# ASC 715-30-05: Compensation—Retirement Benefits — Defined Benefit Plans—Pension — 05 Overview and Background Source: FASB Accounting Standards Codification, Basic View [Read online](https://asc.understandingaccounting.org/asc/715/30/#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): 2026-09-10T00:59:53.143Z to 2026-09-10T00:59:53.143Z Record version: sha256:685d8efa06b5e4fcf8a608307118079635d2cea242d1854725ebae5d292dc0f7 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 715-30-05: 05 Overview and Background [Read section](https://asc.understandingaccounting.org/asc/715/30/#05-overview-and-background) SEC content: no ##### [715-30-05-1](https://asc.understandingaccounting.org/asc/715/30/#715-30-05-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:59:53.143Z to 2026-09-10T00:59:53.143Z Record version: sha256:1c1c96bb5d2480ce1d2e832e01d7a4ade08872ce54585b36e48cf7f227fa181f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subtopic provides guidance on defined benefit pension accounting for an employer that offers [pension benefits](https://asc.understandingaccounting.org/glossary/p/#pension-benefits "Periodic (usually monthly) payments made pursuant to the terms of the pension plan to a person who has retired from employment or to that person's beneficiary.") to its employees. This Subtopic focuses on an employer's accounting for a single-employer [defined benefit pension plan](https://asc.understandingaccounting.org/glossary/d/#defined-benefit-plan "A defined benefit plan provides participants with a determinable benefit based on a formula provided for in the plan. Defined benefit health and welfare plans—Defined benefit health and welfare plans specify a determinable benefit, which may be in the form of a reimbursement to the covered plan participant or a direct payment to providers or third-party insurers for the cost of specified services. Such plans may also include benefits that are payable as a lump sum, such as death benefits. The level of benefits may be defined or limited based on factors such as age, years of service, and salary. Contributions may be determined by the plan's actuary or be based on premiums, actual claims paid, hours worked, or other factors determined by the plan sponsor. Even when a plan is funded pursuant to agreements that specify a fixed rate of employer contributions (for example, a collectively bargained multiemployer plan), such a plan may nevertheless be a defined benefit health and welfare plan if its substance is to provide a defined benefit. Defined benefit pension plan—A pension plan that defines an amount of pension benefit to be provided, usually as a function of one or more factors such as age, years of service, or compensation. Any pension plan that is not a defined contribution pension plan is, for purposes of Subtopic 715-30, a defined benefit pension plan. Defined benefit postretirement plan—A plan that defines postretirement benefits in terms of monetary amounts (for example, $100,000 of life insurance) or benefit coverage to be provided (for example, up to $200 per day for hospitalization, or 80 percent of the cost of specified surgical procedures). Any postretirement benefit plan that is not a defined contribution postretirement plan is, for purposes of Subtopic 715-60, a defined benefit postretirement plan. (Specified monetary amounts and benefit coverage are collectively referred to as benefits.)"). ##### [715-30-05-2](https://asc.understandingaccounting.org/asc/715/30/#715-30-05-2) Pending content: no Source downloaded (UTC): 2026-09-10T00:59:53.143Z to 2026-09-10T00:59:53.143Z Record version: sha256:1cdbb09b62dafb87f7c28ac827d89f538ea7505347f7619419ef6389604623c0 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Many of the provisions in this Subtopic are the same as or are similar to the provisions of Subtopic 715-60. Consequently, the guidance provided in that Subtopic may be useful in understanding and implementing many of the provisions of this Subtopic. However, there are differences between the specific requirements of the two Subtopics, and therefore the specific guidance in one Subtopic should not be used to override guidance of the other. ##### [715-30-05-3](https://asc.understandingaccounting.org/asc/715/30/#715-30-05-3) Pending content: no Source downloaded (UTC): 2026-09-10T00:59:53.143Z to 2026-09-10T00:59:53.143Z Record version: sha256:91d5b224bbd00eaa4dd38700db1b0cde62e3c9f252527938520041c3a75da8cd Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The guidance in this Subtopic is presented in the following two Subsections: 1. a General 2. b Settlements, Curtailments, and Certain Termination [Benefits](https://asc.understandingaccounting.org/glossary/b/#benefits "The monetary or in-kind benefits or benefit coverage to which participants may be entitled under a pension plan or a health and welfare plan (which can include active, terminated, and retired employees or their dependents or beneficiaries). Examples of benefits may include, but are not limited to, health care benefits, life insurance, legal, educational, and advisory services, pension benefits, disability benefits, death benefits, and benefits due to termination of employment."). ##### [715-30-05-4](https://asc.understandingaccounting.org/asc/715/30/#715-30-05-4) Pending content: no Source downloaded (UTC): 