Agenda - Council - 05/12/1981 - Laserfiche WebLink

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~HE WEEK IN REVIEW- 81-19 -4- May 8,1981 with the issuance of Statement 35. That pronouncement requires that the annual financial state- ments of a defined benefit pension plan include information about the net assets available for benefits and the present values of accumulated plan benefits, along with appropriate information about assumptions underlying those computations. Plan participants are not the only ones interested in financial information about pension commit- ments. Investors in companies that sponsor pension plans also have a rightful concern. Existing rules on accounting by employers permit considerable flexibility in measuring pension cost and in determining other information that employers should disclose about their obligations· The Board has undertaken two projects to correct the deficiencies. One of the projects, which is already com- pleted (Statement 36), established new employer pension disclosure rules on an interim basis pend- ing completion of the second project, which is a comprehensive reconsideration of all employer pension cost and liability measurement standards. The critics and supporters of Statement 36 alike should recognize that the whole area of pension disclosures will be reconsidered by the FASB as part of the comprehensive pension accounting project I mentioned earlier. In the meantime, however, the new disclosures should lift the level of understanding and debate several notches above that resulting from previous disclosures of only unfunded vested benefits. Conclusion In my iudgment, the Board's new rules on inf/ation-adiusted data and pensions and the broadening of our standard-setting activities into the nonbusiness area, into specialized industry areas, and beyond the financial statements into other means of financial reporting, are consistent with socl- ety's expectations of bei£htened accountability in turbulent times. In prescribing standards for financial reporting, the Board is striving to faithfully measure economic activity and to avoid the purposeful regulation of economic behavior. We recognize that behavior is affected by disclosure-if it weren't the disclosure would be worthless-but even in these politi- cized, turbulent times, the Board will make every effort to be guided by the precept of decision- usefulness and to reject the temptation to try to direct or control economic decision-making. The Washington Scene SEC ISSUES NEW PROPOSAL ON ENVIRONMENTAL DISCLOSURES The SEC has issued a release proposing amendment~to Regulation S-K which would: · Establish a threshold that would permit registrants to omit disclosures about certain environmental proceedings to which a governmental authority is a party, and · Require registrants to disclose (or furnish upon request) the names and ad- dresses of governmental authorities from which compliance-related re- ports pertaining to disclosable environmental proceedings can be obtained. These amendments would implement recommendations contained in the recent Staff Report on Corporate Accountability. They are intended to improve the quality of disclosure by permitting the omission of information about certain less significant environmental proceedings to which a