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Public University Analysis

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Submitted By tigerorchid1
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Pages 5
Assignment 2: Public University Analysis

Professor JoEtta Malone

Course Title ACC410006VA016-1126-001

September 3, 2012

One benefit that many employees either have or wish they had is contribution into a pension or retirement plan. From an accounting view point, there are many guidelines that need to be followed for companies or universities with these plans. The GASB has proposed changes recently that will affect the pension liability on the financial statements of universities and other non-profits. I have looked at the financial statements of the Ohio State University.

The Ohio State University has two basic retirement plans available to their employees. The most popular plan is “covered by the Public Employees System of Ohio (OPERS)”. Their second plan is one in which the employee can “participate in” an “Alternative Retirement Plan (ARP)”. The major difference between the two is the OPERS is a defined benefit plan which includes contributions made by the employee, contribution matches made by the university and also other fringe benefits offered to their members. The ARP is a defined contribution plan that only includes contributions made by the employee and contribution matches made by the university.

GASB has provided guidelines for Statement No. 67 and Statement No. 68 which make universities and non-profits account for future obligations that they have on their current financial statements. Most university employees receive “two types of compensation”; regular salary and a deferred salary that is based on the employee’s level and years of service. Previously universities did not have to record the deferred salary portion on their financial statements; they now have to do so. Because of this, the financial statements of the

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