FASB To Overhaul Pension Accounting

Jonathan Weil, staff reporter for the Wall Street Journal, wrote an article FASB Votes to Revise Pension Rules (subscription required).

U.S. accounting-rule makers voted to pursue an overhaul of the way companies treat their pension plans and other employee-retirement benefits in their financial reports to investors. But any far-reaching changes probably will remain years away.

In a unanimous vote, the Financial Accounting Standards Board approved its staff's recommendation for a two-pronged approach, the first stage of which could result in new rules by the end of next year. Critics and securities regulators long have complained that the current rules let companies obscure their future obligations to employees and manipulate the profits they report to investors.

I am amazed that FASB has not reacted more quickly to the needs of the users of financial information. I too would like to see better disclosure that is more easily understood by more people.