The topic of pensions and other postretirement benefits was considered at length in an accounting theory class. The discussion centered on the following terms:
(a) Representational faithfulness
(b) Substance over form
(c) Verifiability
(d) Usefulness
(e) Present value
(f) Conservatism
(g) Adequate disclosure
How are these terms helpful in justifying the accounting for pension and other postretirement benefit plans on the employer’s books? Based on your understanding of these terms, assess the treatment of pension and other postretirement benefit plans by the FASB in Statement Nos. 87, 88, 106, and 158.