New Pension Rules

The Wall Street Journal Reports that the FASB has decided that companies must now report net pension liabilities on their balance sheet.

While companies already had to file a footnote to financial statements detailing pension assets and liabilities, I would imagine that moving the net liability onto the balance sheet will make it harder for management to carry big pension liabilities since the net number will be more visible.

FASB will be conducting a more in depth review of pension accounting in the near future, hopefully they deal with the unrealistic rates of return companies routinely assume for their pension assets.

Timothy Burger
timothyb(at)timothyburger.com