<nobr>Apr 21, 2010</nobr>

FASB to Issue Exposure Draft on Disclosure Requirements of Employer's Participation in Multiemployer Plan

The Financial Accounting Standards Board at an April 14 meeting agreed on the staff's recommendation for an employer to disclose both quantitative and qualitative information about its participation in a multiemployer plan. FASB said such disclosures would inform financial statement users about the "employer's commitment to the plan and the effect of future cash flows."

The Board directed the staff to draft an Exposure Draft of a proposed Accounting Standards Update for vote by written ballot, with the Exposure Draft open for a 60-day comment period. FASB also agreed to propose that the new guidance should be effective for fiscal years ending after December 15, 2010, except that for nonpublic entities the new guidance should be effective for the first annual period beginning after December 15, 2010.

According to the meeting handout, the staff proposed, among other things, that the disclosures should include:

• A description of the contractual arrangements, including for each year covered by the current agreement, the agreed rate of contributions, and any minimum contributions required by the agreement;


• A narrative description of the entity's exposure to significant risks arising from its participation in the plan, for example the extent to which the entity can be liable to the plan for other participating employers' obligations under the terms and conditions of the plan, the entitys inability to influence the plan's investment decisions and consequences the entity might face if it ceased contributing to the plan; and


• A narrative description, including the expected effect, of any funding improvement plan or a rehabilitation plan.

FASB staff indicated that the proposed Accounting Standards Update could be issued by the end of May.

Questions or comments on this issue should be addressed to Kathryn Ricard (kricard@eric.org).

FASB Project Update

FASB Meeting Handout

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