Project Pages

Omnibus

Project Description: This project will review and consider solutions for certain issues related to reporting component units, reclassification of goodwill, fair value measurement, and postemployment benefits.

Status:
Final Statement, Omnibus 2017, approved: March 2017
Exposure Draft approved: September 2016
Added to Current Agenda: April 2016

Omnibus—Project Plan

Background:

Reporting Component Units—Blending

The requirement that is referred to as "paragraph 54a of Statement No. 14, The Financial Reporting Entity," states, "For governments engaged only in business-type activities that use a single column for financial statement presentation, a component unit may be blended by consolidating its financial statement data within the single column of the primary government and presenting combining information in the notes to the financial statements." The intent of that amendment was to give business-type governments the choice of either (1) providing the blended component unit information in a separate column or (2) consolidating the data into the single column of the primary government. However, some have interpreted the words “may be blended” as an option to blend any component unit.

Reclassification of Existing Goodwill

Paragraph 39 of Statement No. 69, Government Combinations and Disposals of Government Operations, requires that excess consideration paid in an acquisition (the amount that was previously labeled as “goodwill”) be reported as a deferred outflow of resources. Paragraph 59 of that Statement states that the provisions of the Statement should be applied prospectively. As a result, governments that entered into acquisition transactions prior to the effective date of Statement No. 69 are uncertain about whether (1) the excess consideration paid in those previous acquisitions and recognized as an asset (goodwill) should be reclassified as a deferred outflow of resources or (2) the “goodwill” label related to the old acquisition should remain.

The issue is significant because the reclassification would be from one financial statement element (assets) to another (deferred outflows of resources) and, if not addressed, a single government may report excess consideration given in one acquisition as an asset and in another acquisition as a deferred outflow of resources.

Fair Value Measurement—Multi-Use Assets

Paragraph 48 of Statement No. 10, Accounting and Financial Reporting for Risk Financing and Insurance Issues, as amended, and paragraph 428 of Statement No. 62, Codification of Accounting and Financial Reporting Guidance Contained in Pre-November 30, 1989 FASB and AICPA Pronouncements, as amended, both address the identical issue of real estate used in operations—Statement 10 from the perspective of public entity risk pools and No. Statement 62 from the perspective of insurance entities other than public entity risk pools. Both Statements indicate that the classification of real estate used in insurance entities’ operations depends on the predominant use of that real estate. The guidance implies that a building could be a multi-use or mixed-use asset and could be both an investment and a capital asset at the same time. The following is the requirement as it is presented in paragraph 48 of Statement 10, as amended. The requirement in paragraph 428 of Statement 62, as amended, is similar.

Real estate should be classified either as an investment or as real estate used in the pool's operations, depending on its predominant use. Depreciation and other real estate operating costs should be classified as investment expenses or operating expenses consistent with the statement of net position classification of the related asset. Imputed investment income and rental expense should not be recognized for real estate used in the pool's operations.

The requirements in Statements 10 and 62, as amended, contradict Statement No. 72, Fair Value Measurement and Application, which requires governments (1) to apply the unit of account to determine what is to be recognized and measured and (2) to use the definition of an investment to determine whether an asset should be classified as an investment.

Fair Value Measurement—Money Market Investments and Participating Interest-Earning Investment Contracts

Paragraph 64 of Statement 72 requires that investments should be measured at fair value except for those investments listed in paragraph 69 of that Statement. Paragraph 69 was intended to carry forward from previously issued literature, without modification, certain exceptions to measuring investments at fair value. Paragraph 69c requires the following:

Money market investments and participating interest-earning investment contracts that have a remaining maturity at the time of purchase of one year or less and are held by governments other than external investment pools should be measured at amortized cost as provided in paragraph 9 of Statement 31. [Underscore added for emphasis.]

The requirement in paragraph 69c was intended to carry forward the following requirement in paragraph 9 of Statement No. 31, Accounting and Financial Reporting for Certain Investments and for External Investment Pools:

Governmental entities other than external investment pools may report at amortized cost money market investments and participating interest-earning investment contracts that have a remaining maturity at time of purchase of one year or less, provided that the fair value of those investments is not significantly affected by the impairment of the credit standing of the issuer or by other factors. [Footnotes omitted; underscore added for emphasis.]

