This Statement requires employer governments to recognize revenue and expenditures or expenses for these on-behalf payments. For employer governments that are not legally responsible for the payments, expenditures or expenses should equal the amounts recognized as revenue. Employer governments that are legally responsible for the payments should follow accounting standards for that type of transaction to recognize expenditures or expenses and related liabilities or assets. This Statement requires governmental entities that make on-behalf payments for fringe benefits and salaries to classify those payments in the same manner that they classify similar cash grants to other entities. The provisions of this Statement are effective for financial statements for periods beginning after June 15, 1995.
Earlier application is encouraged.