ERMUSR FINIANCIALS 04-17-2008 - Laserfiche WebLink

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Ells River Municipal Utilities Apri17, 2008 Page 11 GASB Statement No. 47 -Accounting for Termination Benefits In general, Statement No. 47 is effective for fmancial statements for periods beginning after June 15, 2005. However, for termination benefits that affect defined benefit postemployment benefits other than pensions, governments should implement Statement 47 simultaneously with Statement No. 45, Accounting and Financial Reporting by Employers for Postemployment Benefits Other Than Pensions. The Statement provides accounting and reporting guidance for state and local governments that offer benefits such as early retirement incentives or severance to employees that are involuntarily terminated. The Statement requires that similar forms of termination benefits be accounted for in the same manner and is intended to enhance both the consistency of reporting for termination benefits and the comparability of financial statements. GASB Statement No. 48 -Sales and Pledges of Receivables and Future Revenues and Intra-Entity Transfers of Assets and Future Revenues This statement was issued September 2006 and is effective for periods beginning after December 15, 2006. Therefore, this statement has been implemented for the current fmancial statements. This standard provides accounting guidance for when certain transactions-such as the sale of delinquent taxes, certain mortgages, student loans, or future revenues such as those arising from tobacco settlement agreements-should be regarded as a sale or a collateralized borrowing. The fmancial reporting question addressed in Statement No. 48 is whether such transactions should be reported as a sale or collateralized borrowing. In addition to clarifying guidance on accounting for sales and pledges of receivables and future revenues, Statement No. 48 (1) requires enhanced disclosures pertaining to future revenues that have been pledged or sold; (2) provides guidance on the sales of receivables and future revenues within the same fmancial reporting entity; and (3) provides guidance on recognizing other assets and liabilities arising from the sale of specific receivables or future revenues. GASB Statement No. 49 -Accounting and Financial Reporting for Pollution Remediation Obligations This statement was issued November 2007 and is effective for periods beginning after December 15, 2007, but liabilities should be measured at the beginning of that period so that beginning net assets can be restated. This standard is intended to ensure that certain cost and long-term obligations related to pollution clean up not specifically addressed by current governmental accounting standards will be included in fmancial reports. The standards set forth the key circumstances under which a government would be required to report a liability related to pollution remediation. A government would have to determine whether one or more components of a pollution remediation liability are recognizable if any of the following five obligating events or triggers occurs: • A government is compelled to take remediation action because pollution creates an imminent endangerment to the public health or welfare or environment, leaving it little or no discretion to avoid remediation action. • A government is in violation of a pollution prevention-related permit or license. • The government is named, or evidence indicates it will be named, by a regulator that has identified the government as a responsible parry or potentially responsible party for remediation, or as a government responsible for sharing costs. • A government is named, or evidence indicates that it will be named, in a lawsuit to compel the government to participate in remediation. • A government commences or legally obligates itself to commence clean up activities or monitoring or operation and maintenance of the remediation effort. 952.835.9090 Fax 952.835.3261 www.aemcpas.com