The new Pension Exposure Draft is released

The FASB released the Pension exposure draft today.

Some important items:

The Exposure draft would require:
a. Recognize in its statement of financial position the overfunded or underfunded status of a defined benefit postretirement plan measured as the difference between the fair value of plan assets and the benefit obligation. For a pension plan, the benefit obligation would be the projected benefit obligation; for any other postretirement benefit plan, such as a retiree health care plan, the benefit obligation would be the accumulated postretirement benefit obligation.

The second important point is that the standard would become effective for most companies in 2007:

Issue 4: This proposed Statement would require a public entity that currently
measures plan assets and benefit obligations as of a date other than the date of its statement of financial position to implement the change in measurement date as of the beginning of the fiscal year beginning after December 15, 2006. If that entity enters into a transaction that results in a settlement or experiences an event that causes a curtailment in
the last quarter of the fiscal year ending after December 15, 2006, the gain or
loss would be recognized in earnings in that quarter. Net periodic benefit cost in the year in which the measurement date is changed would be based on measurements as of the beginning of that year.

SOX and derivatives

There is an interesting article on TCS Daily today that looks at SOX, it is interesting when compared to Jack Ciesielski blog entry for today at the Accounting Observer Blog. The TCS piece is a good example of how business people downplay the benefits of SOX and accentuate the costs. But many times SOX work has uncovered weak internal controls on basic accounting functions. Mattson Technologies 8-K is a good example, not derivatives, not Fin 46, rather it was:

In connection with the preparation and review of the Company's financial statements for the year ended December 31, 2005, management became aware that the Company's previously reported results for the first, second and third quarters of 2005 contained errors related to its recognition of revenue, assessment of inventory valuation, recording of depreciation and amortization expense for certain assets, and estimation of statutory liability for severance payments earned by certain foreign employees.