GASB changes might unbalance university balance sheets
- New guidelines proposed by the Governmental Accounting Standards Board and set to take effect in 2015 would require the 75% of institutions that take part in state pensions plans to list their share of the state's pension liability on their balance sheets, potentially placing a major negative on the books that university officials say they aren't legally responsible for nor able to repay on their own.
- Such a negative could potentially endanger credit ratings, state support, federal financial aid qualification, and accreditation.
- The policy change's exact effects are difficult to predict, as the GASB's new rules have yet to be finalized and pension plans vary widely from state to state.
From the article:
A set of changes proposed by the Governmental Accounting Standards Board, a nonprofit group that sets guidelines for how states, local governments, and entities such as public colleges and universities report finances, is about to unbalance countless balance sheets. The new guidelines, announced in June and set to take effect in the 2015 fiscal year, are designed to highlight how much state governments -- and governmental agencies -- owe in pension expenses and force policy makers to confront these costs. The change focuses on defined-contribution benefit plans. ...
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