Three New Statements: FASBs 111, 112 and 113

Article excerpt

Three final statements were issued by the Financial Accounting Standards Board.

Statement rescinded. Statement no.111, Rescission of FASB Statement no. 32 and Technical Corrections, rescinds Statement no. 32, Specialized Accounting and Reporting Principles and Practices in AICPA Statements of Position and Guides on Accounting and Auditing Matters, and its related pronouncements.

Statement no. 32 specified which American Institute of CPAs SOPs and guides were preferable for purposes of justifying a change in accounting principle under Accounting Principles Board Opinion no. 20, Accounting Changes.

In January 1992, the AICPA issued Statement on Auditing Standards no. 69, The Meaning of "Present Fairly in Conformity With Generally Accepted Accounting Principles" in the Independent Auditor's Report, which spells out the accounting standards and guidelines that constitute generally accepted accounting principles-- rendering Statement no. 32 and its related pronouncements no longer necessary (see "The AICPA's Role in the Standard-Setting Process," page 67).

Statement no. 111 became effective as of November 30, 1992.

Postemployment benefits. FASB Statement no. 112, Employers' Accounting for Postemployment Benefits, establishes standards for accounting for benefits provided to former or inactive employees and their dependents and beneficiaries before retirement. It is effective for fiscal years beginning after December 15, 1993.

Benefits covered by the statement include salary continuation, severance pay, supplemental unemployment benefits and disability-related benefits.

Statement no. 112 requires employers to recognize a liability for postemployment benefits in accordance with FASB Statement no. 43, Accounting for Compensated Absences, if all of the following conditions are met:

* The obligation is attributable to employees' service already rendered. …