ASC 310-965
Plan Accounting—Health and Welfare Benefit Plans
310 Receivables
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This Subtopic governs receivables of health and welfare benefit plans, principally contributions receivable from employers and amounts due from insurance entities. Employer contributions are recognized only when supported by a formal commitment (e.g., a governing-body resolution, an established pattern of post-year-end funding, a tax deduction, or the employer's own recorded payable), and contributions receivable must carry an allowance for estimated uncollectible amounts. Deposits with insurance entities or service providers and premium stabilization reserves remain plan assets until applied against premiums or claims, and experience-rating refunds are recorded when probable and reasonably estimable.
Key points (7)
- Evidence of a formal commitment supporting recognition of an employer contribution receivable may include a governing-body resolution, a consistent pattern of post-plan-year payments under an established funding policy, a federal income tax deduction for periods ending on or before the financial statement date, or the employer's recognition of a contribution payable (310-965-25-1).
- An accrued liability on the employer's balance sheet, or benefit obligations exceeding the plan's net assets available for benefits, does not by itself support recognizing a contribution receivable by the plan (310-965-25-1(d)).
- Payments to an insurance entity must be analyzed to determine the extent to which financial risk has actually been transferred from the plan versus merely constituting a deposit; see Subtopic 340-30 (310-965-25-2).
- Deposits held by insurance entities and premium stabilization reserves are generally reported as plan assets until used to pay premiums, with forfeitability on contract termination considered in recognizing the asset (310-965-25-3); deposits with service providers are plan assets until applied against paid claims (310-965-40-1).
- An experience-rating refund due at the financial statement date is reported as a plan asset if a refund is probable and the amount can be reasonably estimated (310-965-25-3).
- Contributions receivable shall include an allowance for estimated uncollectible amounts (310-965-35-1) and shall be separately identified (310-965-45-1).
- Disclosure is required of the nature of payments to insurance entities for required loss deposits and premium stabilization reserves (310-965-50-1), and of the fact that an experience-rating refund cannot be reasonably estimated (310-965-50-2).
For students. Exam questions hinge on the fact that a plan cannot book a contribution receivable merely because the employer has an accrued liability or the plan is underfunded — objective evidence of a formal commitment is required. Also remember that deposits and premium stabilization reserves stay on the plan's books as assets until actually applied to premiums or claims.
Machine-generated study aid for ASC 310-965. Check the source paragraphs below.
310-965-00Status
Source downloaded: .Record version d12e66a38959. Effective date must be checked in the source.
| Paragraph | Action | Accounting Standards Update | Date |
| Plan Assets (1st def.) | Amended | Accounting Standards Update No. 2016-19 | 12/14/2016 |
| Plan Assets (1st def.) | Added | Accounting Standards Update No. 2014-06 | 03/14/2014 |
| 965-310-25-3 | Amended | Accounting Standards Update No. 2014-06 | 03/14/2014 |
| 965-310-40-1 | Amended | Accounting Standards Update No. 2014-06 | 03/14/2014 |
310-965-05Overview and Background
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310-965-15Scope and Scope Exceptions
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Overall Guidance
310-965-25Recognition
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Employer Contributions
- aA resolution by the employer's governing body approving a specified contribution
- bA consistent pattern of making payments after the end of the plan year, pursuant to an established funding policy that attributes such subsequent payments to the preceding plan year
- cA deduction of a contribution for federal income tax purposes for periods ending on or before the financial statement date
- dThe employer's recognition as of the financial statement date of a contribution payable to the plan. The existence of an accrued liability in the employer's statement of financial position or a plan's benefit obligations exceeding its net assets available for benefit obligations does not, by itself, provide sufficient support for recognition of a contribution receivable by the plan.
Premiums Paid to Insurance Entities
310-965-35Subsequent Measurement
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310-965-40Derecognition
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310-965-45Other Presentation Matters
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310-965-50Disclosure
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- aDeposits required to be maintained to be applied against future losses in excess of current premiums
- bPremium stabilization reserves.
Related subtopics
- 310-960 Plan Accounting—Defined Benefit Pension PlansReceivables
- 310-962 Plan Accounting—Defined Contribution Pension PlansReceivables
- 310-954 Health Care EntitiesReceivables
- 965-20 Net Assets Available for Plan BenefitsPlan Accounting—Health and Welfare Benefit Plans
- 715-70 Defined Contribution PlansCompensation—Retirement Benefits
- 965-10 OverallPlan Accounting—Health and Welfare Benefit Plans