Today we will take a closer look at GASB Statement 84. For the first two parts of this look at GASB & LOSAP, click here.
Here is what you need to know about GASB Statement 84:
- GASB 84 is effective for fiscal years beginning after December 15, 2019.
- The OSC has implemented GASB 84 in the AUD for all fiscal years ending on/after December 31, 2020.
- Essentially, the interpretation of GASB 84 by the OSC is that municipalities should be reporting the LOSAP assets with the governmental funds. The only exception would be reporting any LOSAP assets that have been contributed by another municipality. This exception is a rare circumstance and does not apply to the majority of municipalities.
- This change in accounting and financial reporting does not require additional actuarial calculations.
- Since LOSAP assets are generally now considered governmental funds, we expect they should be reconciled similarly. This implies balancing the LOSAP trust on a periodic basis, accounting for changes in the value of the trust. Changes include contributions, interest earned, benefits paid, and change in market value of any securities.
- The reconciliation of the LOSAP assets should likely be included on a monthly treasurer’s report to the Board.
- If a local government is not receiving period statements (preferably monthly, but minimally quarterly) or a payment register to reconcile benefits paid from the Trust, speak to your vendor(s) to ensure this information is received.
- The OSC has issued implementation guidance, but we expect more support to come as treasurers, comptrollers, and accountants wrestle with some of the intricacies of the Statement. Specifically, how to report a future LOSAP payable or future LOSAP amounts earmarked, but not yet payable.