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FASB Concepts Statement No. 6, Elements of Financial Statements ISSUE



An employer participates in a multiemployer defined benefit pension plan. When the employer enters the plan or improves benefits under the plan, the employer unconditionally promises to pay certain future contributions to the plan and executes an agreement that specifies the amounts of those future contributions. The amounts of those future contributions are calculated based on the plan's prior service cost associated with the participants entering the plan or the improved benefits. In return, the plan unconditionally promises to pay pension benefits to the employer's covered participants in the plan. The issue is whether an employer must record a liability for the total future payments for prior service costs pursuant to the agreement at the date the employer enters the plan or improves benefits under the plan. EITF DISCUSSION The Task Force reached a consensus that based on paragraph 68 of Statement 87 the existence of the executed agreement does not require that a liability be reported beyond any contributions currently due and unpaid. STATUS No further EITF discussion is planned

Topics: Copyright © 1990, Financial Accounting Standards Board
Year: 1990
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