# ASC 715-30-25: Compensation—Retirement Benefits — Defined Benefit Plans—Pension — 25 Recognition Source: FASB Accounting Standards Codification, Basic View [Read online](https://asc.understandingaccounting.org/asc/715/30/#25-recognition) 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): 2026-09-10T01:00:01.670Z to 2026-09-10T01:00:01.670Z Record version: sha256:df39fddb8cb3f28a453711988cc921368ee2be121d7d7dd1c366d90629ce4704 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 715-30-25: 25 Recognition [Read section](https://asc.understandingaccounting.org/asc/715/30/#25-recognition) SEC content: no #### Recognition of Liabilities and Assets ##### [715-30-25-1](https://asc.understandingaccounting.org/asc/715/30/#715-30-25-1) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:01.670Z to 2026-09-10T01:00:01.670Z Record version: sha256:d370f34a03554f600fc9de7a10a2d67f68520dddc9e3eb711fc0d74c21db596f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If the [projected benefit obligation](https://asc.understandingaccounting.org/glossary/p/#projected-benefit-obligation "The actuarial present value as of a date of all benefits attributed by the pension benefit formula to employee service rendered before that date. The projected benefit obligation is measured using assumptions as to future compensation levels if the pension benefit formula is based on those future compensation levels (pay-related, final-pay, final-average-pay, or career-average-pay plans).") exceeds the fair value of [plan assets](https://asc.understandingaccounting.org/glossary/p/#plan-assets "Assets—usually stocks, bonds, and other investments—that have been segregated and restricted, usually in a trust, to provide for pension benefits. The amount of plan assets includes amounts contributed by the employer, and by employees for a contributory plan, and amounts earned from investing the contributions, less benefits paid. Plan assets ordinarily cannot be withdrawn by the employer except under certain circumstances when a plan has assets in excess of obligations and the employer has taken certain steps to satisfy existing obligations. Assets not segregated in a trust or otherwise effectively restricted so that they cannot be used by the employer for other purposes are not plan assets even though it may be intended that such assets be used to provide pensions. If a plan has liabilities other than for benefits, those nonbenefit obligations may be considered as reductions of plan assets. Amounts accrued by the employer but not yet paid to the plan are not plan assets. Securities of the employer held by the plan are includable in plan assets provided they are transferable."), the employer shall recognize in its statement of financial position a liability that equals the [unfunded projected benefit obligation](https://asc.understandingaccounting.org/glossary/u/#unfunded-projected-benefit-obligation "The excess of the projected benefit obligation over plan assets."). If the fair value of plan assets exceeds the projected benefit obligation, the employer shall recognize in its statement of financial position an asset that equals the overfunded projected benefit obligation. ##### [715-30-25-2](https://asc.understandingaccounting.org/asc/715/30/#715-30-25-2) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:01.670Z to 2026-09-10T01:00:01.670Z Record version: sha256:c8e821c36e6786c47c85d711f2f7a6c999a05fe64e6be8b952bc90a1e413a28a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The employer shall aggregate the statuses of all overfunded plans and recognize that amount as an asset in its statement of financial position. It also shall aggregate the statuses of all underfunded plans and recognize that amount as a liability in its statement of financial position. ##### [715-30-25-3](https://asc.understandingaccounting.org/asc/715/30/#715-30-25-3) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:01.670Z to 2026-09-10T01:00:01.670Z Record version: sha256:e726ca858e5e72eb27447e28bdf0c3379c2afc83adc92e5ac8db3748b03965b9 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The asset or liability that is recognized pursuant to paragraph [715-30-25-1](https://asc.understandingaccounting.org/asc/715/30/#715-30-25-1) may result in a temporary difference, as defined in Subtopic 740-10. The deferred tax effects of any temporary differences shall be recognized in income tax expense or benefit for the year and shall be allocated to various financial statement components, including other comprehensive income, pursuant to Section 740-20-45. ##### [715-30-25-4](https://asc.understandingaccounting.org/asc/715/30/#715-30-25-4) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:01.670Z to 2026-09-10T01:00:01.670Z Record version: sha256:099b6f9fd9b0ed0bbe024018572b1afab275b43ddd4864caf9f26e72a3821bac Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If a new determination of the funded status of a plan to be recognized as an