6.2. SR 06-02-2014 - Laserfiche WebLink

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Future Accounting Standard Changes-Continued Statement No.68 requires a state or local government employer(or nonemployer contributing entity in a special funding situation)to recognize a net pension liability measured as of a date(the measurement date)no earlier than the end of its prior fiscal year.If a state or local government employer or nonemployer contributing entity makes a contribution to a defined benefit pension plan between the measurement date of the reported net pension liability and the end of the government's reporting period, Statement No.68 requires that the government recognize its contribution as a deferred outflow of resources.In addition, Statement No.68 requires recognition of deferred outflows of resources and deferred inflows of resources for changes in the net pension liability of a state or local government employer or nonemployer contributing entity that arise from other types of events. At transition to Statement No.68,if it is not practical for an employer or nonemployer contributing entity to determine the amounts of all deferred outflows of resources and deferred inflows of resources related to pensions,paragraph 137 of Statement No.68 required that beginning balances for deferred outflows of resources and deferred inflows of resources not be reported. Consequently,if it is not practical to determine the amounts of all deferred outflows of resources and deferred inflows of resources related to pensions, contributions made after the measurement date of the beginning net pension liability could not have been reported as deferred outflows of resources at transition.This could have resulted in a significant understatement of an employer or nonemployer contributing entity's beginning net position and expense in the initial period of implementation. This Statement amends paragraph 137 of Statement No.68 to require that,at transition,a government recognize a beginning deferred outflow of resources for its pension contributions,if any,made subsequent to the measurement date of the beginning net pension liability. Statement No.68,as amended,continues to require that beginning balances for other deferred outflows of resources and deferred inflows of resources related to pensions be reported at transition only if it is practical to determine all such amounts. The provisions of this Statement are required to be applied simultaneously with the provisions of Statement No.68. How the Changes in This Statement Will Improve Financial Reporting The requirements of this Statement will eliminate the source of a potential significant understatement of restated beginning net position and expense in the first year of implementation of Statement No. 68 in the accrual-basis financial statements of employers and nonemployer contributing entities.This benefit will be achieved without the imposition of significant additional costs. 1 Note.From GASB Pronouncements Summaries.Copyright 2014 by the Financial Accounting Foundation,401 Merritt 7,Norwalk, CT 06856,USA,and is reproduced with permission. x This communication is intended solely for the information and use of City Council,management,and the Minnesota Office of the State Auditor and is not intended and should not be used by anyone other than those specified parties. Our audit would not necessarily disclose all weaknesses in the system because it was based on selected tests of the accounting records and related data. The comments and recommendations in the report are purely constructive in nature,and should be read in this context. If you have any questions or wish to discuss any of the items contained in this letter,please feel free to contact us at your convenience. We wish to thank you for the continued opportunity to be of service and for the courtesy and cooperation extended to us by your staff OL&&�,4 7 �" ABDO,EICK&MEYERS,LLP Minneapolis,Minnesota May 13,2014 People +Process® Going Beyondthe -20- Numbers