For years, school districts have been paying retiree benefits of former employees out of the general fund as bills come due.
Now the independent Governmental Accounting Standards Board has called for districts to account differently for these expenditures.
In the past, the cost of these benefits was recognized on a pay-as-you-go basis. The government board has determined that the non-disclosure of the benefits liability distorts a school district’s financial picture.
Therefore, the agency has adopted a policy requiring disclosure and expensing of retiree benefits on an accrual basis, that is, as the employees earn their benefits.
Therefore, the agency has adopted a policy requiring disclosure and expensing of retiree benefits on an accrual basis, that is, as the employees earn their benefits.