Retiree health benefits: NAA study offers guidance for firms in complying with FAS 106
Article Abstract:
The Financial Accounting Standards Board's Statement of Financial Accounting Standard (SFAS) 106, Employers' Accounting for Postretirement Benefits Other Than Pensions, requires that employers use accrual accounting for retiree health and other postemployment benefits. Most firms have used pay-as-you-go accounting, but SFAS 106 requires that their financial statements will reflect the costs of postemployment benefits for the first time. The National Association of Accountants did a study of small and medium-sized firms to assess the impact of SFAS 106. The results of the survey indicate that the financial statements of firms will reflect higher expenses, greater liabilities, and reductions in net worth. Before adopting the new standard, company management should set its goals, gather data, estimate their obligations and costs, become cognizant of the design of plans and alternatives, and put any needed changes into effect.
Publication Name: Management Accounting (USA)
Subject: Business, general
ISSN: 0025-1690
Year: 1991
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Induced conversions of convertible debt: beware of the pitfalls
Article Abstract:
Decreasing interest rates make many debt instruments issued by corporations during periods of higher interest rates relatively expensive. This situation encourages the debt-circulating companies to convert such high interest rate debts by offering bond holders greater amounts of stock than the original convertible debt instruments promised. These 'induced conversions' of debt could be accounted for as either extinguishments of debt or conversions of convertible debt. The Financial Accounting Standards Board has issued its Financial Accounting Standard No. 4, which requires that the extra amounts of stock offered to convert debt (often referred to as the induced conversion's 'sweeteners') be accounted for as expenses by the debtor upon conversion. The economics of this accounting standard are examined and evaluated.
Publication Name: Management Accounting (USA)
Subject: Business, general
ISSN: 0025-1690
Year: 1987
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Standards overload: what must be done; Why should small companies be subject to the same disclosure requirements as GM or AT & T?
Article Abstract:
Both the American Institute of Certified Public Accountants and the Financial Accounting Standards Board have investigated the need for small businesses to follow generally accepted accounting standards on several occasions since 1980. The findings of their studies indicate that small enterprises need not account for many items as carefully as do the larger publicly traded corporations, and that, in fact, adherence to such standards by smaller firms cannot be cost-justified. These and other aspects of the standards overload problem facing the accounting industry and managerial accountants in all industries are discussed. Methods for reducing standards are proposed that focus on identifying which standards need to be followed by what types and sizes of firms.
Publication Name: Management Accounting (USA)
Subject: Business, general
ISSN: 0025-1690
Year: 1987
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