Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Pastimes : Clown-Free Zone... sorry, no clowns allowed -- Ignore unavailable to you. Want to Upgrade?

To: Giordano Bruno who wrote (247405)	6/27/2003 6:39:03 AM
From: Giordano Bruno	Respond to of 436258

FASB Seeks to Require Firms To Disclose More Pension Data By JONATHAN WEIL Staff Reporter of THE WALL STREET JOURNAL Companies that maintain defined-benefit pension plans for their workers and retirees would be required to make quarterly financial disclosures that detail the plans' impact on earnings, under a decision this week by accounting-rule makers. Currently, corporate financial statements are required to contain such disclosures only on an annual basis. The lack of more frequent disclosures long has been a source of frustration for many investors. The decision Wednesday by the private-sector Financial Accounting Standards Board, Norwalk, Conn., is part of a broad, albeit modest, effort by the board to tweak its 18-year-old standard for pension accounting. Staff members at the board say the rules could take effect as soon as December. A formal draft of this and other pension-accounting rule changes could be released as soon as August. Under the decision, which is subject to change, companies would be required to disclose the impact, in dollar amounts, that the various parts of their pension plans had on each quarter's earnings. Readers of a public company's financial statements also would be able to see for the first time the degree to which various line items on a company's income statement were boosted or dragged down by the company's pension-plan activities. Under current disclosure rules, by the time investors get to see a company's annual pension disclosures, the numbers typically are three months old and provide minimal insight into how specific items on a company's financial statements were affected. Also, companies for the first time would be required to disclose how much money they expect to infuse into their corporate pension plans' trust accounts. Those projections would be made annually, with quarterly updates required of companies that substantially change their projections during interim periods. Currently, companies need only report such contributions on a historical basis. Investors long complained about how the complex rules for pension accounting incorporate smoothing devices, so the effects of a pension plan's investment performance are spread out over time. The aim of the 1985 rules had been to avoid jarring corporate income statements with short-term market volatility. However, those smoothing mechanisms often boost earnings artificially, especially during down markets. Those structural problems likely won't be addressed soon. Board members have been eyeing some easy fixes to the system, such as improving the frequency and content of pension-related disclosures. Write to Jonathan Weil at jonathan.weil@wsj.com Updated June 27, 2003