Curtailment Under FAS 158

[Guest merlin]

A plan froze benefits for owners only at 12/31/06. The curtailment was reported under FAS 88 on the sponsor's 12/31/06 financials.

Benefits are frozen for non-owners at 12/31/07 in connection with the termination of the plan. The curtailment gain is less than 1% of the PBO. Given the small amount of the gain, can I disregard it as immaterial for purposes of FAS 88? Does FAS 88 even apply any more, since FAS 158 pushes all gains and losses into AOCI?

[Andy the Actuary]

FASB88 would apply because it would affect expense. The treatment of the gain should be discussed with the client's auditor who will have final say.

[SoCalActuary]

A plan froze benefits for owners only at 12/31/06. The curtailment was reported under FAS 88 on the sponsor's 12/31/06 financials.

Benefits are frozen for non-owners at 12/31/07 in connection with the termination of the plan. The curtailment gain is less than 1% of the PBO. Given the small amount of the gain, can I disregard it as immaterial for purposes of FAS 88? Does FAS 88 even apply any more, since FAS 158 pushes all gains and losses into AOCI?

You should look at the Staff Notes for compliance with FAS 158, available from the FAS website.

The details of compliance for FAS 88 still apply, but in a new format.

That document is some 256 pages, and at least 15 deal directly with your issue.

[AndyH]

How's that for saving time Merlin!

[Guest merlin]

How's that for saving time Merlin!

What really hurts is that I asked the auditor, and he didn't know!