The word may in paragraph 9 of Statement 31 indicates a permission for governments to choose amortized cost as the measurement, but it does not require them to do so. However, the use of should in paragraph 69c of Statement 72, despite the qualifier that the requirement is to apply paragraph 9 of Statement 31, implies that the use of amortized cost measurement is a mandatory requirement.

Postemployment Benefits—On-Behalf Payments

Currently, for payments legally required to be made on behalf of an employer by a nonemployer contributing entity, there is no guidance regarding recognition by the employer in financial statements prepared using the current financial resources measurement focus and modified accrual basis of accounting. Additionally, for on-behalf payments that are not legally required, existing guidance could be interpreted to mean that those on-behalf payments should not be recognized by the employer in financial statements prepared using the current financial resources measurement focus.

The staff has received technical inquiries during the implementation of Statement No. 68, Accounting and Financial Reporting for Pensions, about the appropriate employer accounting and financial reporting for various forms of on-behalf payments for pensions in statements prepared on the modified accrual basis of accounting. In the past, requirements for recognition of on-behalf payments by employers in financial statements prepared using the current financial resources measurement focus were included in Statement No. 24, Accounting and Financial Reporting for Certain Grants and Other Financial Assistance.

In the Basis for Conclusions of Statement 68 (paragraph 357), the Board states, “The project leading to this Statement did not reexamine or reconsider the requirements of Statement 24, generally, and, therefore, this Statement incorporates the requirements of Statement 24, with modifications only to reflect changes in the overall accounting framework applied to pensions.” Consistent with that sentence, it appears that the intent was to retain the requirements in Statement 24 for modified accrual recognition for all on-behalf payments related to postemployment benefit contributions (or for postemployment benefits as the benefits come due). However, neither Statement 68 nor the Codification Instructions in that Statement are clear regarding the expectation that that the approach required Statement 24 would continue to be applied in financial statements prepared using the current financial resources measurement focus. Statements No. 73, Accounting and Financial Reporting for Pensions and Related Assets That Are Not within the Scope of GASB Statement 68, and Amendments to Certain Provisions of GASB Statements 67 and 68, and No. 75, Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions, will have similar effects and, once implemented, there will be a resultant lack of guidance on this topic for all postemployment benefits.

Postemployment Benefits—Employees Provided with OPEB through Certain Multiple-Employer Defined Benefit OPEB Plans

This issue regarding OPEB provided through certain multiple-employer defined benefit OPEB plans is parallel to the issue the Board recently addressed in Statement No. 78, Pensions Provided through Certain Multiple-Employer Defined Benefit Pension Plans. Statement 78 provides an exception to the application of Statement 68 for employers that provide pensions through pension plans that have specific characteristics (such as Taft-Hartley plans or plans with similar characteristics) that prevent the application of the cost-sharing employer requirements of Statement 68.

As indicated in paragraph 6 of Statement 75, the requirements of that Statement apply to all state and local governmental employers whose employees are provided with OPEB. There is no exception for employers reporting OPEB in circumstances that are similar to those addressed in Statement 78 relative to pensions. In those circumstances, obtaining the measurements and information required by Statement 75 might not be feasible due to the relationship between the employers and the plan. The nature of a government’s involvement as an employer in the arrangement might prevent coordination with the plan, especially because these types of plans generally are not established specifically for the employees of that government.

Postemployment Benefits—Payroll-Related Measures

Statement No. 82, Pension Issues, amended Statements No. 67, Financial Reporting for Pension Plans, and 68 to replace measures of covered-employee payroll (defined as the payroll of employees that are provided with pensions through the pension plan) with measures of covered payroll (defined as the payroll on which contributions to a pension plan are based). During the due process that led to Statement 82, some stakeholders (1) questioned the measure required by Statements 73, No. 74, Financial Reporting for Postemployment Benefit Plans Other Than Pension Plans, and 75 to be presented in required supplementary information or (2) requested that the payroll measure required by those Statements be reconsidered.

