General Motors may be in trouble, according to a Wall Street Journal article by Michael Rapoport. Proposed changes to accounting law and regulations might force corporations to report liabilities incurred from pension plans. Current regulations permit organizations to report pension plans as net assets, by stating the difference between pension contributions and pension payouts. However, as Rapoport notes, the current approach fails to accurate
ly account for the total value of the pension plan and therefore might inflate the value of the corporation and its shareholder equity.
The Financial Accounting Standards Board (FASB) sets the federal rules that would dictate the new changes. Although the proposed accounting regulation changes have yet to be implemented, the FASB is already requiring organizations to list the funding status of pension plans on their annual balance sheets: the
All papers and essays are for research and reference purposes only!
Copyright 2002-2009
Direct Essays , LLC. All Rights Reserved. DMCA Webmasters make $$$$