In late December, the FASB issued a revised FAS 132 regarding employers’ disclosure about pensions and other postretirement benefit plans. The new standard requires that companies provide the public with more details about their plan assets, benefit obligations, cash flows, benefit costs and other relevant information. This disclosure now is required in quarterly and annual financial statements – since the new guidance is effective for fiscal periods after December 15, 2003, companies will need to comply in their next quarterly and annual report.
For the first time, companies are required to give a breakdown of plan assets by category, such as equity, debt and real estate. A description of investment policies and strategies and target allocation percentages – or target ranges – for these asset categories also are required in financial statements. The new FAS doesn’t change required disclosures about defined contribution or multi-employer plans.
The FASB has advised that when prior periods are presented for comparability purposes, those periods should be restated to comply with the new guidance. The FASB also acknowledges, however, that it’s not always practical to obtain the prior period information; but in that situation, a company should disclose in its financial statement footnotes all information that is available and describe the information that was excluded.
SEC Issues Guide for Investors on Executive Compensation
The SEC has posted a brochure for investors designed to help them locate compensation information in company reports, including types of compensation and what is filed with the SEC, and where to locate information about executive pay (e.g. proxy statements, 10-Ks).
More on Preparing Executive Compensation Tables
In Broc’s interview with Alan Kailer on Preparing the Executive Compensation Tables, the complexities of preparing the compensation tables for the proxy statement are explored. In addition to this useful interview, in the “Proxy Season Resource Center,” we have posted an updated memo on this topic from Alan with contains more extensive analysis – with excellent charts – on how to prepare the executive compensation tables.
Posted by Kimberley Drexler