Paragraphs 45 and 66 of Statement 73, paragraph 36 of Statement 74, and paragraphs 57, 97, 170, and 191 of Statement 75 require a measure of covered-employee payroll and related ratios to be presented in required supplementary information. Whereas Statement 73 defines covered-employee payroll as the payroll of employees that are provided with pensions through the pension plan, Statements 74 and 75 define covered-employee payroll as the payroll of employees that are provided with OPEB through the OPEB plan.

With respect to Statements 67 and 68, stakeholders raised issues regarding the availability of covered-employee payroll for pension plans. The same issues would exist for OPEB plans with regard to obtaining a measure of covered-employee payroll. It also should be noted that, as a result of Statement 82, pension plans that are administered through trusts that meet the specified criteria and governments that provide pensions through such plans are required to present covered payroll. The requirements for governments that provide pensions through plans that are not administered through a trust that meets the specified criteria, OPEB plans, and employers that provide OPEB were unchanged by Statement 82 and, therefore, those entities are required to present covered-employee payroll.

Postemployment Benefits—Employer-Paid Member Contributions for OPEB

Statement 82 clarifies that payments that are made by employers to satisfy contribution requirements identified by plan terms as employee contribution requirements should be classified as plan member contributions for purposes of Statement 67 and employee contributions for purposes of Statement 68. The text in footnote 2 of Statement 74 and footnote 2 of 75 requires that classification of such contributions by OPEB plans and employers be dependent on the expense classification of those amounts. Therefore, as a result of the requirements of Statement 82, employer-paid member contributions for pensions potentially would be treated differently than employer-paid member contributions for OPEB.

Postemployment Benefits—Timing of the Measurement of Postemployment Benefit Liabilities and Related Expenditures in Financial Statements Prepared Using the Current Financial Resources Measurement Focus

Postemployment benefit liabilities and related expenditures recognized in financial statements prepared using the current financial resources measurement focus should be measured for the same period. However, currently there is conflicting guidance as to whether that period should be the reporting period or the measurement period.

Postemployment Benefits—Alternative Measurement Method for OPEB

For purposes of measurement of the total OPEB liability in conformity with the requirements of Statements 74 and 75, an alternative measurement method is permitted (in place of an actuarial valuation) if fewer than 100 employees (active and inactive) are provided with benefits through the OPEB plan as of the beginning of the measurement period. The alternative measurement method specifies certain modifications that can be incorporated into the measurement of the total OPEB liability. Two issues have been identified with regard to modifications that are permitted under the alternative measurement method.

The first issue relates to the assumption for the expected point in time at which an employee will exit from active service. The alternative measurement method requirements in Statements 74 and 75 permit the assumption for the expected point in time at which benefit payments will begin to be made to incorporate a single assumed age; however, there is no similar modification permitted for the assumption related to the expected point in time at which an employee will exit from active service. Without modification, application of the attribution method required by Statement 75 would require service costs to be attributed through all assumed ages of exit from active service. Additionally, the turnover-related simplifications for the alternative measurement method are written from the perspective that the expected point in time at which an employee becomes eligible for benefits and the expected point in time at which benefit payments will begin to be made are the same. Clarifications are needed for circumstances in which those points in time are not the same.

The second issue relates to inconsistencies in expense recognition if the alternative measurement method is used. If the alternative measurement method is used, Statement 75 permits all changes in the collective total OPEB liability (including differences between expected an actual experience and changes of assumptions) to be recognized in the period in which the change is incurred. However, Statement 75 does not incorporate modifications to permit changes resulting from an individual employer’s change in proportion or differences between actual contributions and an employer’s proportionate share of contributions to be recognized in the period in which the change incurred. Therefore, Statement 75 requires an employer’s individual changes to be recognized over the average of the expected remaining service lives of all employees that are provided with OPEB through the OPEB plan whereas all other changes in the total OPEB liability are recognized in the period in which the change is incurred.

