Governmental Accounting Standards Board Statement Number 2

In January 1986, the Governmental Accounting Standards Board issued Governmental Accounting Standards Board Statement 2: Financial Reporting of Deferred Compensation Plans Adopted under the Provisions of Internal Revenue Code Section 457.

Summary

This Statement required that, for employers using governmental fund accounting, Internal Revenue Code (IRC) Section 457 deferred compensation plan balances be displayed in an agency fund of the governmental employer that has legal access to the resources, whether the assets are held by the employer, a public employee retirement system (PERS), a nongovernmental third party, or another governmental entity under a multiple-jurisdiction plan. Governmental public utilities and public authorities should report the liability in the balance sheet with a corresponding designated asset.

Note disclosure is required of:

• the requirement of IRC Section 457 that the assets in the plan remain the property of the employer until paid or made available to participants, subject only to the claims of the government's general creditors and
• the government's fiduciary responsibilities under the plan.

Status

This Statement was superseded by GASB 32.

Effective Date

Financial statements for periods ending after December 15, 1986

Amends earlier standards

Amended NCGAI 6, ¶5, and GASB 1, ¶8

Amended by later statements

Prior to be superseded, this statement was amended by GASB 14 and GASB 31. Specifically, paragraph 4 was amended by GASB 31 ¶6, paragraph 11 was amended by GASB 31 ¶7, and paragraph 14 was amended by GASB 14 ¶11 and ¶63.

Discussion