U.S. companies carry an ominous obligation that they have never really acknowledged on their books: the health-care benefits promised to retirees. Unlike pension plans, which are backed by investment funds, companies usually pay for retiree health-insurance costs as they occur.
But last week the Financial Accounting Standards Board said that by 1992 companies should put these obligations on their balance sheets. For starters, firms will have to declare the $200 billion or more they already owe to retired workers.
Corporate executives argue that FASB is trying to reform the system too rapidly. The accounting change could slash earnings at some firms...
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