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significant matters affecting the comparability of the costs
recognized for all periods presented. FASB 81 provided several
illustrative disclosures, including the following to be used
where benefits are annually funded based on estimated accruals:
In addition to providing pension benefits, the
company and its subsidiaries provide certain health
care and life insurance benefits for retired employees.
Substantially all of the company's employees, including
employees in foreign countries, may become eligible for
those benefits if they reach normal retirement age
while working for the company. The estimated cost of
such benefits is accrued over the working lives of
those employees expected to qualify for such benefits
as a level percentage of their payroll costs. Accrued
costs are funded annually and were $XXX for 19X4.
FASB 81 also provided the following illustrative disclosure
for use where benefit costs are expensed when paid:
In addition to providing pension benefits, the
company and its subsidiaries provide certain health
care and life insurance benefits for retired employees.
Substantially all of the company's employees, including
employees in foreign countries, may become eligible for
those benefits if they reach normal retirement age
while working for the company. The cost of retiree
health care and life insurance benefits is recognized
as expense as claims are paid. For 19X4, those costs
totaled $XXX.
Petitioner's 1987 financial statement stated the following
regarding its provision of health care and life insurance
benefits:
In addition to providing pension benefits, the Company
provides certain health care and life insurance
benefits for retired employees. Substantially all of
the Company's employees may become eligible for those
benefits if they become eligible for retirement while
working for the Company. The cost of retiree health
care and life insurance benefits is recognized as
expense as claims are paid. * * *
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