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GASB 68 & 71 Implementation and Other Accounting Topics


  • Two Governmental Accounting Standards Board (GASB) Statements effective for fiscal year ending June 30, 2015; and,
  • Other Accounting Topics


As we begin the new fiscal year, McAbee, Schwartz, Halliday & Co. GASB 68wanted to take a moment to discuss a topic which has been heavily publicized over the past year in regards to the new GASB Pension accounting.  This is a very broad, high-level overview of the two new pronouncements. If you have any more questions that are not answered, please let us know and we would be more than happy to discuss the new pronouncements with you.

GASB Statements

GASB Statement 68 – Effective June 30, 2015

GASB 68 is the newest Governmental Accounting Standards Board pronouncement to be issued and made effective.  Effective for fiscal years beginning after June 15, 2014, this change will affect all counties’ June 30, 2015 financial statements.

GASB 68 – “Accounting and Financial Reporting for Pension – An Amendment of GASB Statement No. 27”

GASB 68’s primary objective will be to improve the accounting and financial reporting of pension liabilities on the financial statements of local governments.  This statement will require that each county that participates in a pension plan administered through trusts (i.e., the South Carolina Retirement System and/or the Police Officers’ Retirement System) place their portion of the net pension liability as well as their total deferred outflows and deferred inflows of resources on the financial statements.  The purpose for this change, according to GASB, is to improve the way state and local governments report pension liabilities and expenses so that there is a more realistic representation of the complete impact of pension obligations, to improve the decision-usefulness of the reported information and to increase transparency, consistency and comparability of pension information across governmental units.

This adjustment will be part of the government-wide journal entries used when transitioning from the fund financial statements to the government-wide financial statements.  Because this will be a cumulative change in accounting principle, it will restate your beginning (July 1, 2014) net position.  This is NOT the result of an error (prior-period adjustment) in financial reporting, but a change in accounting principle.

As many of you have discovered over the past year, PEBA has been gathering the necessary information to create their reporting packet for this requirement.  Many of you received various requests for information and surveys to fill out.  All of that information went into the information PEBA has provided auditors.  PEBA has provided audited schedules to show each county’s proportional share of all parts of the newly required reporting.  There should not be a need for the county to gather any additional information to meet this new requirement.

Financial Statement Impact

Unfortunately, each county will feel a different level of impact on their financial statements from GASB 68 since it is based off of the entity’s proportional share of the total liability, as calculated by PEBA.  We are more than happy to discuss the level of impact on your particular entity with you individually at any point in time.

One major thing to keep in mind and remember is that it will only affect the government-wide financial statements and not your fund financial statements.  This will strictly affect your Total Net Position on your Statement of Net Position and your Statement of Activities with the net effect shown through the corresponding reconciliations to the fund financial statements.

 GASB Statement 71 – Effective June 30, 2015

GASB Statement No. 71 is an amendment to GASB 68.  The purpose is to note that any contributions made after the measurement date of the plan and within the fiscal year under audit are to be recorded as deferred outflows of resources added to the deferred outflows of resources from the specified plan.  This will be implemented in the same manner as GASB 68 and you will see the same financial statement effect.  GASB 71 will be implemented because the measurement date of the PEBA plan is July 1, 2013 to June 30, 2014 (this period is allowed for measurement by GASB) but it does not coincide with the fiscal year.  This is a minor addition to the more significant GASB 68.

Financial Statement Impact

GASB 71 will work in conjunction with GASB 68 to record the proper retirement and pension expenses to the financial statements. Any contributions which are made after the measurement date and before the end of the fiscal year will be recorded as a deferred outflow of resources instead of an expenditure.  This is to match the contributions to the measurement year which they apply. 

Other Accounting Topics

Additional Accounting Assistance

McAbee, Schwartz, Halliday & Co. is here to serve you.  Although many of you know of our auditing services, we provide many other services in addition to our auditing services.  Whether you need help with substantial accounting changes or if you have areas of your county that you would like a more in-depth, comprehensive review of the financial information, we are here to help you.  Let us know if we can help in any way possible; we would love the ability to help you make your county’s financial system run at the top of its level of potential.


For any questions please feel free to call or email us:

Q. Stan Halliday, CPA          Partner                   SHalliday@mshcpa.com

H. Eddie McAbee, CPA        Partner                   EMcAbee@mshcpa.com

Emmett Halliday, CPA        Senior Manager        EHalliday@mshcpa.com

Quincy Halliday, CPA          Lead Auditor            QHalliday@mshcpa.com

Office (864) 583-0886                                             Toll Free (800) 788-3193

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