With the nation in an uproar over widespread pension fund problems, the Financial Accounting Standards Board has set a standard that will soon require companies to fully recognize on the balance sheet either an asset for a pension plan's overfunded status, or a liability for a plan's underfunded status.Standard 158, Employers' Accounting for Defined-Benefit Pension and Other Post-Retirement Plans, would eliminate companies' ability to only partially report the funded status of a post-retirement benefit plan - that is, the difference between the plan's assets and liabilities.
"This statement puts the obligation that companies have promised in the financial statements, so that they reflect all of the company's obligations and assets, so that an investor or anyone else can see the financial condition of the company and how well the company is able to fulfill those obligations," said FASB project manager Peter Proestakes. "Financial statements will be complete."
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