2026-09-10T00:59:53.143Z to 2026-09-10T00:59:53.143Z Record version: sha256:601000335a224c835ccad7a00537ed9bc3f838b914cab4d7188afea4929d27a7 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The General Subsections address the fundamentals of defined benefit pension accounting. A pension benefit is part of the compensation paid to an employee for services. Generally, the amount of benefit to be paid depends on a number of future events that are incorporated in the [plan's benefit formula](https://asc.understandingaccounting.org/glossary/p/#pension-benefit-formula "The basis for determining payments to which participants may be entitled under a pension plan. Pension benefit formulas usually refer to the employee's service or compensation or both. Sometimes referred to as a plan's benefit formula or benefit formula."), often including how long the employee and any survivors live, how many years of [service](https://asc.understandingaccounting.org/glossary/s/#service "Employment taken into consideration under a pension plan. Years of employment before the inception of a plan constitute an employee's past service; years thereafter are classified in relation to the particular actuarial valuation being made or discussed. Years of employment (including past service) before the date of a particular valuation constitute prior service; years of employment following the date of the valuation constitute future service; a year of employment adjacent to the date of valuation, or in which such date falls, constitutes current service.") the employee renders, and the employee's compensation in the years immediately before retirement or termination.Conceptually, compensation cost should be recognized in the period in which the employee renders services. Although the complexity and uncertainty of the pension arrangement may preclude complete achievement of that goal, a fundamental objective of this Subtopic is to approximate more closely the recognition of the compensation cost of an employee's pension benefits over that employee's service period. ##### [715-30-05-5](https://asc.understandingaccounting.org/asc/715/30/#715-30-05-5) Pending content: no Source downloaded (UTC): 2026-09-10T00:59:53.143Z to 2026-09-10T00:59:53.143Z Record version: sha256:014c5568d73c66437b15f79b38850f3b41fa3ef916ff434fe4403a14359aa936 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2017-07](https://asc.understandingaccounting.org/updates/asu-2017-07/). ##### [715-30-05-6](https://asc.understandingaccounting.org/asc/715/30/#715-30-05-6) Pending content: no Source downloaded (UTC): 2026-09-10T00:59:53.143Z to 2026-09-10T00:59:53.143Z Record version: sha256:b2c603f2e037ac723c18b9ead86e8419fa99b98ad5dbf417d97813e73676cd1e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The core elements of pension accounting include measurement of net periodic pension cost and benefit obligations (see paragraphs [715-30-35-1A through 35-41](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-1A) ), assumptions (see paragraphs [715-30-35-42 through 35-49](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-42) ), and measurement of plan assets (see paragraphs [715-30-35-50 through 35-52](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-50) ). ##### [715-30-05-7](https://asc.understandingaccounting.org/asc/715/30/#715-30-05-7) Pending content: no Source downloaded (UTC): 2026-09-10T00:59:53.143Z to 2026-09-10T00:59:53.143Z Record version: sha256:49d1fa29aa7987bee8388070d913daad6b1dc6d8fea0ba25ce5d908d4959906c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2017-07](https://asc.understandingaccounting.org/updates/asu-2017-07/). ##### [715-30-05-8](https://asc.understandingaccounting.org/asc/715/30/#715-30-05-8) Pending content: no Source downloaded (UTC): 2026-09-10T00:59:53.143Z to 2026-09-10T00:59:53.143Z Record version: sha256:110900bf87495e3435c80a67433f08d66d6ff89fc95732a650076b83c81415e2 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2017-07](https://asc.understandingaccounting.org/updates/asu-2017-07/). ### Settlements, Curtailments, and Certain Termination Benefits ##### [715-30-05-9](https://asc.understandingaccounting.org/asc/715/30/#715-30-05-9) Pending content: no Source downloaded (UTC): 2026-09-10T00:59:53.143Z to 2026-09-10T00:59:53.143Z Record version: sha256:98d8062cebc0ec2fb65f9d49d91adbb41b03963b05d96563103843c2b2410984 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The Settlements, Curtailments, and Certain Termination Benefits Subsections establish standards for an employer's accounting for [settlement](https://asc.understandingaccounting.org/glossary/s/#settlement-of-a-pension-or-postretirement-benefit-obligation "A transaction that is an irrevocable action, relieves the employer (or the plan) of primary responsibility for a pension or postretirement benefit obligation, and eliminates significant risks related to the obligation and the assets used to effect the settlement.") of defined benefit pension obligations, for [curtailment](https://asc.understandingaccounting.org/glossary/c/#plan-curtailment "An event that significantly reduces the expected years of future service of present employees or eliminates for a significant number of employees the accrual of defined benefits for some or all of their future services.") of a [defined benefit pension