AGC, Construction Coalition Continue Promising Efforts to Collaborate with FASB on Multiemployer Disclosure
AGC participated in a constructive meeting of the Construction Industry FASB Coalition with the Financial Accounting Standards Board (FASB) to discuss the Board’s project to enhance financial disclosure standards for employers that contribute to multiemployer benefit plans.
The Coalition continues on a positive course of collaboration with the FASB to help achieve the Board’s goal of greater transparency and disclosure of multiemployer pension plan participation on audited financial statements of participating companies without the severe, negative collateral consequences for construction firms and their plans that was inherent in the original FASB exposure draft ED-715.
AGC was represented at the March 30 meeting by AGC Tax and Fiscal Affairs Committee Member Eric Wallace, CPA, of Carbis Walker, LLP, in Pittsburgh, Pa. The Tax and Fiscal Affairs Committee itself has had several discussions with the FASB on the multiemployer project and submitted formal comments in a letter to the Board on November 1, 2010.
The Coalition continues to provide in-depth and expert analysis of the many issues relating to withdrawal liability, the infeasibility of disclosures relating to retiree health coverage, and the unnecessary scope of other quantitative and qualitative disclosures FASB proposed that are inappropriate for multiemployer plans and the unique way they operate in the construction industry. The coalition is offering alternative disclosure approaches that achieve FASB”s objectives without the negative consequences inherent in the ED-715 as proposed.
The Coalition’s proposals have gained the endorsement of key players in the surety and commercial banking industries, such as Key Bank, Amalgamated Bank of Chicago, and the National Association of Surety Bond Producers. These financial statement user representatives have assessed the group’s proposed disclosure standard and judge it appropriate for adoption by the FASB, recognizing that it avoids the negative consequences that the Coalition has laid out, yet still provides information and references they need to conduct sound underwriting judgments. FASB has agreed to take the Coalition’s proposal under serious consideration for a possible recommendation among the options for the final Board vote.
The course of the FASB’s redeliberations on its original proposal is still being determined, and the Board has not yet decided whether it will re-expose another draft after redeliberations or publish a final standard. Action is still expected to take place by the end of the second quarter of this year. AGC and the Coalition will continue to monitor developments and reach out to the FASB with its in-depth expertise to help achieve an acceptable outcome.
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