ASC

ASC 715-930

Extractive Activities—Mining

715 Compensation—Retirement Benefits

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In brief

AdvancedCompensation and benefitsRecognitionPresentationIndustry-specific

ASC 715-930 governs how coal industry entities account for postretirement medical and death benefit obligations imposed by the Coal Industry Retiree Health Benefit Act of 1992, which assigns beneficiaries (and a share of "orphan" beneficiaries) of the UMWA Combined Benefit Fund to former signatories of coal wage agreements. Entities still operating in the coal industry may elect to account for the obligation either as participation in a multiemployer plan or as a liability imposed by the Act; entities electing liability treatment, and all entities no longer operating in the coal industry, must recognize the entire obligation as a loss under Subtopic 450-20 (715-930-25-1). Losses so recognized are presented as an unusual or infrequently occurring item, and the impact of the Act must be disclosed.

Key points (7)
  • The Subtopic applies only to entities with operations in the coal industry that have a multiemployer pension obligation affected by the Coal Industry Retiree Health Benefit Act of 1992 (715-930-15-2).
  • The Act created the UMWA Combined Benefit Fund, a multiemployer plan paying medical and death benefits to beneficiaries receiving benefits as of July 20, 1992, funded by former signatories to a coal wage agreement (715-930-05-2).
  • An entity's annual cost equals the per-beneficiary premium times its assigned beneficiaries plus an allocated percentage of unassigned 'orphan' beneficiaries (715-930-05-2).
  • Entities currently operating in the coal industry may elect to account for the Act obligation either as participation in a multiemployer plan or as a liability imposed by the Act (715-930-25-1).
  • Entities electing liability treatment, and entities no longer operating in the coal industry, must record the entire obligation as a loss under Subtopic 450-20 (715-930-25-1).
  • A loss recognized under Subtopic 450-20 is reported as an unusual or infrequently occurring item (715-930-45-1).
  • An entity must disclose the impact of the Act, including the estimated total obligation and the accounting method adopted (715-930-50-1).

For students. This is a narrow, industry-specific rule, but it is a clean illustration of a permitted accounting policy choice: ongoing coal operators may use multiemployer plan accounting (expense as assessed), while exited operators must book the whole statutory obligation at once as a 450-20 loss. The common mistake is assuming all affected entities get the election—entities no longer in the coal industry do not.

coal industry retiree health benefit actumwa combined benefit fundmultiemployer planpostretirement health benefitsassigned and orphan beneficiariesloss contingencyunusual or infrequently occurring itemaccounting policy election

Machine-generated study aid for ASC 715-930. Check the source paragraphs below.

715-930-00Status

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715-930-00-1
The following table identifies the changes made to this Subtopic.
ParagraphActionAccounting Standards UpdateDate
930-715-45-1AmendedAccounting Standards Update No. 2015-0101/09/2015

715-930-05Overview and Background

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715-930-05-1
This Subtopic addresses the accounting and reporting for postretirement health benefits for entities in the coal industry affected by the Coal Industry Retiree Health Benefit Act of 1992.
715-930-05-2
Current and projected operating deficits of certain benefit trusts established by the United Mine Workers of America and the Bituminous Coal Operators' Association, Inc. prompted the Coal Industry Retiree Health Benefit Act of 1992 (the Act). The Act creates a new multiemployer benefit plan called the United Mine Workers of America Combined Benefit Fund (the Combined Fund), which will provide medical and death benefits to all beneficiaries of certain earlier trusts who were actually receiving benefits as of July 20, 1992. In 1993, the Combined Fund began paying those beneficiaries their medical and death benefits. The Act provides for the assignment of beneficiaries to former employers and the allocation of any unassigned beneficiaries (referred to as orphans) to entities using a formula included in the legislation. The Act requires that responsibility for funding those payments be assigned to entities (or persons related to the entities) that had been signatories to a coal wage agreement. Under the act an entity's annual cost of benefits is based on the number of beneficiaries assigned to it plus a percentage of the cost of unassigned beneficiaries, which is a function of the number of orphans times the per-beneficiary premium.

715-930-15Scope and Scope Exceptions

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Overall Guidance

715-930-15-1
This Subtopic follows the same Scope and Scope Exceptions as outlined in the Overall Subtopic, see Section 930-10-15, with specific entity qualifications noted below.

Entities

715-930-15-2
This Subtopic only applies to entities with operations in the coal industry with a multiemployer pension obligation.

715-930-25Recognition

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715-930-25-1
Entities that currently have operations in the coal industry shall account for their obligation under the Act (as defined in Section 930-715-05) either as participation in a multiemployer plan or a liability imposed by the Act. Entities that currently have operations in the coal industry that decide to account for their obligation as a liability and entities that no longer have operations in the coal industry shall account for their entire obligation under the Act as a loss in accordance with Subtopic 450-20.

715-930-45Other Presentation Matters

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715-930-45-1
If an entity accounts for its obligation under the Act as a loss (see paragraph 930-715-25-1) in accordance with Subtopic 450-20, the estimated loss should be reported as an unusual or infrequently occurring item.

715-930-50Disclosure

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715-930-50-1
An entity shall disclose the impact of the Act, including the estimated amount of its total obligation and the method of accounting adopted.

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