The following table identifies the changes made to this Subtopic.
The Compensation—Nonretirement Postemployment Benefits Topic provides guidance on
nonretirement postemployment benefits, including
termination benefits and
other postemployment benefits provided to former and
inactive employees. This Topic contains only the Overall Subtopic.
See Section
712-10-15 for links to other Topics in the Codification that provide guidance on termination benefits, such as the following:
- a
One-time termination benefits resulting from an exit or restructuring activity
- b
Termination benefits (for example, supplemental early retirement benefits, termination indemnities) paid through a pension or other postretirement plan.
Other postemployment benefits include all benefits listed in the following paragraph. These include benefits that are paid before retirement and not payable from a pension or other postretirement plan.
Generally, other postemployment benefits are part of the compensation provided to an employee in exchange for service.
The Scope Section of the Overall Subtopic establishes the pervasive scope for the Compensation—Nonretirement Postemployment Benefits Topic.
The guidance in the Compensation—Nonretirement Postemployment Benefits Topic applies to the following
nonretirement postemployment benefits:
- a
Special or contractual
termination benefits that are payable before retirement and are not payable from a pension or other postretirement plan.
- b
All types of other postemployment benefits provided to former or inactive employees, their beneficiaries, and covered dependents after employment but before retirement. Benefits may be provided in cash or in kind and may be paid as a result of a disability, layoff, death, or other event. Benefits may be paid immediately upon cessation of active employment or over a specified period of time. Employees' rights to benefits may accumulate or vest as they render service. See paragraph 710-10-25-1(b) for a description of the meaning of accumulate or vest.
As indicated in paragraph
420-10-05-4,
accounting for termination benefits granted in connection with an exit or disposal activity will differ depending on whether the benefits payable are considered an enhancement to an ongoing benefit arrangement, (covered by this Subtopic or Subtopics referenced in the preceding paragraph) or provided under a one-time termination arrangement covered by Topic 420. For guidance on making this determination, see paragraph 420-10-55-1 and Example 5 (paragraph 420-10-55-16). See Section
712-10-25 for guidance on initial measurement.
To the extent that similar issues apply to other postemployment benefit plans, employers may refer to Subtopics 715-30 and 715-60 for guidance in measuring their other postemployment obligations in compliance with the requirements of this Subtopic. As a result, the use of discounting in measuring other postemployment benefit obligations will continue to be permitted but not required.
For guidance on disclosure requirements related to special and contractual
termination benefits, see paragraph
715-20-50-1.