The new FASB 106: how to account for postretirement benefits; new rules will have a major impact on most companies' bottom lines.
Journal of Accountancy › Vol. 172 Nbr. 2, August 1991
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The new FASB 106: how to account for postretirement benefits; new rules will have a major impact on most companies' bottom lines.
After more than a decade of deliberations, the Financial Accounting Standards Board approved its Statements no. 106, Employers' Accounting for Postretirement Benefits Other Than Pensions, which requires employers to accrue the cost of retiree health and other postretirement benefits.
This article summarizes the statement's important provisions, including a significant amendment to accounting for deferred compensation contracts (Accounting Principles Board Opinion no. 12, Omnibus Opinion--1967). The sidebar on page 39 illustrates the ruling's financila impact on a hypothetical employer. Statement no. 106's impact will be farreaching. It will slash millions of dollars from many companies' reported not profits and will require add...See the full content of this document
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