2006-12-31 Management Letter - Laserfiche WebLink

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City of Centerville May 3, 2007 Page Twenty Future Accounting Standard Changes The following Governmental Accounting Standards Board (GASB) Statements have been issued and may have an impact on future City [mancial statements: GASB Statement No. 43 - Financial Reportingfor Post employment Benefit Plans Other than Pension Plans This statement is effective one year prior to the effective date of Statement No. 45 for the employer or largest participating employer in the benefit plan for multiple-employer plans. According to Statement No. 43, "The objective of this statement is to establish uniform standards of [mancial reporting by State and local governmental entities for other post employment benefit plans (OPEB plans). The term other post employment benefits (OPEB) refers to post employment benefits other than pension benefits and includes (a) post employment healthcare benefits and (b) other types of post employment benefits (for example, life insurance) if provided separately from a pension plan. The term plans, in this context, refers to trust or other funds through which assets are accumulated to [mance OPEB, and benefits are paid as they come due. This statement provides standards for measurement, recognition, and display of the assets, liabilities, and, where applicable, net assets and changes in net assets of such funds and for related disclosures. The requirements of this statement apply whether an OPEB plan is reported as a trust or agency fund or a fiduciary component unit of a participating employer or plan sponsor, or the plan is separately reported by a public employee retirement system (PERS) or other entity that administers the plan." GASB Statement No. 45 - Accounting and Financial Reporting by Employers for Post employment Benefits Other Than Pensions This statement is effective in three phases based on a government's total annual revenues in the first fiscal year ending after June IS, 1999: . Governments that were phase I governments for the purpose of implementation of Statement No. 34 - those with annual revenues of $1 00 million or more - are required to implement this Statement in financial statements for periods beginning after December 15, 2006. . Governments that were phase 2 governments for the purpose of implementation of Statement No. 34 - those with total annual revenues of $10 million or more but less than $100 million - are required to implement this Statement in financial statements for periods beginning after December 15,2007. . Governments that were phase 3 governments for the purpose of implementation of Statement No. 34 - those with total annual revenues of less than $10 million - are required to implement this Statement in financial statements for periods beginning after December 15,2008. Statement No. 45 gives the following summary, "In addition to pensions, many state and local governmental employers provide other post employment benefits (OPEB) as part of the total compensation offered to attract and retain the services of qualified employees. OPEB includes post employment healthcare, as well as other forms of post employment benefits (for example, life insurance) when provided separately from a pension plan. This Statement establishes standards for the measurement, recognition, and display ofOPEB expense/expenditures and related liabilities (assets), note disclosures, and, if applicable, required supplementary information (RSI) in the [mancial reports of state and local governmental employers." 952.835.9090 . Fax 952.835.3261 www.aemcpas.com