To: The Administrator Addressed
Date: September 14, 2015
Subject: Governmental Accounting Standards Board (GASB) Statement No. 68 Accounting and Financial Reporting for Pensions
Statement No. 68 requires school districts to report their portion of the
unfunded (liability) or overfunded (asset) pension of the Teacher Retirement
System of Texas pension plan. The Texas Education Agency (TEA) has established
codes to implement the requirements of GASB Statement No. 68. In order to
record and report the liabilities, assets, expenses, deferred outflows and
deferred inflows in their annual financial report (AFR), school districts will
be required to use the following new object codes and data control codes:
code 1920, Net Pension Assets (NPAs)
code 2540, Net Pension Liabilities (NPLs)
code 5747, Pension Revenue
code 6147, Pension Expense
code 2605, Deferred Inflows – Pension
code 1705, Deferred Outflows – Pension
expense (object code 6147) should be allocated based on some method developed
by the school districts for example, based on allocated salaries. GASB 68
requires that this information be reported in the notes to the financial
statements as well. Pension expense may be coded to:
fund code, as applicable,
code 998 only, and
intent code 99 only.
These object codes will be
used to report the school district’s pension related information on the government-wide
financial statements. Please note that a school district may or may not use all
of the object codes.
The NPLs does not have to
be shown as its own line item on the face of the financial statements. However,
it may have its own line item if it is significant to the school district and
the school district determines that it would like it displayed separately. In
addition, GASB Statement No. 68 requires that this information be reported in
the notes to the financial statements.
disclose what comprises the Long-term Liabilities balance and Other Assets
balance in the notes to the financial statements. Specifically, ensure that you
disclose the Net Pension Liabilities and Net Pension Assets components.
for the TEA to identify these amounts, the school district will need to report
Net Pension Assets, Net Pension Liabilities, and Pension Expense on its
Schedule L-1, Required Responses to Selected School FIRST Indicators. A revised
Schedule L-1 will be released in the near future.
If you have any
questions concerning GASB 68, please refer to GASB Statement No. 68 at http://www.gasb.org/resources/ccurl/988/315/GASBS%2068.pdf or you may contact the Division of
Financial Compliance at (512) 463-9095.