15 Jun 1.Defend  the current GAAP rules for pension accounting report

1.Defend  the current GAAP rules for pension accounting reporting on the balance  sheet and the income statement. Recommend a change you would make to the  current pension accounting to more accurately reflect the future  obligations of a company. 2.  CASE “Will  it cost your company your company? Ready for one of the most difficult  challenges ever to confront corporate America? One that is estimated to  cost up to $400 billion. New FASB regulations will force companies to  measure and post as a debit their health expense obligation to current  and future retirees…. We’ll help you minimize the financial impact of  these regulations and still enable you to remain responsive to the  benefit needs of employees.” (Excerpts from an advertise- ment by CIGNA,  a large insurance company.) “Forget about retiring with all-expenses-paid health care from your  employer. About 65% of U.S. companies have reduced benefits. Some have  asked retirees to pay more of the costs, while others have eliminated  the plans altogether. Blame soaring medical expenses and a new  accounting rule that requires companies to post long-term re- tiree  medical benefits as liabilities on their balance sheets.” (Adapted from  BusinessWeek, August 24, 1992, p. 39.) QUESTION #2. Evaluate the content of the advertisement and explain why companies may have reduced benefits when they adopted new GAAP