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Deloitte comments on FASB's proposed ASU on defined benefit plans disclosures

Published on: Apr 25, 2016

Deloitte & Touche LLP comments on the FASB's proposed ASU, Changes to the Disclosure Requirements for Defined Benefit Plans, which was issued in January 2016.

An excerpt from the comment letter is shown below:

We support the FASB’s ongoing efforts to improve the effectiveness of disclosures in the notes to the financial statements. We agree with several aspects of the Board’s proposed ASU, primarily those that eliminate certain disclosures that were not pertinent to financial decision making. However, we have mixed views about the newly added disclosure requirements, as explained in our responses to the questions below.

We support the proposed requirements to separate disclosures for domestic and foreign plans and to disclose a narrative description of the reasons for significant gains and losses resulting from remeasurement of the benefit obligation and plan assets. Such requirements encourage financial statement preparers to better understand their pension plan gains and losses and to describe the impact of significant changes in estimates.

However, we suggest that to further improve disclosure effectiveness for defined benefit plans, the FASB consider the clarifications described in our response to Question 2 below and the additional disclosure requirements described in our response to Question 4. In addition, as described in our response to Question 5, we suggest eliminating the requirement for both public and nonpublic companies to disclose the effects of a one-percentage-point change in the assumed health care cost trend rate for postretirement health care plans.

Full text of the comment letter is available below.


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