Summary
ATI Inc. (ATI) has filed an 8-K report detailing a voluntary change in its accounting method for recognizing actuarial gains and losses on its defined benefit pension plans. Effective from the fourth quarter of 2023, the company will now immediately recognize these gains and losses in its earnings through net periodic pension benefit cost. Previously, these were deferred and amortized over time. ATI believes this new method provides a more accurate and timely reflection of the pension plan's economic performance and its impact on the company's operating results, allowing for a clearer understanding of the current period's financial performance. This accounting change has been applied retrospectively. As of January 1, 2021, the change resulted in a cumulative decrease to retained earnings of $1.07 billion, offset by a corresponding increase in accumulated other comprehensive loss. To facilitate year-over-year comparisons, ATI has provided unaudited financial statements reflecting this change for fiscal years 2021, 2022, and the first nine months of 2023.
Key Highlights
- 1ATI Inc. voluntarily changed its accounting method for defined benefit pension plans' actuarial gains/losses, effective Q4 2023.
- 2Under the new method, actuarial gains and losses will be recognized immediately in earnings, rather than deferred and amortized.
- 3The company believes the new policy provides a better representation of operating results and economic performance of plan assets.
- 4The change resulted in a cumulative decrease to retained earnings of $1.07 billion as of January 1, 2021.
- 5Prior periods' financial information (FY 2021, FY 2022, and YTD Q3 2023) have been retrospectively adjusted to reflect this change.
- 6Updated unaudited financial statements and footnote information reflecting the accounting change have been furnished.