FASB 87

What Does FASB 87 Mean?

FASB 87 is a statement issued by the Financial Accounting Standards Board (FASB) that aimed to enhance pension reporting. After analyzing 130 reports, the Board provided recommendations for improvement based on a survey that concluded in December 1990.

Insuranceopedia Explains FASB 87

The survey revealed that the most popular pension plans, in order of preference, were as follows:

1. Defined benefit plan
2. Defined contribution plan
3. Multi-employer plan

The statement required companies using these plans to disclose the weighted average assumed discount rate and the rate of compensation. Among other requirements, it mandated the disclosure of underfunded pension plans and prohibited corporations from using deductions for tax purposes.