FASB at its Feb 13 meeting will consider proposals to improve disclosure of corporate pension plans hedge fund and alternative investment allocations, according to a statement from the Financial Accounting Standards Board. Staff research and constituent feedback have suggested that over the past few years the use of alternative investment instruments and vehicles such as derivatives and hedge funds have increased substantially, the statement said. Often, such assets are included in the other or debt categories and receive little to no discussion of risk exposure and usage, i.e., leverage vs. speculative purposes.
The risk exposure of plan assets may be improved by creating more robust guidance in complying with FASB rules, the statement said. Such changes may prompt more detailed disclosure through further disaggregation of asset categories and improved qualitative discussion about risk exposures in the asset portfolio.