Financial Education

Companies frequently extend pension and health benefits to their employees in retirement. Beginning in 2007, U.S. GAAP requires companies to recognize any unfunded (that is, not supported by related assets) liability on the balance sheet. International Accounting Standards (and U.S. financial statements prior to 2007) show only a portion of any liability due, and companies are (were) permitted to smooth the effects of underfunded plans over many years.

For more information, see all articles on: Accounting, Adjusting Reported Financial Statements, Financial Statement Analysis, Fundamental Analysis

See also:

Accounting for Asset Retirement Obligations

Analyzing Asset Retirement Obligations

Asset Retirement Obligations – US Cellular Case Study

The Accounting Equation

Investment Objectives and Constraints for Insurance Companies