Accounting and Financial Reporting Issues: The project addresses a diverse set of issues:

  1. With respect to requirements for blending component units, Statement No. 61, The Financial Reporting Entity: Omnibus, amended paragraph 54 of Statement No. 14, The Financial Reporting Entity. This amendment provides an option for single-column business-type activities to consolidate component units that meet the criteria for blending. Some have interpreted that provision to apply to any component unit, rather than only those component units that meet a criterion for blending in paragraph 53 of Statement 14, as amended.
  2. The transition provision in Statement No. 69, Government Combinations and Disposals of Government Operation, to apply requirements of the Statement prospectively has prompted several inquiries about whether to reclassify amounts previously reported as goodwill as deferred outflows of resources.
  3. Requirements in Statements No. 10, Accounting and Financial Reporting for Risk Financing and Related Insurance Issues, as amended, and No. 62, Codification of Accounting and Financial Reporting Guidance Contained in Pre-November 30, 1989 FASB and AICPA Pronouncements, as amended, for classification of real estate held for both operations and investment purposes by insurance entities conflict with requirements in Statement No. 72, Fair Value Measurement and Application, for classification of multi-use assets.
  4. Requirements in Statement 72 that refer to requirements in Statement No. 31, Accounting and Financial Reporting for Certain Investments and for External Investment Pools, state that certain money market investments and participating interest earning investment contracts should (rather than may) be measured at amortized cost.
  5. Clarification is needed regarding recognition in employer financial statements prepared using the current financial resources measurement focus and modified accrual basis of accounting of on-behalf payments for contributions (or benefit payments as they come due) made by a nonemployer contributing entity to pension or other postemployment benefit (OPEB) plans.
  6. Guidance is needed related to the applicability of Statement No. 75, Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions, for employers whose employees are provided with OPEB through multiple-employer defined benefit OPEB plans that have characteristics similar to those identified in Statement No. 78, Pensions Provided through Certain Multiple-Employer Defined Benefit Pension Plans (such as Taft-Hartley plans or plans with similar characteristics).
  7. Questions have been raised regarding the presentation of payroll-related measures in required supplementary information for OPEB plans, employers that provide OPEB, and employers that provide pensions through plans that are not administered through a trust that meets the specified criteria.
  8. Stakeholders have questioned whether modifications are needed to Statement No. 74, Financial Reporting for Postemployment Benefit Plans Other Than Pension Plans, and Statement 75 to address the classification of employer-paid member contributions for OPEB.
  9. Clarification is needed regarding the timing of the measurement of pension or OPEB liabilities and related expenditures recognized in financial statements prepared using the current financial resources measurement focus.
  10. With regard to the alternative measurement method in Statements 74 and 75, certain clarifications are needed regarding (1) expense recognition for an individual entity’s changes in proportion and differences between the entity’s actual contributions and its proportionate share of contributions, (2) modifications for the assumption about a plan member’s (employee’s) expected point in time of exit from active service, and (3) modifications for the assumption about the probability that a plan member (employee) will remain employed until the point in time at which the plan member (employee) qualifies to receive benefits.
Project History:
  • Added to current technical agenda: April 2016
  • Deliberations began: May 2016
  • Exposure Draft issued: September 2016
  • Comment period: September–November 2016
  • Redeliberations began: January 2017
  • Final Statement issued: March 2017


Omnibus—Recent Minutes


Minutes of Meetings, March 7–9, 2017

The Board reviewed the ballot draft of a final Statement, Omnibus 2017, and provided clarifying edits. The Board then voted unanimously to approve the issuance of Statement No. 85, Omnibus 2017.

Minutes of Teleconference, February 6, 2017

The Board reviewed a preballot draft of the final Statement, Omnibus 2017, and provided clarifying edits on the draft document. The Board then agreed to move forward with a ballot draft of the final Statement.

Minutes of Meetings, January 17–19, 2017

The Board began redeliberations with issues related to blending component units. The Board tentatively decided to carry forward to the final Statement the provision that clarifies that a primary government that is a business-type activity and uses a single column for financial statement presentation should blend a component unit only to the extent that it meets a criterion for blending in paragraph 53 of Statement No. 14, The Financial Reporting Entity, as amended.

