OCTOBER 2007 - The article “Displaying the Funding Status
of Postretirement Plans: The Impact of SFAS 158 Disclosure,”
by David N. Hurtt, Jerry G. Kreuze, and Sheldon A. Langsam (July
2007), contained two errors involving changes from the exposure
draft to the final Statement of Financial Accounting Standards (SFAS)
158, Employers’ Accounting for Defined Benefit Pension
and Other Postretirement Plans:
- SFAS 158 changed the proposed requirements in the exposure
draft by requiring recognition of previously unrecognized transition
assets or obligations as an adjustment to accumulated other
comprehensive income with subsequent amortization as a component
of net periodic benefit cost.
- Unlike the exposure draft, SFAS 158 does not permit retrospective
application. SFAS 158 provides that pension balances are to
be recognized as components of the ending balance of accumulated
other comprehensive income, net of tax.
In addition, in Exhibit 3 on page 37, a line was omitted from
the Assets section of Bell South’s balance sheet. Underneath
“Current assets,” there should have been an entry
for “Property, plant, and equipment, net” of $21,723
in both the “As Reported” and “As Restated”
columns (there would be no “Adjustment” for SFAS 158
in the middle column). The totals in the rest of the balance sheet
are correct as they originally appeared.
The authors regret these errors. Exhibit 3 has been corrected
online at www.cpajournal.com.
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