Before the FASB's OPEB ruling: the first steps to take. (Financial Accounting Standards Board) (Other Postemployment Benefits)

Financial Executive, January, 1989 by Herdman, Robert K.; Neary, Robert D.

The Financial Accounting Standards Board's (FASB) forthcoming exposure draft on accounting rules for other postemployment benefits (OPEB) requires companies to include as liabilities in their financial statements estimates of the total costs of providing benefits for their retired employees. The proposed approach has serious financial implications as well as many complexities associated with issues of recognition and measurement. Companies can take six steps to evaluate the proposal's impact including: determining what benefits have been promised; gathering data needed for actuarial measurements; obtaining actuarial estimates of obligations; assessing funding and accounting impacts of estimated obligations; considering plan modifications; and monitoring future legislative and legal...

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