Question

Under current GASB standards, how are other postemployment retirement benefits (OPEB) reported?

a.Using two different methods, one for health care plans and a second for other types of OPEB.
b. By disclosing information about OPEB in the notes to the financial statements, but without display of OPEB expenses or liabilities on the face of the financial statements.
c. In a manner that is quite similar to the reporting requirements for pension plans.
d. By using a modified accrual basis, which requires only expenditures of the current period be reported.

Answer 1

Other postemployment benefits (OPEB) are reported under GASB standards in a way that is similar to pension plan reporting, which includes reporting liabilities and expenses in the financial statements based on an actuarial basis.

Step-by-step explanation:

Under current Governmental Accounting Standards Board (GASB) standards, other postemployment benefits (OPEB) are reported in a manner that is quite similar to the reporting requirements for pension plans. This means that OPEB liabilities and expenses must be reported on the face of the financial statements. The liabilities are measured on an actuarial basis, and the expense recognition is based on a systematic and rational allocation of the cost of benefits over the periods in which the benefits are provided to employees.

The requirement ensures that the full cost of these benefits is recorded in the financial statements when the employee services are received, thereby providing a clearer picture of the financial obligations that the government has incurred.