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Monday, October 27, 2008

FASAB Issues New Statement of Federal Financial Accounting

The Federal Accounting Standards Advisory Board (FASAB) has issued Statement of Federal Financial Accounting Standards (SFFAS) 33, Pensions, Other Retirement Benefits, and Other Post-employment benefits: Reporting Gains and Losses from Changes in Assumptions and Selecting Discount Rates and Valuation Dates. The standards in SFFAS 33 require:
  • Gains and losses from changes in long-term assumptions used to estimate liabilities for federal employee pension and other retirement benefits, and other post-employment benefits to be displayed as discrete line items on the governmentwide entity's and the component entities' statements of net cost; and
  • Components of the expense associated with such liabilities to be disclosed in notes to the financial statements. SFFAS 33 also provides standards for selecting the discount rate assumption and the valuation date for such liabilities.
Practices have varied regarding the discount rate for such liabilities and SFFAS 33 establishes one consistent approach for such rates for these liabilities The standards prescribed in SFFAS 33 are effective for periods beginning after Sept. 30, 2009. The statement is available on the FASAB website.

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