Now that accounting rulemakers are planning to require companies to move their pension obligations from the footnotes to the balance sheet, companies are appealing for a new measurement formula to determine what they will report as a pension liability—one that would lower the value of the reported cost.
The Financial Accounting Standards Board has proposed in the first phase of its two-part project to improve pension disclosures to require companies to make no substantive change in the way they calculate their existing pension obligations, but to move those figures from the footnotes of the financial statements onto the face of the balance sheet. The Board’s goal is an expedited rule change to make a big improvement in the visibility of a company’s pension status with as little disruption to the reporting process as possible.
