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Future Accounting Standard Changes-Continued <br /> GASB Statement No.70-Accounting and Financial Reporting for Nonexchnage Financial Guarantees <br /> Summary <br /> Some governments extend financial guarantees for the obligations of another government,a not-for-profit organization,a private <br /> entity,or individual without directly receiving equal or approximately equal value in exchange(a nonexchange transaction).As a <br /> part of this nonexchange financial guarantee,a government commits to indemnify the holder of the obligation if the entity or <br /> individual that issued the obligation does not fulfill its payment requirements.Also,some governments issue obligations that are <br /> guaranteed by other entities in a nonexchange transaction. The objective of this Statement is to improve accounting and financial <br /> reporting by state and local governments that extend and receive nonexchange financial guarantees. <br /> This Statement requires a government that extends a nonexchange financial guarantee to recognize a liability when qualitative <br /> factors and historical data,if any, indicate that it is more likely than not that the government will be required to make a payment <br /> on the guarantee. The amount of the liability to be recognized should be the discounted present value of the best estimate of the <br /> future outflows expected to be incurred as a result of the guarantee. When there is no best estimate but a range of the estimated <br /> future outflows can be established,the amount of the liability to be recognized should be the discounted present value of the <br /> minimum amount within the range. <br /> This Statement requires a government that has issued an obligation guaranteed in a nonexchange transaction to report the <br /> obligation until legally released as an obligor.This Statement also requires a government that is required to repay a guarantor for <br /> making a payment on a guaranteed obligation or legally assuming the guaranteed obligation to continue to recognize a liability <br /> until legally released as an obligor. When a government is released as an obligor,the government should recognize revenue as a <br /> result of being relieved of the obligation. This Statement also provides additional guidance for intra-entity nonexchange financial <br /> guarantees involving blended component units. <br /> This Statement specifies the information required to be disclosed by governments that extend nonexchange financial guarantees. <br /> In addition,this Statement requires new information to be disclosed by governments that receive nonexchange financial <br /> guarantees. <br /> The provisions of this Statement are effective for reporting periods beginning after June 15,2013. Earlier application is <br /> encouraged. Except for disclosures related to cumulative amounts paid or received in relation to a nonexchange financial <br /> guarantee,the provisions of this Statement are required to be applied retroactively. Disclosures related to cumulative amounts <br /> paid or received in relation to a nonexchange financial guarantee may be applied prospectively. <br /> How the Changes in This Statement Will Improve Financial Reporting <br /> The requirements of this Statement will enhance comparability of financial statements among governments by requiring <br /> consistent reporting by those governments that extend nonexchange financial guarantees and by those governments that receive <br /> nonexchange financial guarantees.This Statement also will enhance the information disclosed about a government's obligations <br /> and risk exposure from extending nonexchange financial guarantees. This Statement also will augment the ability of financial <br /> statement users to assess the probability that governments will repay obligation holders by requiring disclosures about obligations <br /> that are issued with this type of financial guarantee. <br /> GASB Statement No.71 -Pension Transition for Contributions Made Subsequent to the Measure Date-an Amendment of <br /> GASB Statement No. 68 <br /> Summary <br /> The objective of this Statement is to address an issue regarding application of the transition provisions of Statement No. 68, <br /> Accounting and Financial Reporting for Pensions.The issue relates to amounts associated with contributions, if any,made by a <br /> state or local government employer or nonemployer contributing entity to a defined benefit pension plan after the measurement <br /> date of the government's beginning net pension liability. <br /> People <br /> +Process. <br /> (,uill1. <br /> lit•vontlmr <br /> Nuollmm <br /> 50 <br />