(Bloomberg) — U.S. state and local governments will have to report billions of dollars in health care liabilities on their balance sheets under an accounting change aimed at improving disclosure of retiree benefits.
As a result of rules approved Tuesday by the Governmental Accounting Standards Board (GASB), municipalities and states will have to record the cost of health insurance and other benefits besides pensions in financial statements, the board said in a statement. Such costs are currently disclosed only in footnotes.
The change is part of a push by the accounting-standards setter to improve how governments report the cost of worker benefits that they haven't set aside enough money to pay. Similar requirements started taking effect for pensions last year.
States alone have $529.8 billion of unfunded liabilities for health care and other benefits besides retirement checks, according to November 2014 report by Standard & Poor's, the bond rating company.
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