GASB No. 68 “Accounting and Financial Reporting for Pensions” is effective for f
ID: 2481101 • Letter: G
Question
GASB No. 68 “Accounting and Financial Reporting for Pensions” is effective for fiscal years beginning after June 15, 2014. In terms of financial statement reporting, GASB No. 68 (Para. 20) requires that a liability should be recognized for the net pension liability. As noted in Paragraph 20: “The net pension liability should be measured as the portion of the actuarial present value of the projected benefit payments that is attributed to past periods of employee service in conformity with the requirements of paragraphs 22-32 (total pension liability), net of the pension plan’s net position” (GASB 68, 9). Assume this requirement existed for 2011 and 2012 in the city of Providence, Rhode Island. Read CARF reports on the municiplatiy's website.. While Total Assets do not change for these years, 11 calculate the Total Liabilities, Net Assets, and Debt Ratio for the City of Providence for these two years. Explain your results.
Explanation / Answer
Total liabilities= (Total current liabilities + long term liabilities)
The total liabiliites does not include the shareholders equity.
Net assets=Total assets-Total liabilities
Net assets is equal to the shareholders equity.
Debt ratio for the year=Total liabilities/shareholders equity
I am unable to view CARF report of municipality website for the city of providence, Rhode Island. Therefore would not be able to calculate the ratio and figures.
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