GASB: The Exposure Draft "Accounting for Termination Benefits"
January 11, 2005
On December 10, 2004, the Governmental Accounting Standards Board (GASB) issued an Exposure Draft, “Accounting for Termination Benefits,” that addresses employer accounting guidance when benefits are provided for terminated employees. The employee termination can be voluntary or involuntary, and the benefits include early retirement incentives, severance benefits, and other termination-related benefits.
The Exposure Draft covers recognition, measurement, and disclosure requirements related to termination benefits. In financial statements prepared on the accrual basis of accounting, employers would be required to recognize a liability and expense for voluntary termination benefits when the offer is accepted. A liability and expense for involuntary termination benefits would be recognized when a plan of termination has authorized approval. There are several measurement requirements; for example, health-care-related termination benefits would be measured by projecting claims costs, evaluating health care cost trends, and discounting to present value. Finally, employers would be required to disclose a description of the termination arrangement and the cost of the termination benefit if the cost is not identifiable on the face of the financial statements.
The requirements would be effective for financial statements for periods beginning after June 15, 2005. The deadline for submitting comments to GASB is March 11. NACUBO encourages interested members to submit a written response and welcomes member input for use in our comment letter. NACUBO contact: Sue Menditto, director, accounting policy, 202.861.2542, firstname.lastname@example.org.
- Lawmakers Introduce Bills to Simplify Student Aid
- CFPB Proposes Draft Template for Student Banking Options
- Data on Campus Law Enforcement Released
- 2015 Endowment and Debt Management Forum
February 4-6, 2015
- 2015 Unrelated Business Income Tax
February 25-27, 2015
- ON-DEMAND: How to Build, Develop, and Support a Compliance Program at Your Institution
- ON-DEMAND: Strategic Tuition Assessment and Tuition Restructuring
- ON-DEMAND: Are Shared Services Right for Your Organization – The KU Journey
- ON-DEMAND: VIRTUAL: 2014 Annual Meeting
- ON-DEMAND: VIRTUAL: Student Financial Services Conference
- ON-DEMAND: VIRTUAL: Higher Education Accounting Forum
- A Guide to College and University Budgeting: Foundations for Institutional Effectiveness, 4th ed. - by Larry Goldstein
- NACUBO's Guide to Unitizing Investment Pools - by Mary S. Wheeler
- Managing and Collecting Student Accounts and Loans - by David R. Glezerman and Dennis DeSantis