GASB Issues Two Other Postemployment Benefit (OPEB) Related Exposure Drafts

The Governmental Accounting Standards Board (GASB) issued two Exposure Drafts regarding OPEB-related financial reporting by state and local governments. These proposed standards will significantly alter the methods used to account for postemployment OPEBs, similar to the new GASB 67/68 pension standards. Like the pension standards, the unfunded liability will become a balance sheet item rather than a note disclosure. These proposed changes in OPEB reporting are sweeping in scope, and they will serve to increase the balance sheet liability and may significantly increase the volatility of annual OPEB expense.