Financial Accounting Standard No. 106 Since the adoption of the Financial Accounting Standard No. 106 (FAS 106) in the early 1990s, employers must accrue the future cost of post-employment health care benefits as a liability on their balance sheet. The amortization of this liability results in a non-cash charge against net income. This charge is in addition to the real cash expenses associated with both administering and funding these retiree medical plans. Even unfunded medical plans, like pensions, require annual cash outlays for making employer contributions and, in the case of self-funded retiree medical plans, paying claims and covering short falls. Financial Accounting Standard No. 158 Issued in September, 2006, FAS 158 requires employers to include obligations associated with single employer defined benefit pensions, retiree health plans and other post retirement plans in their financial statements. The new standard amends and replaces sections of previous standards, including FAS 106, which allowed employers to put retiree health benefit plan information in the notes section of a company's financial statements. FAS 158 also eliminates the practice of spreading gains and losses that occur during a specific year over several years. Previous standards allowed employers to delay recognition of certain changes in plan assets and obligations that affected the costs of providing such benefits. Effective December 15, 2006, a publicly traded company must: · Recognize in its statement of financial position an asset for a plan's over funded status or a liability for a plan's under   funded status. · Recognize changes in the funded status of a defined benefit postretirement plan in the year in which the   changes occur. · Measure a plan's assets and obligations which determine its funded status as of the end of the employer's fiscal year.