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Coping with FASB Statement No. 106--"Accounting for Post-retirement Benefits other than Pensions"
Benefits Quarterly
|December 10, 1990
Summary
The Financial Accounting Standards Board Statement No. 106 introduces new rules for nonpension postretirement benefits. Employers must carefully analyze design, funding, and tax implications to adapt their strategies.
Area of Science:
- Accounting Standards
- Financial Reporting
- Human Resources Strategy
Background:
- The Financial Accounting Standards Board (FASB) issued Statement No. 106, establishing new accounting rules for nonpension postretirement benefits.
- This statement significantly impacts how employers account for and manage these employee benefits.
Purpose of the Study:
- To analyze the complex design, funding, and tax issues arising from FASB Statement No. 106.
- To guide employers in adapting their strategies for offering postretirement benefits under the new accounting framework.
Main Methods:
- Analysis of accounting rule changes.
- Examination of design, funding, and tax implications.
- Contextual review of employer-specific human resources and financial strategies.
Main Results:
- FASB Statement No. 106 necessitates a fundamental shift in employer perspectives on postretirement benefits.
- Significant design, funding, and tax considerations emerge from the new accounting standard.
Conclusions:
- Employers require careful, context-specific analysis to navigate the implications of FASB Statement No. 106.
- Strategic adjustments in human resources and financial planning are essential for compliance and effective benefit management.