asset or a liability in the employer's statement of financial position is made (see paragraphs [715-30-35-62 through 35-69](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-62) ), or when net gains or losses, prior [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.") costs or credits, or the net transition asset or obligation existing at the date of initial application of this Subtopic are amortized as components of [net periodic pension cost](https://asc.understandingaccounting.org/glossary/n/#net-periodic-pension-cost "The amount recognized in an employer's financial statements as the cost of a pension plan for a period. Components of net periodic pension cost are service cost, interest cost, actual return on plan assets, gain or loss, amortization of prior service cost or credit, and amortization of the transition asset or obligation existing at the date of initial application of Subtopic 715-30. The term net periodic pension cost is used instead of net pension expense because the service cost component recognized in a period may be capitalized as part of an asset such as inventory."), the related balances for those net gains or losses, prior service costs or credits, and transition asset or obligation in accumulated other comprehensive income shall be adjusted as necessary and reported in other comprehensive income. ##### [715-30-25-5](https://asc.understandingaccounting.org/asc/715/30/#715-30-25-5) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:01.670Z to 2026-09-10T01:00:01.670Z Record version: sha256:932dc47e4cda54c86476e3dd73791aaaafd129e13cf1c1031cf22e2ef678848e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Sometimes, an entity remeasures both plan assets and benefit obligations during the fiscal year. Paragraph [715-30-35-66](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-66) provides an example of some events that may require a remeasurement. Upon remeasurement, a business entity shall adjust its statement of financial position in a subsequent interim period to reflect the overfunded or underfunded status of the plan consistent with that measurement date. ##### [715-30-25-6](https://asc.understandingaccounting.org/asc/715/30/#715-30-25-6) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:01.670Z to 2026-09-10T01:00:01.670Z Record version: sha256:0c9f82d856fd1f3282a416d191b0d774342ba92fee26bd04bce41ba115e7bca0 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An employer that sponsors two or more separate [defined benefit pension plans](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.)") shall determine net periodic pension cost, liabilities, and assets by separately applying the provisions of this Subtopic to each plan. In particular, unless an employer clearly has a right to use the assets of one plan to pay [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.") of another, a liability required to be recognized pursuant to paragraph [715-30-25-1](https://asc.understandingaccounting.org/asc/715/30/#715-30-25-1) for one plan shall not be reduced or eliminated because the employer has recognized an asset for another plan that has assets in excess of its projected benefit obligation. #### Participation Rights ##### [715-30-25-7](https://asc.understandingaccounting.org/asc/715/30/#715-30-25-7) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:01.670Z to 2026-09-10T01:00:01.670Z Record version: sha256:76c92709c01bf3db7540adf2d7dd4435745c236a42d99f1cb4ef99c8c22a12c6 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If an [annuity contract](https://asc.understandingaccounting.org/glossary/a/#annuity-contract "A contract in which an insurance entity unconditionally undertakes a legal obligation to provide specified pension benefits to specific individuals in return for a fixed consideration or premium. An annuity contract is irrevocable and involves the transfer of significant risk from the employer to the insurance entity. Annuity contracts are also called allocated contracts.") with a [participation right](https://asc.understandingaccounting.org/glossary/p/#participation-right "A purchaser's right under a participating insurance contract to receive future dividends or retroactive rate credits from the insurance entity.") is purchased, the cost of the participation right shall be recognized at the date of purchase as an asset. To the extent that benefits currently earned are covered by annuity contracts, the cost of those benefits shall be the cost of purchasing the contracts, except for the cost of the participation right. ### Settlements, Curtailments, and Certain Termination Benefits #### Certain Termination Benefits ##### [715-30-25-8](https://asc.understandingaccounting.org/asc/715/30/#715-30-25-8) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:01.670Z to 2026-09-10T01:00:01.670Z Record version: sha256:f858cbf775645111e17349abf12adb143bfd987ec202c06063a356c5e1e3ca3b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subsection