Coping with FASB's new pension rules

Article Abstract:

The December 1985 announcement of new regulations governing employer-paid pension plans by the Financial Accounting Standards Board, with its Statements No. 87 and 88, will begin affecting accounting requirements in 1987. The new accounting standards have defined accumulated benefit obligations, projected benefit obligations and net periodic pension costs. Among the new accounting standards are: new methods for calculating costs of pension benefit programs, mandatory disclosure of pension liabilities on corporate balance sheets, and new methods of accounting for pension plan assets. Six alternative steps that the pension plan manager may wish to consider in light of these new accounting standards are discussed.

Laws, regulations and rules, Pensions, Employee benefits

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How the FASB exposure draft would revamp pension accounting

Article Abstract:

The Financial Accounting Standards Board has announced new standards for pension liability accounting. For some cases, the pension liability must be booked, though future wage increases need not be considered for pay-related pension plans. An end to the projected future salary hikes from the computation of the liabilities used to decide balance sheets is applauded by accountants. Pension cost elements include: interest on projected benefit obligation, plan asset returns, benefit accruals, and amortization of net accumulated gain or loss from investment and actuarial experience.

Wages, Wages and salaries

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FASB re-examines compensation for stock plans

Article Abstract:

The controversy about whether the costs of employee stock compensation plans should be measured at the exercise date or the date of grant is examined. Current accounting practice measures the cost of an incentive stock option (ISO) plan at the date of grant and measures a stock appreciation right (SAR) at the exercise date. The Financial Accounting Standards Board (FASB) has recently studied the issue and put forth several proposals that would record at least some compensation expense. The FASB invites comments on these proposals.

Incentive stock options

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