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The AAO Weblog covers accounting issues and current events as they relate the practice of investment analysis.

Aug 30

Written by: Jack Ciesielski
8/30/2007 4:00 AM 

Yesterday’s FASB meeting saw pension and OPEB standards creep back into a higher priority category than they’ve been for a while. Last year saw the the issuance of Statement 158, which put net benefit plan balances onto firm balance sheets; since then, there’s been hardly a peep about Phase 2 of the revamp of the benefit plan accounting standards.

The FASB staff proposed action on five areas (meeting handout here):

• Earnings smoothing (the expected return on assets mechanism and delayed recognition of events like market losses)

• Recognizing a single unit of cost (instead of the current stew service & interest costs, plus various amortizations and expected returns)

• Measurement of benefit obligations

• Disclosures (some would like more; others less. The staff’s proposal was that the Board should work the current derivatives disclosure project into this project)

• Getting some accounting standards - or at least disclosures requirements - worked into the accounting literature for multiemployer plans. (Currently, there’s not much accounting done for these.)

The Board seemed to agree that the issues were the right issues. Expect that they’ll keep a close watch on the IASB’s similar project which is a bit further along, and attempt to borrow what they can in an effort to keep things moving and to maintain the convergence process.