In any case, Detroit is recognizing this GASB-led change already, according to Orr's June, 2012 report "City of Detroit Proposal for Creditors," page 24 (hey, how about a Report for Citizens?):
In addition, the Governmental Accounting Standards Board has issued a statement (No. 67), effective during the City's 2014 fiscal year, requiring municipalities to recognize their unfunded pension benefit obligation as a liability and to more comprehensively measure the annual costs of pension benefits.
However, under the old accounting assumptions the liability would be $1.5B less than the $3.5B pension fund deficit. Says the Orr report:
Even if the City were not to change prior actuarial assumptions, pension UAAL is projected to grow to nearly $2 billion by 2017. The adoption of realistic actuarial assumptions would result in a significantly higher number for UAAL.
Note that liability is projected out to 2017. Now we're getting somewhere. Five years of liabilities, but not five years of revenues, let alone counting of past assets. Judged that way, we'd all be broke!
Accounting is not only about arithmetic truth; it is also about choices of what and how to account.
I became curious about this when this NY Times article about Detroit's proposed bankruptcy came out and so I looked up Detroit's Comprehensive Annual Financial Report (CAFR) 2012 (you might want to keep this document open -- we'll be referring to it a lot in this article). All government CAFRS -- variously estimated to number between 184,000 -- 230,000 - are now available online, yet somehow, the media doesn't seem to know how to use Google or Bing, and they just take the official word of their condition from public officials. The decline in investigative journalism is a subject for another article, but the ability to promulgate almost any kind of financial mistruth is one glaring result, and the criminogenic environment it creates is costing us trillions.
When I asked Justice Party candidate Rocky Anderson at a political stopover (about 1:13 in, where he also states support for State Banks and Greenbacking (debt-free money issuance direct from government)) if comprehensively auditing the CAFRs would be a good idea, he heartily agreed. It's too soon to say there is a "CAFR Reform Movement" but there are cracks in this long-time method of legally separating money from the taxpayers for the benefit of Wall Street and its fund managers, and then turning around and saying the client governments are broke.
Here's a summary breakdown of some major assets in the Detroit CAFR for FY 2012:
$5.1B in the Detroit pension fund (page 180)