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FASB Delays Issuance of Final Standard on Multiemployer Plan Disclosures
By: Mark Prouhet
Mark Prouhet
Manager
Construction & Real Estate, Manufacturing & Distribution
St. Louis
314.231.5544
At its November 10, 2010, board meeting, the Financial Accounting Standard Board (FASB) delayed issuance of a final standard on Accounting Standards Update of Subtopic 715-80, Compensation – Retirement Benefits – Multiemployer Plans. The proposed effective date in the exposure draft, issued September 1, 2010, was December 31, 2010, for public entities, with a one-year deferral for nonpublic entities.
FASB has received more than 300 comment letters in response to its exposure draft. Respondents—including companies participating in multiemployer plans, accountants, actuaries, attorneys, bankers, sureties and others—cite increased costs, unfair burdens on employers and misleading and outdated information as causes for concern. Many companies also are concerned the additional proposed qualitative and quantitative disclosures would prevent or limit their ability to obtain financing from banks and, for contractors, their ability to obtain surety bonds.
Overall, respondents agree additional disclosures may be appropriate, specifically in instances when a withdrawal is probable. However, the board acknowledges that the respondents’ concerns warrant further consideration and deliberation. FASB did not provide a new effective date at its meeting, indicating a decision would be made at a future meeting after further deliberations have been substantially completed, likely in early 2011.
While this latest move is a positive sign for those concerned about this proposal, it is far from certain additional deliberations will result in a significant change to the proposed disclosures; in fact, the only result may be a slightly longer implementation period.
For details on the exposure draft and proposed changes, please see the BKD Alert “Multiemployer Plan Disclosure Changes Proposed,” released in September 2010, or the comment letters submitted to FASB.
Contact your BKD advisor to further discuss the potential impact of the proposed changes.
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