addresses the accounting for [termination benefits](https://asc.understandingaccounting.org/glossary/t/#termination-benefits "Benefits provided by an employer to employees in connection with their termination of employment. They may be either special termination benefits offered only for a short period of time or contractual benefits required by the terms of a plan only if a specified event, such as a plant closing, occurs.") that are not otherwise addressed in the Subtopic and Topics indicated in paragraph [715-30-15-6c](https://asc.understandingaccounting.org/asc/715/30/#15-scope-and-scope-exceptions). ##### [715-30-25-9](https://asc.understandingaccounting.org/asc/715/30/#715-30-25-9) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:01.670Z to 2026-09-10T01:00:01.670Z Record version: sha256:a07b69af37f8d9d51d57a249ce5b5fe1096ce2d1f82f54f8588ea42595c99586 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An employer may provide benefits to employees in connection with their termination of employment. Those benefits may be either special termination benefits offered only for a short period of time or contractual termination benefits required by the terms of a plan only if a specified event, such as a plant closing, causes employees' services to be terminated involuntarily. ##### [715-30-25-10](https://asc.understandingaccounting.org/asc/715/30/#715-30-25-10) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:01.670Z to 2026-09-10T01:00:01.670Z Record version: sha256:b179742c2f22bf1dec5cac3635be3c4df0dc3e67b2bbcb558d84b35e0355030e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Termination benefits may take various forms including lump-sum payments, periodic future payments, or both. They may be paid directly from an employer's assets, an existing pension plan, a new employee benefit plan, or a combination of those means. An employer that offers special termination benefits to employees shall recognize a liability and a [loss](https://asc.understandingaccounting.org/glossary/l/#loss "See Gain or Loss.") when the employees accept the offer and the amount can be reasonably estimated. An employer that provides contractual termination benefits shall recognize a liability and a loss when it is probable that employees will be entitled to benefits and the amount can be reasonably estimated. ##### [715-30-25-11](https://asc.understandingaccounting.org/asc/715/30/#715-30-25-11) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:01.670Z to 2026-09-10T01:00:01.670Z Record version: sha256:f9ead498460dd3fa08cc0b4a7eb16aca29b36e0d869613c77cf3b7063aaa4c95 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The cost of termination benefits within the scope of this Subsection recognized as a liability and a loss shall include the amount of any lump-sum payments and the present value of any expected future payments. The liability and the loss from the acceptance of the offer of special termination benefits is the difference as of the date the employees accept the offer between the [actuarial present value](https://asc.understandingaccounting.org/glossary/a/#actuarial-present-value "The value, as of a specified date, of an amount or series of amounts payable or receivable thereafter, with each amount adjusted to reflect the time value of money (through discounts for interest) and the probability of payment (by means of decrements for events such as death, disability, withdrawal, or retirement) between the specified date and the expected date of payment.") of the respective employees' accumulated [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.") without considering the special termination benefits and the actuarial present value of their accumulated pension benefits considering the special termination benefits. ##### [715-30-25-12](https://asc.understandingaccounting.org/asc/715/30/#715-30-25-12) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:01.670Z to 2026-09-10T01:00:01.670Z Record version: sha256:139a012bbb12dcfd26db4eb693ee5d017fec22e3bacce40eafae604dedbe4a9e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See Example 6 (paragraph [715-30-55-226](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-226)) for an illustration of the determination of the liability and the losses from employees' acceptance of an offer of special termination benefits. ##### [715-30-25-13](https://asc.understandingaccounting.org/asc/715/30/#715-30-25-13) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:01.670Z to 2026-09-10T01:00:01.670Z Record version: sha256:ad88f11ae54ca24dadab3dd8b0ace241ff4c5442283568674295c782d33fc062 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A situation involving termination benefits may also involve a [curtailment](https://asc.understandingaccounting.org/glossary/c/#curtailment "See Plan Curtailment.") to be accounted for under paragraphs [715-30-35-92 through 35-95](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-92) .