The Securities and Exchange Commission won't require amended filings to correct misclassifications of a new Financial Accounting Standards Board standard for defined-benefit pension plans, says a recent alert from the AICPA's Center for Audit Quality.The new standard, SFAS 158, requires that employers move any surpluses or deficits in their retirement benefit plan funding off the footnotes and onto the face of the balance sheet, while making an adjustment in the ending balance of "accumulated other comprehensive income."
Some companies did not properly implement FASB's guidance on what to do with the transition adjustment as required by the new standard. However, SEC staffers told the CAQ they won't require amended filings, as long as the misapplication does not produce a material misstatement, and the components of comprehensive income and the transition adjustment are clearly disclosed on the financial statement in such a way that the proper amounts can be determined.
The SEC cautioned, however, that the decision isn't meant to set a precedent for other types of misapplications that could have an impact on either comprehensive income or AOCI.
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