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In some cases, particularly at old industrial companies like automakers, the newly disclosed obligations are likely to be so large that they will wipe out the net worth of the company.
"If actual Wall Street and oil industry misdeeds did not exist, politicians would have to invent them, so as to distract the public from what they have created, a leviathan of poorly disclosed obligations, which are 10 times the cost of all wars since the American Revolution," the crafty, wise Cembalest writes in his July 21 "Eye on the Market" investment letter.
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Finally, Mr. Demario said, the proposed amendments would also require sponsors to disclose obligations imposed upon the sponsor by construction lenders.
McKesson disclosed that obligation in its latest proxy statement, though it said it had accounted for only about $35 million of it.
GM's liability is $20.2 billion; Chrysler, which is privately held by Cerberus Capital Management, hasn't disclosed its obligation.
Defence firms have lobbied successfully for offsets to remain classified as "proprietary", so they do not have to disclose their obligations.
The states and the largest cities will have to disclose the obligations for the first time in financial reports for their 2007 fiscal years.
Auditors and ratings agencies will then have to decide whether to sign off on their financial statements, or penalize the governments for failing to disclose significant obligations.
Nonetheless, Robert Wilkins, a senior project manager for the accounting board, said the board had heard reports that companies had not been disclosing contingent obligations if they deemed it unlikely that they would have to pay.
Cities, states and the millions of Americans who work for them will soon face new accounting rules that will require many local governments to disclose pension obligations that were hidden until now, stepping up the pressure to rein in public workers' benefits.
Still, all of this raises the question: At what point do you have a moral obligation to disclose your indebtedness during courtship?
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com