plan](https://asc.understandingaccounting.org/glossary/d/#defined-benefit-plan "A defined benefit plan provides participants with a determinable benefit based on a formula provided for in the plan. Defined benefit health and welfare plans—Defined benefit health and welfare plans specify a determinable benefit, which may be in the form of a reimbursement to the covered plan participant or a direct payment to providers or third-party insurers for the cost of specified services. Such plans may also include benefits that are payable as a lump sum, such as death benefits. The level of benefits may be defined or limited based on factors such as age, years of service, and salary. Contributions may be determined by the plan's actuary or be based on premiums, actual claims paid, hours worked, or other factors determined by the plan sponsor. Even when a plan is funded pursuant to agreements that specify a fixed rate of employer contributions (for example, a collectively bargained multiemployer plan), such a plan may nevertheless be a defined benefit health and welfare plan if its substance is to provide a defined benefit. Defined benefit pension plan—A pension plan that defines an amount of pension benefit to be provided, usually as a function of one or more factors such as age, years of service, or compensation. Any pension plan that is not a defined contribution pension plan is, for purposes of Subtopic 715-30, a defined benefit pension plan. Defined benefit postretirement plan—A plan that defines postretirement benefits in terms of monetary amounts (for example, $100,000 of life insurance) or benefit coverage to be provided (for example, up to $200 per day for hospitalization, or 80 percent of the cost of specified surgical procedures). Any postretirement benefit plan that is not a defined contribution postretirement plan is, for purposes of Subtopic 715-60, a defined benefit postretirement plan. (Specified monetary amounts and benefit coverage are collectively referred to as benefits.)"), and for certain termination benefits, and define the events that require adjustments to assets and liabilities and that require certain amounts previously recognized in accumulated other comprehensive income to be recognized in earnings. The Settlements, Curtailments, and Certain Termination Benefits Subsections provide guidance that results in the net [gain or loss](https://asc.understandingaccounting.org/glossary/g/#gain-or-loss "A change in the value of either the benefit obligation (projected benefit obligation for pension plans or accumulated postretirement benefit obligation for other postretirement benefit plans) or the plan assets resulting from experience different from that assumed or from a change in an actuarial assumption, or the consequence of a decision to temporarily deviate from the other postretirement benefit substantive plan. Gains or losses that are not recognized in net periodic pension cost or net periodic postretirement benefit cost when they arise are recognized in other comprehensive income. Those gains or losses are subsequently recognized as a component of net periodic pension cost or net periodic postretirement benefit cost based on the recognition and amortization provisions of Subtopic 715-30 or Subtopic 715-60.") and [prior service cost](https://asc.understandingaccounting.org/glossary/p/#prior-service-cost "The cost of retroactive benefits granted in a plan amendment. Retroactive benefits are benefits granted in a plan amendment (or initiation) that are attributed by the benefit formula to employee services rendered in periods before the amendment."), which were previously recognized in accumulated other comprehensive income, being recognized in income in the period when specific conditions are met. 1. a [Subparagraph superseded by Accounting Standards Update No. 2017-07](https://asc.understandingaccounting.org/updates/asu-2017-07/). 2. b [Subparagraph superseded by Accounting Standards Update No. 2017-07](https://asc.understandingaccounting.org/updates/asu-2017-07/). 3. c [Subparagraph superseded by Accounting Standards Update No. 2017-07](https://asc.understandingaccounting.org/updates/asu-2017-07/). 4. d [Subparagraph superseded by Accounting Standards Update No. 2017-07](https://asc.understandingaccounting.org/updates/asu-2017-07/). 5. e [Subparagraph superseded by Accounting Standards Update No. 2017-07](https://asc.understandingaccounting.org/updates/asu-2017-07/). 6. f [Subparagraph superseded by Accounting Standards Update No. 2017-07](https://asc.understandingaccounting.org/updates/asu-2017-07/). ##### [715-30-05-10](https://asc.understandingaccounting.org/asc/715/30/#715-30-05-10) Pending content: no Source downloaded (UTC): 2026-09-10T00:59:53.143Z to 2026-09-10T00:59:53.143Z Record version: sha256:e464539d2935d30029df2ddc111522ad3088ce91423c34d9255432a66d93de49 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2017-07](https://asc.understandingaccounting.org/updates/asu-2017-07/). ##### [715-30-05-11](https://asc.understandingaccounting.org/asc/715/30/#715-30-05-11) Pending content: no Source downloaded (UTC): 2026-09-10T00:59:53.143Z to 2026-09-10T00:59:53.143Z Record version: sha256:e79fbaea9d3d5c5d1f73ac5125ecf409a6c2ca3898e6e6713f175a6147d61e0a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2017-07](https://asc.understandingaccounting.org/updates/asu-2017-07/).