{"schema_version":2,"canonical_url":"https://asc.understandingaccounting.org/asc/205/965/#10-objectives","source":"FASB Accounting Standards Codification, Basic View","usage":"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.","topic":"205","topic_title":"Presentation of Financial Statements","subtopic":"205-965","subtopic_title":"Plan Accounting—Health and Welfare Benefit Plans","section":{"number":"10","label":"10 Objectives","anchor":"10-objectives","is_sec":false,"groups":[{"block":null,"heading":"Defined Benefit Health and Welfare Plans","paragraphs":[{"citation":"205-965-10-1","para":"10-1","html":"<div class=\"asc-body\"><div class=\"norm-text\"><span class=\"sfragment\" id=\"sfr_20A669FC-6E94-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">The objective of financial reporting by <a href=\"/glossary/d/#defined-benefit-plan\" class=\"term\" title=\"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.)\"><span>defined benefit health and welfare plans</span></a> is the same as that of defined benefit pension plans; both types of plans provide a determinable benefit. </span></span><span class=\"sfragment\" id=\"sfr_20A66B39-6E94-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">Accordingly, the primary objective of the financial statements of a defined benefit health and welfare plan is to provide financial information that is useful in assessing the plan's present and future ability to pay its benefit obligations when due. </span></span><span class=\"sfragment\" id=\"sfr_20A66C63-6E94-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">To accomplish that objective, a plan's financial statements shall provide information about all of the following: </span></span><ol class=\"ol-norm\"><li class=\"li-norm\"><span class=\"linum\">a</span><div class=\"p\"><span class=\"sfragment\" id=\"sfr_20A66D51-6E94-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">Plan resources and the manner in which the stewardship responsibility for those resources has been discharged </span></span></div></li><li class=\"li-norm\"><span class=\"linum\">b</span><div class=\"p\"><span class=\"sfragment\" id=\"sfr_20A66E30-6E94-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">Benefit obligations </span></span></div></li><li class=\"li-norm\"><span class=\"linum\">c</span><div class=\"p\"><span class=\"sfragment\" id=\"sfr_20A66F0D-6E94-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">The results of transactions and events that affect the information about those resources and obligations </span></span></div></li><li class=\"li-norm\"><span class=\"linum\">d</span><div class=\"p\"><span class=\"sfragment\" id=\"sfr_20A66FE8-6E94-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">Other factors necessary for users to understand the information provided. </span></span></div></li></ol></div></div>","snippet":"The objective of financial reporting by defined benefit health and welfare plans is the same as that of defined benefit pension plans; both types of plans provide a determinable benefit. Accordingly, the primary objectiv…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:f328a08a15833af2d507c68a207c031113789d7b5930ccf300c37eec5da8c48b","downloaded_from":"2026-09-09T22:57:42.854Z","last_downloaded_at":"2026-09-09T22:57:42.854Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478805","source_sha256":"f53110b42d5d2d74250e45592414bc5261de9dc661a91141c1631fd270354f9d"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:f61c300d0f867fe66bcc4a16fa4403807d9de408b1aca8286d90be6a577d4369","downloaded_from":"2026-09-09T22:57:42.854Z","last_downloaded_at":"2026-09-09T22:57:42.854Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478805","source_sha256":"f53110b42d5d2d74250e45592414bc5261de9dc661a91141c1631fd270354f9d"}},{"block":null,"heading":"Defined Contribution Health and Welfare Plans","paragraphs":[{"citation":"205-965-10-2","para":"10-2","html":"<div class=\"asc-body\"><div class=\"norm-text\"><span class=\"sfragment\" id=\"sfr_20A670CC-6E94-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">The objective of financial reporting by a <a href=\"/glossary/d/#defined-contribution-plan\" class=\"term\" title=\"A plan that provides an individual account for each participant and provides benefits that are based on all of the following: amounts contributed to the participant's account by the employer or employee; investment experience; and any forfeitures allocated to the account, less any administrative expenses charged to the plan. Defined contribution health and welfare plans—Defined contribution health and welfare plans maintain an individual account for each plan participant. They have terms that specify the means of determining the contributions to participants' accounts, rather than the amount of benefits the participants are to receive. The benefits a plan participant will receive are limited to the amount contributed to the participant's account, investment experience, expenses, and any forfeitures allocated to the participant's account. These plans also include flexible spending arrangements. Defined contribution postretirement plan—A plan that provides postretirement benefits in return for services rendered, provides an individual account for each plan participant, and specifies how contributions to the individual's account are to be determined rather than specifies the amount of benefits the individual is to receive. Under a defined contribution postretirement plan, the benefits a plan participant will receive depend solely on the amount contributed to the plan participant's account, the returns earned on investments of those contributions, and the forfeitures of other plan participants' benefits that may be allocated to that plan participant's account.\"><span>defined contribution health and welfare plan</span></a> is to provide financial information that is useful in assessing the plan's present and future ability to pay its benefits. </span></span><span class=\"sfragment\" id=\"sfr_20A671A4-6E94-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">To accomplish that objective, a plan's financial statements shall provide information about all of the following: </span></span><ol class=\"ol-norm\"><li class=\"li-norm\"><span class=\"linum\">a</span><div class=\"p\"><span class=\"sfragment\" id=\"sfr_20A67275-6E94-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">Plan resources and the manner in which the stewardship responsibility for those resources has been discharged </span></span></div></li><li class=\"li-norm\"><span class=\"linum\">b</span><div class=\"p\"><span class=\"sfragment\" id=\"sfr_20A67348-6E94-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">The results of transactions and events that affect the information about those resources </span></span></div></li><li class=\"li-norm\"><span class=\"linum\">c</span><div class=\"p\"><span class=\"sfragment\" id=\"sfr_20A67410-6E94-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">Other factors necessary for users to understand the information provided. </span></span><span class=\"sfragment\" id=\"sfr_20A674DC-6E94-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">For example vacation, holiday, and legal are typical plans whose benefits are limited to the balance in the participant's accounts.</span></span></div></li></ol></div></div>","snippet":"The objective of financial reporting by a defined contribution health and welfare plan is to provide financial information that is useful in assessing the plan's present and future ability to pay its benefits. To accompl…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:6e9a605db99de5ed053cf66842ad25b472a15ea2e0e741fc33e527090c88d4b2","downloaded_from":"2026-09-09T22:57:42.854Z","last_downloaded_at":"2026-09-09T22:57:42.854Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478805","source_sha256":"f53110b42d5d2d74250e45592414bc5261de9dc661a91141c1631fd270354f9d"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:0209d91d6dbcb5957f31154aad50b80c9e59af8fe2f1bad2f0b05b590df2de3b","downloaded_from":"2026-09-09T22:57:42.854Z","last_downloaded_at":"2026-09-09T22:57:42.854Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478805","source_sha256":"f53110b42d5d2d74250e45592414bc5261de9dc661a91141c1631fd270354f9d"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:56d574585b3be796c971b5620a506645b1c34125c21654299402fc479a0de430","downloaded_from":"2026-09-09T22:57:42.854Z","last_downloaded_at":"2026-09-09T22:57:42.854Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478805","source_sha256":"f53110b42d5d2d74250e45592414bc5261de9dc661a91141c1631fd270354f9d"}},"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:56d574585b3be796c971b5620a506645b1c34125c21654299402fc479a0de430","downloaded_from":"2026-09-09T22:57:42.854Z","last_downloaded_at":"2026-09-09T22:57:42.854Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147478805","source_sha256":"f53110b42d5d2d74250e45592414bc5261de9dc661a91141c1631fd270354f9d"}}