# ASC 715-70-55: Compensation—Retirement Benefits — Defined Contribution Plans — 55 Implementation Guidance and Illustrations Source: FASB Accounting Standards Codification, Basic View [Read online](https://asc.understandingaccounting.org/asc/715/70/#55-implementation-guidance-and-illustrations) 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): 2026-09-10T01:01:13.649Z to 2026-09-10T01:01:13.649Z Record version: sha256:34eb6d15297d4809256a46dc03051bbff20a4a0a3a5c38dd4285079f0af50a04 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 715-70-55: 55 Implementation Guidance and Illustrations [Read section](https://asc.understandingaccounting.org/asc/715/70/#55-implementation-guidance-and-illustrations) SEC content: no #### Implementation Guidance ##### [715-70-55-1](https://asc.understandingaccounting.org/asc/715/70/#715-70-55-1) Pending content: no Source downloaded (UTC): 2026-09-10T01:01:13.649Z to 2026-09-10T01:01:13.649Z Record version: sha256:45b5f6b5ecea55d5abbb5dfafafd1a400536214018c8d6b3b213c2fcfc28396f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Section, which is an integral part of the requirements of this Subtopic, provides general guidance related to accounting and disclosure requirements of defined contribution pension and other postretirement benefit plans. ##### [715-70-55-2](https://asc.understandingaccounting.org/asc/715/70/#715-70-55-2) Pending content: no Source downloaded (UTC): 2026-09-10T01:01:13.649Z to 2026-09-10T01:01:13.649Z Record version: sha256:ef7d2dffaba8672b395fe5bf1cd8dc829d6ae2d5c87d96d0200a3ceb63f1af60 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An employer has two legally separate pension or other postretirement benefit plans—a defined benefit plan and a [defined contribution plan](https://asc.understandingaccounting.org/glossary/d/#defined-contribution-plan "A plan that provides an individual account for each participant and provides benefits that are based on all of the following: amounts contributed to the participant's account by the employer or employee; investment experience; and any forfeitures allocated to the account, less any administrative expenses charged to the plan. Defined contribution health and welfare plans—Defined contribution health and welfare plans maintain an individual account for each plan participant. They have terms that specify the means of determining the contributions to participants' accounts, rather than the amount of benefits the participants are to receive. The benefits a plan participant will receive are limited to the amount contributed to the participant's account, investment experience, expenses, and any forfeitures allocated to the participant's account. These plans also include flexible spending arrangements. Defined contribution postretirement plan—A plan that provides postretirement benefits in return for services rendered, provides an individual account for each plan participant, and specifies how contributions to the individual's account are to be determined rather than specifies the amount of benefits the individual is to receive. Under a defined contribution postretirement plan, the benefits a plan participant will receive depend solely on the amount contributed to the plan participant's account, the returns earned on investments of those contributions, and the forfeitures of other plan participants' benefits that may be allocated to that plan participant's account."). The terms of the defined benefit plan specify that the employer's obligation under that plan is reduced to the extent that a participant's account balance in the defined contribution plan shall be used to pay incurred benefits covered by the defined benefit plan. Those plans shall be considered two plans for purposes of applying this Subtopic. ##### [715-70-55-3](https://asc.understandingaccounting.org/asc/715/70/#715-70-55-3) Pending content: no Source downloaded (UTC): 2026-09-10T01:01:13.649Z to 2026-09-10T01:01:13.649Z Record version: sha256:3360d2be4592ce26f7c9769b8ec0c38bbd103341729dce5defc700c82f24d006 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The defined benefit plan is commonly described as a floor-offset plan. As participants' account balances in the defined contribution plan grow, the employer's obligation under the defined benefit plan diminishes. However, the nature of the employer's obligation under each plan, how that obligation is satisfied, the availability of plan assets to pay benefits, and the accounting for a defined benefit versus a defined contribution plan are sufficiently dissimilar for the two plans that they cannot be considered a single plan for purposes of applying the guidance in this Subtopic. See paragraphs [715-60-55-32 through 