boston.com Business your connection to The Boston Globe

Board: Overhaul pension reporting

Fuller disclosure of finances is goal

NORWALK, Conn. -- The nation's accounting standards board voted yesterday to move ahead with a broad overhaul that would require companies to more fully disclose the financial health of pension plans.

The Financial Accounting Standards Board approved a project expected to lead to new rules requiring companies to report their pension obligations on their balance sheets.

Critics say the current rules allow companies to obscure their future obligations to employees in footnotes, manipulating the profits they report to investors.

''The project intends to make it easier for investors, employees, and retirees to understand and assess a company's financial position as well as its ability to carry out the obligations of its pension and post-retirement benefits," said Gerard Carney, FASB spokesman.

FASB officials said the new rules could result in hundreds of billions of dollars in defined-benefit pension obligations being shifted onto balance sheets. The move will help retirees determine if their companies can meet pension obligations, officials said.

The board decided to undertake the project in two phases, with the first phase completed by the end of 2006.

The initial phase will focus on improving transparency by requiring the funded or unfunded status of pension plans be recognized on the balance sheet.

SEARCH THE ARCHIVES
 
Today (free)
Yesterday (free)
Past 30 days
Last 12 months
 Advanced search / Historic Archives