USPS to announce Saturday service cuts in effort to slash costs

[Katashi_itto]

27. It's a 75 year current Liability

Assets=Liability + Equity

Meaning at the beginning of each fiscal year. The Post Office starts out. 5.5 billion in the hole. BEFORE you figure in interest expense and health care adjustments.

So they start in debt. One sec into the new year.

In financial accounting, a liability is defined as an obligation of an entity arising from past transactions or events, the settlement of which may result in the transfer or use of assets, provision of services or other yielding of economic benefits in the future.

"At the heart of the matter is a 2006 Congressional mandate put on the US Postal Service contained in the “Postal Accountability and Enhancement Act of 2006” to pre-fund healthcare benefits of future retirees, a 75 year liability over a 10 year period.

This provision costs the Postal Service $5.5 billion a year. When you add in an adjustment that was made in how workers’ compensation costs were calculated based on interest rate assumptions and long term predictions concerning health care and compensation of $2.5 billion (a non cash accounting adjustment), you come up with $8 billion in cost.

Actual loss was $500 million and when added, comes to the $8.5 billion reported for 2010. While $500 million is a lot, it doesn’t compare with $8.5 billion and is down from the previous year loss of $1 billion.

If you took out the onerous pre-funding mandate, the Postal Service actually shows a $700 million profit over the last four years instead of the $20 billion loss.

The Postal Union has been trying to get Congress to authorize the transfer of the Postal Service’s money estimated to be between $50 billion and $75 billion overpaid in the Civil Service Retirement System transferred into the PSRHBF."

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