ASC

ASC 310-960

Plan Accounting—Defined Benefit Pension Plans

310 Receivables

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In brief

IntermediateRecognitionCompensation and benefitsIndustry-specificPresentation

This Subtopic governs when a defined benefit pension plan recognizes contributions receivable in its own financial statements. Amounts due at the reporting date from employers, participants, or other funding sources (separately identified) are recognized when supported by legal or contractual requirements or a formal commitment, net of an allowance for estimated uncollectible amounts. Unfunded prior service costs and any excess of the actuarial present value of accumulated plan benefits over net assets available for benefits are not plan receivables.

Key points (7)
  • Contributions receivable are amounts due as of the reporting date from employers, participants, or other sources of funding such as state subsidies or federal grants, which must be separately identified (310-960-25-1).
  • Amounts due include those arising from formal commitments as well as legal or contractual requirements; evidence of an employer's formal commitment includes a governing-body resolution, a consistent pattern of post-year-end payments under an established funding policy attributed to the preceding plan year, a federal tax deduction for periods ending on or before the reporting date, or the employer's recognition of a contribution payable (310-960-25-2).
  • The existence of accrued pension costs on the employer's books does not by itself support recognition of a contribution receivable, because employer measurement methods may differ from amounts formally committed (310-960-25-2(d)).
  • Funds from sources like federal revenue-sharing used for plan funding at the employer's discretion are, in effect, employer contributions and are reported as such; receipt shortly after year-end is additional evidence of a receivable, and an adequate allowance for estimated uncollectible amounts must be provided (310-960-25-3).
  • A multiemployer plan records a receivable for a withdrawing employer's share of the plan's unfunded liability, net of any allowance for uncollectible amounts, when entitlement has been determined (310-960-25-3A).
  • Unfunded prior service costs are not plan receivables because they are not due from the employer at the reporting date and are not a recordable resource until formally committed (310-960-25-4).
  • Any excess of the actuarial present value of accumulated plan benefits over net assets available for benefits (excluding contributions receivable) is not a plan asset unless legally, contractually, or by formal commitment due to the plan at the reporting date (310-960-25-4).

For students. This is plan-level (not employer-level) accounting: the plan is the reporting entity, so the question is whether the plan has a receivable, not whether the employer has a liability. The classic trap is assuming an employer's accrued pension cost or an unfunded benefit obligation automatically creates a plan receivable — it does not without a legal, contractual, or formal commitment.

contributions receivableformal commitmentdefined benefit pension plan financial statementsallowance for uncollectible amountsunfunded prior service costmultiemployer plan withdrawal liabilityaccumulated plan benefitsnet assets available for benefits

Machine-generated study aid for ASC 310-960. Check the source paragraphs below.

310-960-00Status

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310-960-00-1
The following table identifies the changes made to this Subtopic.
ParagraphActionAccounting Standards UpdateDate
Defined Benefit PlanAddedAccounting Standards Update No. 2014-0603/14/2014
Defined Benefit Pension Plan (1st def.)SupersededAccounting Standards Update No. 2014-0603/14/2014
Funding Policy (1st def.)SupersededAccounting Standards Update No. 2014-0603/14/2014
Funding Policy (3rd def.)AddedAccounting Standards Update No. 2014-0603/14/2014
Service (1st def.)SupersededAccounting Standards Update No. 2014-0603/14/2014
Service (2nd def.)AddedAccounting Standards Update No. 2014-0603/14/2014
960-310-05-1AmendedAccounting Standards Update No. 2014-0603/14/2014
960-310-25-2AmendedAccounting Standards Update No. 2014-0603/14/2014
960-310-25-4AmendedAccounting Standards Update No. 2014-0603/14/2014

310-960-05Overview and Background

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310-960-05-1
This Subtopic provides guidance on accounting for receivables for defined benefit pension plans.

310-960-15Scope and Scope Exceptions

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Overall Guidance

310-960-15-1
This Subtopic follows the same Scope and Scope Exceptions as outlined in the Overall Subtopic, see Section 960-10-15.

310-960-25Recognition

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Contributions Receivable

310-960-25-1
Contributions receivable are the amounts due as of the reporting date to the plan from any of the following:
  1. a
    Employer(s)
  2. b
    Participants
  3. c
    Other sources of funding (for example, state subsidies or federal grants—which shall be separately identified).
310-960-25-2
Amounts due include those pursuant to formal commitments as well as legal or contractual requirements. With respect to an employer's contributions, evidence of a formal commitment may include any of the following:
  1. a
    A resolution by the employer's governing body approving a specified contribution
  2. b
    A consistent pattern of making payments after the plan's year-end pursuant to an established funding policy that attributes such subsequent payments to the preceding plan year
  3. c
    A deduction of a contribution for federal tax purposes for periods ending on or before the reporting date
  4. d
    The employer's recognition as of the reporting date of a contribution payable to the plan. The existence of accrued pension costs does not, by itself, provide sufficient support for recognition of a contribution receivable. For various reasons, amounts recorded as accrued pension costs by an employer may differ from amounts formally committed to the plan. For example, the method used for measurement of periodic pension costs for the employer's financial statements may differ from the method used for determining the amount and incidence of employer contributions.
310-960-25-3
Funds from sources such as federal revenue-sharing programs that are used for plan funding purposes at the employer's discretion are, in effect, employer contributions and shall be reported as such. Receipt of formally committed amounts soon after the plan's year-end provides additional evidence of the existence of a receivable at year-end. An adequate allowance shall be provided for estimated uncollectible amounts.
310-960-25-3A
A multiemployer plan may also have a receivable for a withdrawing employer's share of the plan's unfunded liability. The plan should record the receivable, net of any allowance for an amount deemed uncollectible, when entitlement has been determined.

Unfunded Prior Service Costs

310-960-25-4
Unfunded prior service costs are not receivables of the plan because at the reporting date those amounts are not due from the employer(s). The employer(s) may or may not intend to eventually contribute amounts sufficient to eliminate the unfunded prior service costs. Until such payments are formally committed to the plan, unfunded prior service costs do not constitute a recordable resource of the plan. For similar reasons, any existing excess of the actuarial present value of accumulated plan benefits over the net assets available for benefits (excluding contributions receivable) is not a plan asset unless at the reporting date that amount is legally, contractually, or pursuant to a formal commitment due the plan.

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