# ASC 205-960-05: Presentation of Financial Statements — Plan Accounting—Defined Benefit Pension Plans — 05 Overview and Background

Source: FASB Accounting Standards Codification, Basic View

[Read online](https://asc.understandingaccounting.org/asc/205/960/#05-overview-and-background)

Study and research edition. Verify current requirements with the official source. Summaries, enrichment, and tags are machine-generated study aids. Paragraph html preserves source markup; snippet is abbreviated. Pending content is not necessarily effective.

Tables and mathematical or amendment markup are retained as HTML where Markdown would lose structure.

Source downloaded (UTC): 2026-09-09T22:56:36.349Z to 2026-09-09T22:56:36.349Z

Record version: sha256:a74de38f45cdc4360c6ca7c3fb3002d13599d4be54949d0f2835f9824fbbb955

Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f

Effective as of: not established by retrieval timestamps.


## ASC 205-960-05: 05 Overview and Background

[Read section](https://asc.understandingaccounting.org/asc/205/960/#05-overview-and-background)

SEC content: no

##### [205-960-05-1](https://asc.understandingaccounting.org/asc/205/960/#205-960-05-1)

Pending content: no

Source downloaded (UTC): 2026-09-09T22:56:36.349Z to 2026-09-09T22:56:36.349Z

Record version: sha256:e84c262412b0a364c7fd6e49ad65f22edb56b28fc98fa5b36a98cec206d5162c

Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f

Effective as of: not established by retrieval timestamps.


This Subtopic provides guidance on the presentation of financial statements for [defined benefit pension plans](https://asc.understandingaccounting.org/glossary/d/#defined-benefit-plan "A defined benefit plan provides participants with a determinable benefit based on a formula provided for in the plan. Defined benefit health and welfare plans—Defined benefit health and welfare plans specify a determinable benefit, which may be in the form of a reimbursement to the covered plan participant or a direct payment to providers or third-party insurers for the cost of specified services. Such plans may also include benefits that are payable as a lump sum, such as death benefits. The level of benefits may be defined or limited based on factors such as age, years of service, and salary. Contributions may be determined by the plan's actuary or be based on premiums, actual claims paid, hours worked, or other factors determined by the plan sponsor. Even when a plan is funded pursuant to agreements that specify a fixed rate of employer contributions (for example, a collectively bargained multiemployer plan), such a plan may nevertheless be a defined benefit health and welfare plan if its substance is to provide a defined benefit. Defined benefit pension plan—A pension plan that defines an amount of pension benefit to be provided, usually as a function of one or more factors such as age, years of service, or compensation. Any pension plan that is not a defined contribution pension plan is, for purposes of Subtopic 715-30, a defined benefit pension plan. Defined benefit postretirement plan—A plan that defines postretirement benefits in terms of monetary amounts (for example, $100,000 of life insurance) or benefit coverage to be provided (for example, up to $200 per day for hospitalization, or 80 percent of the cost of specified surgical procedures). Any postretirement benefit plan that is not a defined contribution postretirement plan is, for purposes of Subtopic 715-60, a defined benefit postretirement plan. (Specified monetary amounts and benefit coverage are collectively referred to as benefits.)").

##### [205-960-05-2](https://asc.understandingaccounting.org/asc/205/960/#205-960-05-2)

Pending content: no

Source downloaded (UTC): 2026-09-09T22:56:36.349Z to 2026-09-09T22:56:36.349Z

Record version: sha256:e061ceb10eaff3925b1b586da7f0070ae54b91e8694ef2a79423e3112ee8a95b

Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f

Effective as of: not established by retrieval timestamps.


To enhance their usefulness, [plan administrators](https://asc.understandingaccounting.org/glossary/p/#plan-administrator "The person or group of persons responsible for the content and issuance of a plan's financial statements in much the same way that management is responsible for the content and issuance of a business entity's financial statements.") may wish to supplement the financial statements with a brief explanation that highlights those matters expected to be of most interest to participants. Including summary financial information for a period of years in such supplementary information, and thereby disclosing trends, may also be helpful. With the information presented in plan financial statements, users can assess the extent to which the plan itself is able to pay participants' [benefits](https://asc.understandingaccounting.org/glossary/b/#benefits "The monetary or in-kind benefits or benefit coverage to which participants may be entitled under a pension plan or a health and welfare plan (which can include active, terminated, and retired employees or their dependents or beneficiaries). Examples of benefits may include, but are not limited to, health care benefits, life insurance, legal, educational, and advisory services, pension benefits, disability benefits, death benefits, and benefits due to termination of employment.") and the extent to which payment of benefits is dependent on other factors, namely, the commitment and financial ability of the employer(s), and, for Employee Retirement Income Security Act plans, the security provided by the Pension Benefit Guaranty Corporation.