The Financial Account-ing Standards Board has released an update to improve the financial reporting on pensions and other post-retirement benefits. The changes pertain to the pre-sentation of defined benefit costs in the income statement. Under U.S. GAAP, the defined benefit pension cost and the post-retirement benefit cost (net benefit cost) include a number of components that reflect various aspects of an employer's finan-cial arrangements, along with the cost of the benefits given to employees. Those components are supposed to be aggregated when they are reported on the financial statements. However, FASB heard from many of its constituents that the presentation of defined benefit cost on a net basis combines elements that can be quite different. They argued that the current presentation requirement is not as transparent as it should be and it decreases the usefulness of the finan-cial information. They contended that it required users to incur bigger costs when they analyzed financial statements.
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