55-34](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-32) for additional guidance on floor-offset plans. ##### [715-70-55-4](https://asc.understandingaccounting.org/asc/715/70/#715-70-55-4) Pending content: no Source downloaded (UTC): 2026-09-10T01:01:13.649Z to 2026-09-10T01:01:13.649Z Record version: sha256:efae5ebf1f86b121142ef74ce38105d4f0fb5697603edf073069fb82d2a55972 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. When an employer terminates a defined benefit plan and contributes the assets withdrawn to a defined contribution plan and the amount contributed is in excess of the employer's required (or maximum) annual contribution to the plan, the assets in excess of the required contribution are maintained in a suspense account pending allocation to plan participants. Those assets are not allocated to individual participants' accounts, and the employer retains the risks and rewards of ownership of the assets. ##### [715-70-55-5](https://asc.understandingaccounting.org/asc/715/70/#715-70-55-5) Pending content: no Source downloaded (UTC): 2026-09-10T01:01:13.649Z to 2026-09-10T01:01:13.649Z Record version: sha256:bbedc182e77e666b8acb085756aa4b3c14dd5c6371db71b61ec1131c60865982 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The excess contribution that is not allocated to individual participants shall be accounted for as an asset regardless of the source of funds to make the excess unallocated contribution (for example, either from an asset reversion of a defined benefit plan or otherwise). ##### [715-70-55-6](https://asc.understandingaccounting.org/asc/715/70/#715-70-55-6) Pending content: no Source downloaded (UTC): 2026-09-10T01:01:13.649Z to 2026-09-10T01:01:13.649Z Record version: sha256:12361cfd8987b0a001a0b37596c08f353b4e828edf5af557bda315cfb19c26e6 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The unallocated amount shall be treated as if it were part of the employer's investment portfolio and recorded as an asset until allocation to individual participants. For example, if the unallocated amount consists of equity securities, the accounting as required by Subtopic 321-10 shall apply. If the employer is subject to specialized industry accounting rules, as indicated in paragraph [320-10-15-3](https://asc.understandingaccounting.org/asc/320/10/#320-10-15-3) or paragraph [321-10-15-3](https://asc.understandingaccounting.org/asc/321/10/#321-10-15-3), such specialized industry rules would apply. Income attributable to such securities, including dividends, interest, and realized gains and losses, should be reported in a manner consistent with the employer's reporting of similar items. ##### [715-70-55-7](https://asc.understandingaccounting.org/asc/715/70/#715-70-55-7) Pending content: no Source downloaded (UTC): 2026-09-10T01:01:13.649Z to 2026-09-10T01:01:13.649Z Record version: sha256:5a998b661b6fa7d671899685b6215a1a8f143d6486701500ec3e23592f19387d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Compensation expense shall be reflected at the time the allocation is made by the plan based on the [fair value](https://asc.understandingaccounting.org/glossary/f/#fair-value "The price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.") of the assets at that time. ##### [715-70-55-8](https://asc.understandingaccounting.org/asc/715/70/#715-70-55-8) Pending content: no Source downloaded (UTC): 2026-09-10T01:01:13.649Z to 2026-09-10T01:01:13.649Z Record version: sha256:ee39da00c3488ae25f3aeb05279ecc4c90603ffb8347914651671cc8522afeea Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The employer shall report the portion of the unallocated assets of the plan that consist of employer common stock as treasury stock in the employer's financial statements. ##### [715-70-55-9](https://asc.understandingaccounting.org/asc/715/70/#715-70-55-9) Pending content: no Source downloaded (UTC): 2026-09-10T01:01:13.649Z to 2026-09-10T01:01:13.649Z Record version: sha256:3b148717ed9bd9a812e0ffa77fca6fa24c21bfb7ff6b6080354b819538ab0206 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. With respect to the employer's own debt securities and a third party's debt securities the employer shall report the portion of the unallocated assets of the plan that consist of employer debt securities as an asset rather than as an extinguishment of debt. This Subtopic applies only to employer debt securities included in the unallocated assets of a defined contribution plan and shall not apply to other circumstances in which an entity acquires its own debt securities. Debt securities, both of third parties and of the employer, included in the unallocated assets of a defined contribution plan shall be measured at the lower of cost or fair value with any write-downs reflected in the income statement.