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Financial Reporting Alert 20-7: Financial Reporting Considerations Related to Pension and Other Postretirement Benefits

Published on: Nov 13, 2020

This Financial Reporting Alert highlights some of the important accounting considerations related to the calculations and disclosures entities provide under U.S. GAAP in connection with their defined benefit pension and other postretirement benefit plans. The alert includes a discussion of:

  • The potential impact of the coronavirus disease 2019 (“COVID-19”) pandemic on certain key actuarial assumptions that affect the measurement of defined benefit obligations and plan assets.
  • The effective dates for FASB Accounting Standards Update No. 2018-14, which addresses disclosure requirements related to defined benefit plans.
  • Considerations related to an entity’s (1) discount rate selection method, (2) use of a hypothetical bond portfolio, (3) use of a yield curve, and (4) measurement of components of benefit cost.
  • How expected future changes to the United Kingdom’s Retail Prices Index (RPI) could affect pension increases linked to that index.
  • How past and future rulings of the High Court of Justice in the United Kingdom could affect entities with U.K. pension obligations.
  • Recent SEC staff views on disclosures (e.g., critical accounting estimates, liquidity and capital resources, and non-GAAP measures) related to registrants’ pension and other postretirement benefit plans.


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