FASB issues proposal to improve financial reporting on pension plans, three EITF draft abstracts.

The Financial Accounting Standards Board has issued a proposal that it believes would improve financial reporting by requiring employers to recognize the overfunded or underfunded positions of their defined benefit postretirement plans, including pension plans, in their balance sheets. The proposal would also require that employers measure plan assets and obligations as of the date of their financial statements. The proposed changes would increase the transparency and completeness of financial statements for shareholders, creditors, employees, retirees, donors and other users. Comments are due May 31.

Those interested in providing input on Employers' Accounting for Defined Benefit Pension and Other Postretirement Plans, an amendment of FASB Statements No. 87, 88, 106, and 132 (R), should submit their comments by e-mail to [e-mail], File Reference No. 1025300. Or, send comments to the "Technical Director--File Reference No. 1025-300," Financial Accounting Standards Board, 401 Merritt 7, P.O. Box 5116, Norwalk, CT, 06856-5116.

In another action, the FASB last month ratified the tentative conclusions reached by the Emerging Issues Task Force in three EITF draft abstracts. All of the draft abstracts were posted to www.fasb.org (the 30-day comment period ends May 4).

The draft abstract for EITF Issue No. 05-1, "Accounting for the Conversion of an Instrument That Became Convertible upon the Issuer's Exercise of a Call Option," addresses how the conversion of an instrument that became convertible upon the issuer's exercise of a call option should be accounted for.

The draft abstract for EITF Issue No. 062, "Accounting for Sabbatical Leave and Other Similar Benefits Pursuant to FASB Statement No. 43," addresses whether an employee's right to a compensated absence under a sabbatical leave or other similar benefit arrangement (a) that requires the completion of a minimum service period and (b) in which the benefit does not increase with additional years of service accumulates pursuant to paragraph 6(b) of Statement 43, Accounting for Compensated Absences.

The draft abstract for EITF Issue No. 063, "How Taxes Collected from Customers and Remitted to Governmental Authorities Should Be Presented in the Income Statement (that is, Gross versus Net Presentation)," addresses whether the scope of this issue should include all nondiscretionary amounts assessed by governmental authorities, all nondiscretionary amounts assessed by governmental authorities in connection with a transaction with a customer, or only sales, use and value added taxes.

Written comments will be considered by the EITF at the June 14-15 EITF meeting. Interested parties should submit their comments by e-mail to [e-mail], File Reference No. EITF0501, EITF0602 or EITF0603, respectively.