(Bloomberg) -- U.S. state and local governments will have toreport billions of dollars in health care liabilities on theirbalance sheets under an accounting change aimed at improvingdisclosure of retiree benefits.

As a result of rules approved Tuesday by the GovernmentalAccounting Standards Board, municipalities and states will have torecord the cost of health insurance and other benefits besidespensions in financial statements, the board said in a statement.Such costs are currently disclosed only in footnotes.

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The change is part of a push by the accounting-standards setterto improve how governments report the cost of worker benefits thatthey haven’t set aside enough money to pay. Similar requirementsstarted taking effect for pensions last year.

States alone have $529.8 billion of unfunded liabilities for health care and otherbenefits besides retirement checks, according to November 2014report by Standard & Poor’s, the New York-based bond ratingcompany.

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The shift that was approved unanimously will “significantlyimprove” disclosure of the promised benefits, the board said.

Reporting the liability promises to “represent a verysignificant liability for many state and local governments,” saidDavid Vaudt, chairman of the board, in the release. “It is criticalthat taxpayers, policy makers, bond analysts and others areequipped with enhanced information.”

The rule is set to take effect for the years starting after June15, 2016.

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