with local governments filing for bankruptcy protection under Chapter 9," Attmore said.

The other exposure draft addresses agent multiple-employer plans, in which separate liabilities are calculated and separate asset accounts are kept for each participating government, as opposed to being administered and accounted for as a single plan like in a cost-sharing plan.

GASB's proposal would enable agent employers, under certain circumstances, to use an alternative measurement method as a less complicated and potentially less expensive option to a full actuarial valuation. It also would adjust the requirement that a defined benefit OPEB plan obtain a full valuation from an actuary. Finally, it would require the same frequency and timing of determining OPEB measures by both agent multiple-employer plans and their participating employers.

The proposals are available on GASB's Web site, www.gasb.org.

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