Financial Reporting Alert 21-3 — Financial reporting considerations related to pension and other postretirement benefits

Published on: 03 Dec 2021

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 discussion of:

  • The potential impact of the COVID-19 pandemic on certain significant actuarial assumptions that affect the measurement of defined benefit obligations.
  • The guidance in FASB Accounting Standards Update No. 2018-14 on disclosure requirements related to defined benefit pension and other postretirement benefit plans, which is effective for public business entities for fiscal years ending after December 15, 2020, and for all other entities for fiscal years ending after December 15, 2021.
  • 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 benefit cost components.
  • How past rulings of the High Court of Justice in the United Kingdom could affect entities with U.K. pension obligations.
  • SEC staff views on registrants’ (1) disclosures of critical accounting policies and estimates and (2) use of non-GAAP measures.

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