School districts among those affected by new GASB 73, 74 and 75 requirements
School districts are among those governmental agencies that must adhere to the new accounting standards regulating how pensions not funded by a trust and postemployment benefits other than pension plans (OPEB) are calculated. This change will affect how these benefits are presented and recorded in your financial statements.
The Governmental Accounting Standards Board (GASB) statements go into effect this year:
- Portions of Statement 73 are effective for fiscal years beginning after June 15, 2016.
Other post-employment benefits
- Statement 74 is effective for fiscal years beginning after June 15, 2016.
- Statement 75 is effective for fiscal years beginning after June 15, 2017.
What will change?
While these changes may bring increased transparency and a move toward standardizing measurement, they could also significantly impact the amount of information you need to display. Expect expanded footnote disclosures and additional schedules for the required supplementary information section of the financial statements to be the new norm. School districts will also be required to report on their plans on the district-wide statements in the financial statements.
Updated valuations required
You must have a new valuation completed in accordance with the new regulations and the deadlines vary by type of plan. Note that you may use the lookback option and have a valuation date one year prior to the reporting date.
- OPEB plan administered through a trust (fund 73) – completed for fiscal year 2017
- OPEB plan not administered through a trust – completed for fiscal year 2018
Actuary study required for certain pension or stipend plans
If your pension plans are not administered through a trust (often referred to as stipend plans), you must have an actuary study done in accordance with GASB 73. This also affects how your pension liability or asset is included in the financial statements, as well as adds footnote disclosure requirements. This is to be completed for fiscal year 2017.
These standards are incredibly complex and we will continue to update you as more guidance is released. If you have questions about these new financial reporting requirements, please contact your account director or David Minch, CPA, at firstname.lastname@example.org or 920-235-0596.
Need additional guidance? Learn how to implement these new regulations—including successfully communicating changes to the board. Attend Schenck’s upcoming workshop, “Understanding and Implementing the New GASB 74 and 75 Requirements.” Learn more →
David Minch, CPA, manager, is responsible for performing the field work audits for Wisconsin municipalities and school districts. He has also assisted clients with preparing financial statements, submitting Single Audit Data Collect Forms and HUD REAC reporting.