FASB to propose increased disclosure of pension plan asset classes and value assumptions

CCH reports, "The Financial Accounting Standards Board (FASB) has instructed its staff to issue an FASB Staff Position (FSP) paper that proposes to improve disclosures about postretirement benefit plan assets now required by Financial Accounting Statement (FAS) No. 132(R), Employers’ Disclosures about Pensions and Other Postretirement Benefits."

"The FASB proposal, discussed at its February 13, 2008 meeting, would make the following three changes in current rules:"

"First, the proposal would require the disclosure of more asset categories than currently are required. A FASB staff review of 2006 annual reports of many companies in the Standard & Poor’s 500 found that most companies primarily disclose the categories of equity, debt, real estate, and 'other.'"

"Second, the proposal would require the disclosure of assumptions used to determine the fair value of plan assets. The FASB notes that FAS No. 132(R) already requires the disclosure of assumptions used to determine plan liabilities. "

"Finally, the proposal would reinstate an earlier requirement that a nonpublic entity 'disclose the annual amount of net periodic benefit cost recognized.'"