The US Financial Accounting Standards Board (FASB) has proposed
an accounting standard update that is intended to provide greater
transparency regarding entities that participate in multiemployer
pension and other postretirement benefit plans.
The updated standard would help users of
financial statements better assess the potential risks faced by
employers participating in multiemployer plans.
US GAAP currently requires employers to
disclose their total contribution to multiemployer plans, however
there is no requirement to describe the funding status of these
plans.
Under the proposed guidance, employers would
have to provide more information, including:
-
A description of
the plans the employer is involved with; -
The employer’s
contractual commitments to the plans; and, -
The expected
impact of participating in the plans on the employer’s future cash
flows (including the potential impact of plan withdrawal
obligations).
The draft proposal is available for comment
until 1 November.
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