US Airways 2003 Annual Report Download - page 47

Table of Contents
Recent Accounting and Reporting Developments
Effective December 8, 2003, the "Medicare Prescription Drug, Improvement and Modernization Act of 2003" (Medicare Prescription Drug Act), was
signed into law, which provides for a prescription drug benefit under Medicare (Part D) as well as a federal subsidy to sponsors of retiree health care benefit
plans that provide a benefit that is at least actuarially equivalent to Medicare Part D. The Company's defined benefit postretirement health care plans do
provide a prescription drug benefit.
The Financial Accounting Standards Board (FASB) issued FASB Staff Position 106-1, "Accounting and Disclosure Requirements Related to the
Medicare Prescription Drug, Improvement and Modernization Act of 2003" (FSP 106-1) on January 12, 2004. FSP 106-1 allowed companies to elect a one-
time deferral of the recognition of the effects of the Medicare Prescription Drug Act in accounting for its plan under SFAS 106, and in providing disclosures
related to the plan required by SFAS 132 (revised 2003) (see below). The FASB allowed the one-time deferral because of the accounting issues raised by the
Medicare Prescription Drug Act, in particular, the accounting for the federal subsidy that is not explicitly addressed in SFAS 106, and because uncertainties
exist regarding the direct effects of the Medicare Prescription Drug Act and its ancillary effects on plan participants.
For companies electing the one-time deferral, such deferral remains in effect until authoritative guidance on the accounting for the federal subsidy is
issued, or until certain other events, such as a plan amendment, settlement or curtailment, occur. The Company is currently evaluating the effects of the
Medicare Prescription Drug Act on its other postretirement benefit plan and its participants and has elected the one-time deferral. The accumulated
postretirement obligation or net periodic postretirement benefit cost for 2003 does not reflect the effects of the Medicare Prescription Drug Act on its other
postretirement plan. Additionally, once the specific authoritative guidance on the accounting for the federal subsidy is issued, such guidance could cause the
Company to change previously reported information.
On December 23, 2003, the FASB issued Statement of Financial Accounting Standards No. 132 (revised 2003), "Employers' Disclosures about
Pensions and Other Postretirement Benefits–an amendment of FASB Statements No. 87, 88 and 106" (SFAS 132 (revised 2003)). SFAS 132 (revised 2003) is
effective for fiscal years ending after December 15, 2003. Interim disclosure requirements under SFAS 132 (revised 2003) will be effective for interim
periods beginning after December 15, 2003, and required disclosures related to estimated benefit payments will be effective for fiscal years ending after June
15, 2004.
SFAS 132 (revised 2003) replaces the disclosure requirements in SFAS 87, SFAS 88 and SFAS 106. SFAS 132 (revised 2003) addresses disclosures
only and does not address measurement and recognition accounting for pension and postretirement benefits. SFAS 132 (revised 2003) requires additional
disclosures related to the description of plan assets including investment strategies, plan obligations, cash flows and net periodic benefit cost of defined
benefit pension and other defined benefit postretirement plans. Effective December 31, 2003, the Company adopted the disclosure requirements of SFAS No.
132 (revised 2003). See Note 7 to the Consolidated Financial Statements included in Item 8 of this report for such disclosures.
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