# ASC 710-10-05: Compensation—General — Overall — 05 Overview and Background Source: FASB Accounting Standards Codification, Basic View [Read online](https://asc.understandingaccounting.org/asc/710/10/#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): 2026-09-10T00:57:14.093Z to 2026-09-10T00:57:14.093Z Record version: sha256:9ec6323649226513aedd0af7f292460ed812666a3105cd8c68bfe11e49ab3100 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 710-10-05: 05 Overview and Background [Read section](https://asc.understandingaccounting.org/asc/710/10/#05-overview-and-background) SEC content: no ##### [710-10-05-1](https://asc.understandingaccounting.org/asc/710/10/#710-10-05-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:57:14.093Z to 2026-09-10T00:57:14.093Z Record version: sha256:36c5f4ffcd522d1992ef53ea602f50a6d5b7539bffee2814cbb26bf77128559d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The Codification contains several Topics for compensation-related costs. The Topics include: 1. a Compensation—General 2. b Compensation—Nonretirement Postemployment Benefits 3. c Compensation—Retirement Benefits 4. d Compensation—Stock Compensation. ##### [710-10-05-2](https://asc.understandingaccounting.org/asc/710/10/#710-10-05-2) Pending content: no Source downloaded (UTC): 2026-09-10T00:57:14.093Z to 2026-09-10T00:57:14.093Z Record version: sha256:4091eed37555a7d6e81cda2ce6f5b369f4fe70298522160b521278418262eebc Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Topic (Compensation—General) contains only the Overall Subtopic and provides guidance on general compensation-related matters that are not within the scope of the Topics noted in the preceding paragraph. ##### [710-10-05-3](https://asc.understandingaccounting.org/asc/710/10/#710-10-05-3) Pending content: no Source downloaded (UTC): 2026-09-10T00:57:14.093Z to 2026-09-10T00:57:14.093Z Record version: sha256:19bc6c936abd20a927c63c14fb263a5a6200bd4880f3754475c50fb14164a0ee Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The Overall Subtopic contains the following two Subsections to segregate the guidance: 1. a General 2. b Deferred Compensation—Rabbi Trusts. ##### [710-10-05-4](https://asc.understandingaccounting.org/asc/710/10/#710-10-05-4) Pending content: no Source downloaded (UTC): 2026-09-10T00:57:14.093Z to 2026-09-10T00:57:14.093Z Record version: sha256:0e9fccf587c2c18a52bfd7ca89324cc947151651683410547d9743c977aafda2 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The General Subsections provide guidance on the following: 1. a Compensated absences 2. b Deferred compensation arrangements 3. c Lump-sum payments under union contracts. #### Compensated Absences ##### [710-10-05-5](https://asc.understandingaccounting.org/asc/710/10/#710-10-05-5) Pending content: no Source downloaded (UTC): 2026-09-10T00:57:14.093Z to 2026-09-10T00:57:14.093Z Record version: sha256:c93905dca51a7fceff1e3877b800fbe98f90ccb162b070575da17cce902c8099 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The General Subsections of this Subtopic provide guidance for accruing a liability for employees' rights to receive compensation for future absences when certain conditions are met, for example, vacation benefits, future sick pay benefits, holidays, certain sabbatical leaves and similar compensated absences. #### Deferred Compensation Arrangements ##### [710-10-05-6](https://asc.understandingaccounting.org/asc/710/10/#710-10-05-6) Pending content: no Source downloaded (UTC): 2026-09-10T00:57:14.093Z to 2026-09-10T00:57:14.093Z Record version: sha256:f3b00367d9b60a8edb2d10504df0d51f48974c46a802f597f75d521631446e93 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The General Subsections of this Subtopic provide guidance on deferred compensation arrangements that are individual employment contracts and are not in substance a pension or other postretirement benefit plan as described in paragraph [715-10-15-3](https://asc.understandingaccounting.org/asc/715/10/#715-10-15-3). #### Lump-Sum Payments Under Union Contracts ##### [710-10-05-7](https://asc.understandingaccounting.org/asc/710/10/#710-10-05-7) Pending content: no Source downloaded (UTC): 2026-09-10T00:57:14.093Z to 2026-09-10T00:57:14.093Z Record version: sha256:d1379620ad358733213a647d8b1da99bb0f3bc0a83b881cfce30a7772860925a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The General Subsections of this Subtopic provide recognition guidance for lump-sum payments received by union employees upon signing new union contracts. ### Deferred Compensation—Rabbi Trusts ##### [710-10-05-8](https://asc.understandingaccounting.org/asc/710/10/#710-10-05-8) Pending content: no Source downloaded (UTC): 2026-09-10T00:57:14.093Z to 2026-09-10T00:57:14.093Z Record version: sha256:0c915cd13b6784b25036a085df7533981e8adf25f5aad2010c106afd2f2c0bc3 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The Deferred Compensation—Rabbi Trusts Subsections of this Subtopic address the accounting for deferred compensation arrangements where amounts earned by an employee are invested in the stock of the employer and placed in a [rabbi trust](https://asc.understandingaccounting.org/glossary/r/#rabbi-trusts "Rabbi trusts are grantor trusts generally set up to fund compensation for a select group of management or highly paid executives. To qualify as a rabbi trust for income tax purposes, the terms of the trust agreement must explicitly state that the assets of the trust are available to satisfy the claims of general creditors in the event of bankruptcy of the employer."). Certain of those plans allow the employee to immediately diversify into nonemployer securities or to diversify after a holding period (for example, six months); other plans do not allow for diversification. ##### [710-10-05-9](https://asc.understandingaccounting.org/asc/710/10/#710-10-05-9) Pending content: no Source downloaded (UTC): 2026-09-10T00:57:14.093Z to 2026-09-10T00:57:14.093Z Record version: sha256:84b96eb8ea4de76c8790435ee79930319c7257016ff6ca57797e790b71d0c109 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The deferred compensation obligation of some plans may be settled in any of the following: 1. a Cash, by having the trust sell the employer stock (or the diversified assets) in the open market 2. b Shares of the employer's stock 3. c Diversified assets. In other plans, the deferred compensation obligation may be settled only by delivery of the shares of the employer stock.