At
its Board meeting on September 24, the Financial Accounting Standards Board
added a limited scope project to its agenda that would lead to an
Interpretation of FASB Statement No. 87, Employers’ Accounting for Pensions.
The project will address the measurement of obligations under so-called “cash
balance” pension plans. Current accounting guidance does not specifically
address the types of benefit arrangements that exist in many cash balance
pension plans.
Key
objectives of the project will be to define the characteristics of the plans
that the proposed guidance would apply to—that is, what a “cash balance” plan
is for purposes of the proposed Interpretation—and to provide an accounting
method that can be used consistently by companies to measure their pension
obligations to employees.
The
Board directed the FASB staff to prepare a proposal of the project’s scope and
to prepare a timetable for the project.