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Postretirement health benefits: Do your trend rate estimates significantly affect postretirement costs and reported net income?
Author(s) -
Newell Gale E.,
Langsam Sheldon A.,
Kreuze Jerry G.
Publication year - 1997
Publication title -
journal of corporate accounting and finance
Language(s) - English
Resource type - Journals
eISSN - 1097-0053
pISSN - 1044-8136
DOI - 10.1002/jcaf.3970080409
Subject(s) - affect (linguistics) , net income , health care , business , demographic economics , health care cost , actuarial science , economics , economic growth , finance , psychology , communication
How important is the accuracy of your health care cost trend estimates'? For most companies, the difference between the assumed health care cost trend rate and the actual increase may not largely affect postretirement cost and reported net income. But the authors found that for some companies the variation in rates can have significant impact. The authors believe that the FASB should consider providing companies with estimated health care cost trend rates.