ASC

ASC 360-965

Plan Accounting—Health and Welfare Benefit Plans

360 Property, Plant, and Equipment

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In brief

IntermediateSubsequent measurementInventory and PP&EFair valueCompensation and benefits

This subtopic tells health and welfare benefit plans how to measure property, plant, and equipment on the plan's financial statements. Assets used in plan operations (buildings, equipment, furniture and fixtures, leasehold improvements) are carried at cost less accumulated depreciation or amortization, while real estate and other holdings held as plan investments are reported at fair value less costs to sell, if significant, as of the financial statement date.

Key points (5)
  • Plan assets used in plan operations are reported at cost less accumulated depreciation or amortization (360-965-35-1).
  • Assets used in operations may include buildings, equipment, furniture and fixtures, and leasehold improvements (360-965-35-1(a)-(d)).
  • Plan investments in real estate or other investments (excluding insurance contracts) are reported at fair value less costs to sell, if significant, at the financial statement date (360-965-35-2).
  • Accounting for other investments, particularly investment and insurance contracts, is addressed in Subtopic 965-325 (360-965-35-3).
  • The scope of this Subtopic follows Section 965-10-15, the Overall Subtopic's scope and scope exceptions (360-965-15-1).

For students. The exam trap is the split measurement model: the same asset class (e.g., a building) is carried at depreciated cost if the plan uses it to run operations, but at fair value less costs to sell if the plan holds it as an investment. Ask what the asset is used for, not what it is.

health and welfare benefit planassets used in plan operationscost less accumulated depreciationplan investmentsfair value less costs to sellreal estate investmentsinsurance contractsleasehold improvements

Machine-generated study aid for ASC 360-965. Check the source paragraphs below.

360-965-00Status

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360-965-00-1
The following table identifies the changes made to this Subtopic.
ParagraphActionAccounting Standards UpdateDate
Fair Value (2nd def.)SupersededAccounting Standards Update No. 2012-0410/01/2012
Fair ValueAddedAccounting Standards Update No. 2012-0410/01/2012
Plan Assets (1st def.)AmendedAccounting Standards Update No. 2016-1912/14/2016
Plan Assets (1st def.)AddedAccounting Standards Update No. 2014-0603/14/2014
965-360-35-1AmendedAccounting Standards Update No. 2014-0603/14/2014
965-360-35-2AmendedAccounting Standards Update No. 2012-0410/01/2012

360-965-05Overview and Background

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360-965-05-1
This Subtopic provides guidance on property, plant, and equipment for health and welfare benefit plans.

360-965-15Scope and Scope Exceptions

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Overall Guidance

360-965-15-1
This Subtopic follows the same Scope and Scope Exceptions as outlined in the Overall Subtopic, see Section 965-10-15.

360-965-35Subsequent Measurement

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360-965-35-1
Plan assets used in plan operations shall be reported at cost less accumulated depreciation or amortization and may consist of any of the following:
  1. a
    Buildings
  2. b
    Equipment
  3. c
    Furniture and fixtures
  4. d
    Leasehold improvements.
360-965-35-2
Plan investments in the form of real estate or other investments (excluding insurance contracts), shall be reported at their fair value less costs to sell, if significant, at the financial statement date.
360-965-35-3
See Subtopic 965-325 for guidance on accounting for other investments, in particular investment and insurance contracts, of health and welfare benefit plans.

Related subtopics