If the decision of International Paper, the world’s largest pulp and paper companies, for example, if the provisions of Statement of Financial Accounting Standards 106 (SFAS 106) issued, “Employers’ Accounting for pension benefits other than pensions.” SFAS 106 requires the generation of a significant balance sheet liability for the future cost of the promises to pay employees to recognize for retirement benefits, especially for health insurance benefits. Compared to the pr … Read more »

If the decision of International Paper, the world’s largest pulp and paper companies, for example, if the provisions of Statement of Financial Accounting Standards 106 (SFAS 106) issued, “Employers’ Accounting for pension benefits other than pensions.” SFAS 106 requires the generation of a significant balance sheet liability for the future cost of the promises to pay employees to recognize for retirement benefits, especially for health insurance benefits. Compared with the prevailing “pay-as-you-go” accounting, the provisions of SFAS 106 generally require a higher annual cost of “plans” (OPEB). Set in late November 1992 after the Financial Accounting Standards Board (FASB) announced a year, the final form of SFAS 106 The application of the new rules was effective for fiscal years after 15 December 1992 is required, but as usual an earlier application is encouraged. In addition to the adoption of the new standard, the companies were able either to recognize the liability for vested rights immediately or gradually over a period of up to twenty years. Has been enacted with the decisions of both IP, when and how faced with SFAS 106.
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from
Mary E. Barth,
Charles A. Nichols
Source: Harvard Business School
10 pages.
Release Date: 2 November 1992. Prod #: 193060-PDF-ENG
International Paper (A) HBR case solution

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