The Board then discussed the requirements regarding the reporting of goodwill and “negative” goodwill resulting from acquisitions that occurred prior to the effective date of Statement No. 69, Government Combinations and Disposals of Government Operations. The Board tentatively decided to carry forward to the final Statement the requirements regarding existing goodwill and negative goodwill.

The Board next tentatively agreed to carry forward to the final Statement the provisions to amend paragraph 48 of Statement No. 10, Accounting and Financial Reporting for Risk Financing and Insurance Issues, and paragraph 428 of Statement No. 62, Codification of Accounting and Financial Reporting Guidance Contained in Pre-November 30, 1989 FASB and AICPA Pronouncements, to require that each unit of account of real estate be classified as an investment or a capital asset used in operations, depending on whether the unit of account meets the definition of an investment. To clarify the point as of when the determination of an asset’s purpose should be made, the Board tentatively decided to modify the reference in paragraph 6 of the Exposure Draft to generally reference Statement No. 72, Fair Value Measurement and Application. The Board also tentatively agreed that the transition provisions of the final Statement should indicate that, for real estate held by insurance entities that was acquired prior to the effective date of this Statement, the purpose of the real estate should be determined as of implementation of this Statement. Next, the Board tentatively decided that the requirements that clarify that certain money market investments and participating interest-earning investment contracts may be measured at amortized cost in certain circumstances should be carried forward to the final Statement.

The Board next discussed issues related to postemployment benefits (pensions and other postemployment benefits [OPEB]). The Board tentatively agreed that the provisions that require that pension and OPEB liabilities and expenditures that are recognized in financial statements prepared using the current financial resources measurement focus be measured relative to the reporting period (as opposed to the measurement period) should be carried forward to the final Statement.

Next, the Board tentatively agreed to carry forward to the final Statement the requirements in paragraphs 9–12 of the Exposure Draft regarding the accounting and reporting for on-behalf payments for pensions or OPEB in employer financial statements.

The Board then discussed the presentation of payroll-related measures in required supplementary information for purposes of Statements No. 74, Financial Reporting for Postemployment Benefit Plans Other Than Pension Plans, and No. 75, Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions. For purposes of Statement 74, the Board tentatively decided to carry forward to the final Statement the requirements to amend Statement 74 to require OPEB plans to present covered payroll, if applicable; otherwise, no measure should be presented. For purposes of Statement 75, the Board tentatively decided to carry forward to the final Statement the requirements to amend Statement 75 to require employers to present covered payroll, if contributions are based on a measure of pay; otherwise, covered-employee payroll should be presented.

The Board tentatively agreed to carry forward to the final Statement the provisions regarding employers that provide OPEB through cost-sharing defined benefit OPEB plans that have the characteristics described in paragraph 18 of the Exposure Draft.

The Board tentatively agreed to carry forward to the final Statement provisions that require employer-paid member contributions for OPEB (as identified in OPEB plan terms) to be classified as plan member (employee) contributions.
The Board tentatively agreed to carry forward requirements that clarify certain aspects of the alternative measurement method, including, if the alternative measurement method is applied, (a) specific modifications that may be incorporated into the measurement of the total OPEB liability and (b) recognition of an employer’s change in proportion or difference between actual and proportionate share of contributions in expense in the current reporting period.

The Board also tentatively agreed that the scope of the Statement should not be expanded at this time to address additional postemployment benefit issues raised by respondents.

The Board discussed provisions related to effective date and transition. The Board tentatively decided to carry forward that the requirements be effective for reporting periods beginning after June 15, 2017, with earlier application encouraged. The Board also tentatively agreed that early application by topic (rather than implementation of all requirements at the same time if early application is elected) should be permitted. Regarding transition, the Board tentatively decided to carry forward the provisions that the requirements be applied retroactively by restating financial statements, if practicable, for all prior periods presented. If restatement for prior periods is not practicable, the cumulative effect, if any, of applying the requirements should be reported as a restatement of beginning net position (or fund balance or fund net position, as applicable) for the earliest period restated. In the first period that the requirements are applied, the notes to the financial statements should disclose the nature of the restatement and its effect. Also, the reason for not restating prior periods presented should be disclosed.

