Academic journal article Journal of Accountancy

The Financial Accounting Standards Board

Academic journal article Journal of Accountancy

The Financial Accounting Standards Board

Article excerpt

The Financial Accounting Standards Board decided not to object to the American Institute of CPAs' plans to proceed with two projects that would amend the AICPA audit and accounting guide Audits of Employee Benefit Plans.

A final SOP, Accounting and Reporting by Health and Welfare Benefit Plans, which would supersede chapter 4 of Audits of Employee Benefit Plans, includes the following:

* Defined benefit health and welfare plans should account for and separately report benefit obligations in the financial statements, including postretirement benefit obligations. Footnote disclosure is not appropriate.

* Clarification of the requirement to recognize claims incurred but not reported.

* Benefit obligations should not include death benefits actuarially expected to be paid during the active service period of participants.

* Defined contribution health and welfare plans are distinguished from defined benefit health and welfare plans.

The SOP would be effective for audits of financial statements of single employer plans for plan years beginning after December 15, 1992, and multiemployer plans for plan years beginning after December 15, 1995, except for single employers with no more than 500 participants, for which the SOP would be effective for plan years beginning after December 15, 1994.

Also, a proposed SOP, being developed at the request of the FASB, "would improve the consistency in the valuation of investment contracts in plan financial statements," according to the AICPA employee benefits plans committee. …

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