GASB 45 Requirements

  • FASB is the private, not-for-profit organization designated by the SEC to develop generally accepted accounting principles for US public companies. GASB is FASB's counterpart for state and local government accounting.

  • GASB's new accounting rules are dramatically changing the way public entities must account for the cost of "Post-employment Benefits Other Than Pensions (OPEB)."

  • Entities must now identify and disclose OPEBs as an expense and liability on their financial statements for the first time.

  • Entities have to evaluate whether they have an OPEB liability, and have an actuarial valuation done to determine the amount of unfunded liability for financial statements. Entities also have to address how best to manage the liability for the future.

  • Entities are under pressure to fund the obligation in advance rather than prior "pay as you go" basis.

  • Failure to pre-fund the obligation impacts future borrowing costs, credit ratings, and overall financial health of organizations.

  • GASB 45 Compliance Date-based on size of revenues:
Annual Revenues Required Starting
$100 million and up July 1, 2007
$10 million to 100 million July 1, 2008
Under 10 million July 1, 2009