The Financial Accounting Standards Board says it wants to start a project to review reporting rules for defined benefit pension plans, 401(k) plans and other retirement plans.[@@]
FASB, Norwalk, Conn., says the project could end up revising the guidelines included in Statement Number 87, which deals with employers’ accounting for pensions, and Statement Number 106, which deals with employers’ accounting for postretirement benefits other than pensions.
In other FASB news, Paul Beswick, a FASB practice fellow, says questions about life settlement accounting have raised the possibility that FASB might come up with new rules for reporting the value of all life insurance policy purchases.
FASB is looking at retirement plan accounting rules because the U.S. Securities and Exchange Commission and FASB’s own advisory council members have complained about the current state of retirement plan financial reporting, FASB officials report.
“While the accounting and reporting issues do not appear to lend themselves to a simple fix, the board believes that immediate improvements are necessary and will look for areas that can be improved quickly,” FASB Chairman Robert Herz says in a statement.
FASB is hoping to complete one round of changes in 2006. That phase will focus on requiring employers to include information about the funding status of retirement plans in their balance sheets.
A second phase will cover topics such as rules for measuring retirement plan obligations and recognizing retirement plan costs in earnings reports.