The Board continued redeliberations with considerations related to benefits and costs. The Board tentatively agreed that the perceived costs of implementation of these provisions are justified when compared to the expected benefits of the final Statement.

Minutes of Meetings, September 13–15, 2016

The Board discussed issues regarding the applicability of paragraphs 9–12 of Statement No. 24, Accounting and Financial Reporting for Certain Grants and Other Financial Assistance, as amended, to on-behalf payments for pensions or other postemployment benefits (OPEB). The Board tentatively decided to propose that paragraphs 9–12 of Statement 24, as amended, be limited to apply only to on-behalf payments for salaries and fringe benefits other than pensions or OPEB.

The Board reviewed a ballot draft of the proposed Exposure Draft, Omnibus 201X, and provided clarifying edits on the draft document. The Board then voted unanimously to approve the issuance of the Exposure Draft.

Minutes of Meetings, August 10–12, 2016

The Board discussed issues regarding the application of the alternative measurement method for other postemployment benefits (OPEB). The Board tentatively decided to propose that for purposes of applying the alternative measurement method, assumptions related to (1) the expected point in time at which the plan member (employee) will exit from active service and (2) the assumed probability that an active plan member (employee) will remain employed until the assumed age at which the plan member (employee) is expected to be eligible to receive benefits be permitted to incorporate the modifications that are permitted, respectively, for (a) the expected point in time at which benefit payments will begin to be made and (b) the assumed probability that an active plan member (employee) will remain employed until the assumed age at which benefit payments will begin to be made.

The Board also tentatively decided to propose that if the alternative measurement method is used to measure the OPEB liability, changes in the OPEB liability resulting from (1) changes in proportion and (2) differences between actual contributions (or amounts paid for OPEB as the benefits come due) and proportionate share of contributions (or amounts paid for OPEB as the benefits come due) be recognized in expense in the current reporting period.

The Board reviewed a preballot draft of the proposed Exposure Draft, Omnibus, and provided clarifying edits on the draft document, including a revision of the title. The Board then agreed to move forward with a ballot draft of a proposed Statement, Omnibus 201x.

Minutes of Meetings, June 22–23, 2016

The Board first discussed issues related to Statement No. 72, Fair Value Measurement and Application. The Board discussed requirements for the classification of real estate assets held for operations and investment purposes by insurance entities in Statements No. 10, Accounting and Financial Reporting for Risk Financing and Related Insurance Issues, and No. 62, Codification of Accounting and Financial Reporting Guidance Contained in Pre-November 30, 1989 FASB and AICPA Pronouncements. The Board tentatively decided to propose to amend paragraph 48 of Statement 10, as amended, to clarify that each unit of account of real estate should be classified as an investment or a capital asset used in the pool’s operations, depending on whether the unit of account meets the definition of an investment. The Board also tentatively decided to propose that similar amendments be made to paragraph 428 of Statement 62, as amended.

The Board then discussed the language used in Statement 72 to describe the measurement of certain money market investments and participating interest-earning investment contracts, for which requirements are included in Statement No. 31, Accounting and Financial Reporting for Certain Investments and for External Investment Pools. The Board tentatively decided to propose an amendment to paragraph 69c of Statement 72 which would clarify that those money market investments and participating interest-earning investment contracts may be measured, but are not required to be measured, at amortized cost.
The Board then discussed the presentation of payroll-related measures in required supplementary information for purposes of Statements No. 73, Accounting and Financial Reporting for Pensions and Related Assets That Are Not within the Scope of GASB Statement 68, and Amendments to Certain Provisions of GASB Statements 67 and 68, No. 74, Financial Reporting for Postemployment Benefit Plans Other Than Pension Plans, and No. 75, Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions. For purposes of Statement 74, the Board tentatively decided to propose that OPEB plans present covered payroll, if applicable; otherwise no measure should be presented. For purposes of Statements 73 and 75, the Board tentatively decided to propose that (1) for OPEB provided through plans that are administered through trusts that meet the specified criteria, employers should present covered payroll, if applicable, otherwise covered-employee payroll should be presented and (2) for OPEB or pensions provided through plans that are not administered through trusts that meet the specified criteria, employers should present covered-employee payroll.

The Board then discussed issues related to recognition and measurement of on-behalf payments for postemployment benefits in financial statements prepared using the current financial resources measurement focus. The Board tentatively decided to propose to a clarification that in financial statements prepared using the current financial resources measurement focus, employers would continue to recognize expenditures for on-behalf payments made by a nonemployer contributing entity for contributions that are assessed for the reporting period (or for benefit payments that come due during the reporting period) and revenue for the support provided by the nonemployer contributing entity.

The Board also discussed issues related to the timing of the measurement of pension and OPEB liabilities and related expenditures recognized in financial statements prepared using the current financial resources measurement focus. The Board tentatively decided to propose to clarify that in financial statements prepared using the current financial resources measurement focus, pension and OPEB liabilities and related expenditures should be determined for the reporting period, rather than for the measurement period.

The Board then discussed considerations related to expected benefits and perceived costs associated with the requirements to be proposed in an Exposure Draft. The Board tentatively decided that the expected benefits associated with the requirements to be proposed in an Exposure Draft outweigh the perceived costs.

The Board discussed provisions related to effective date and transition. The Board tentatively decided to propose that the proposed requirements be effective for reporting periods beginning after June 15, 2017, with earlier application encouraged. Regarding transition, the Board tentatively decided to propose that the proposed requirements be applied retroactively by restating financial statements, if practicable, for all prior periods presented.

Minutes of Meetings, May 10–11, 2016

The Board discussed whether clarifications should be made to the requirement that is referred to as “paragraph 54a of Statement No. 14, The Financial Reporting Entity,” that addresses blending a component unit in circumstances in which the primary government is a business-type activity that reports in a single column. The Board tentatively decided to propose to clarify that those provisions apply only to a component unit that meets a criterion for blending in paragraph 53 of Statement 14.

The Board then discussed an issue regarding amounts reported as goodwill resulting from acquisition transactions prior to the effective date of Statement No. 69, Government Combinations and Disposals of Government Operations. The Board tentatively decided to propose that the amounts reported as goodwill be reclassified as a deferred outflow of resources and recognized in expense in accordance with paragraph 39 of Statement 69. Also, the Board tentatively agreed to address the issue of negative goodwill in this project and tentatively decided to propose that any existing negative goodwill be eliminated as part of the restatement to beginning net position in the period the proposed Statement becomes effective.

The Board discussed issues regarding the applicability of Statement No. 75, Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions, for OPEB provided through a cost-sharing defined benefit OPEB plan that (a) is not a state or local governmental OPEB plan, (b) is used to provide defined benefit OPEB both to employees of state or local governmental employers and to employees of employers that are not state or local governmental employers, and (c) has no predominant state or local governmental employer (either individually or collectively with other state or local governmental employers that provide OPEB through the OPEB plan). The Board tentatively decided that requirements similar to those in Statement No. 78, Pensions Provided through Certain Multiple-Employer Defined Benefit Pension Plans, should be proposed for employers that have employees that are provided with OPEB through cost-sharing defined benefit OPEB plans that have all of the specified characteristics described above.

The Board then discussed whether the requirements in Statement No. 74, Financial Reporting for Postemployment Benefit Plans Other Than Pension Plans, and Statement 75 regarding employer-paid member contributions should be amended to be consistent with similar requirements in Statements No. 67, Financial Reporting for Pension Plans, and No. 68, Accounting and Financial Reporting for Pensions, as amended. The Board tentatively decided to propose to amend the requirements in Statements 74 and 75 regarding employer-paid member contributions to be consistent with the requirements in Statements 67 and 68, as amended. Statements 67 and 68, as amended, require that (a) contribution requirements designated by plan terms as plan member contribution requirements be classified as plan member contributions for purposes of plan reporting and as employee contributions for purposes of employer reporting and (b) an employer’s expense and expenditures for those amounts be recognized in the period for which the contribution is assessed and classified in the same manner as the employer classifies similar compensation other than pensions.

Omnibus—Tentative Board Decisions to Date


Statement No. 85, Omnibus 2017 , was approved in March 2017.