# ASC Topic 715: Compensation—Retirement Benefits Source: FASB Accounting Standards Codification, Basic View [Read online](https://asc.understandingaccounting.org/asc/715/) 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): 2026-09-10T00:58:45.119Z to 2026-09-10T01:03:11.702Z Record version: sha256:91950e36e3cf3bc1d1cee4737ff93fc980da474d16e937f11c2fc89e044de046 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## Machine-generated topic summary ASC 715 covers an employer's accounting for retirement benefits, built on the premise that a benefit plan is an exchange of deferred compensation for employee service, so cost is recognized as employees render service (715-10-05-6). The Topic splits by plan type: defined contribution plans expense the contribution called for in the period (715-70-35-1); multiemployer plans similarly expense the required contribution with extensive plan-by-plan risk disclosures (715-80-35-1); and single-employer defined benefit pension (715-30) and other postretirement benefit (715-60) plans require recognizing the plan's funded status on the balance sheet and a net periodic benefit cost with delayed recognition of prior service cost, gains/losses, and transition amounts through OCI, subject to the 10 percent corridor. ASC 715-20 supplies the presentation and disclosure rules—notably that only service cost is reported with other compensation cost while other components are presented separately outside any operating subtotal (715-20-45-3A)—and specialized Subtopics adapt the model for not-for-profits (715-958), rate-regulated entities (715-980), government contractors (715-912), and the coal industry (715-930). The single most important idea: the employer's obligation accrues with service, and the balance sheet must show funded status while earnings recognition of changes is smoothed over service periods. Source downloaded (UTC): 2026-09-10T00:58:45.119Z to 2026-09-10T00:58:58.564Z Record version: sha256:df34a95141e5bcfee5034127898c3b00d75efa278e1009a908a1bf4d48f5d711 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 715-10: Compensation—Retirement Benefits — Overall ### Machine-generated study aids ```json { "summary": "ASC 715-10 is the Overall subtopic that sets the objectives and pervasive scope for employer accounting for pension, other postretirement, and certain special or contractual termination benefits. Its core premise is that a benefit plan is an exchange of deferred compensation for employee service, so the employer's obligation is incurred as services are rendered and cost is recognized over the employee service periods. Because the original content was built on an expense recognition model, most operative guidance sits in the Subsequent Measurement Sections of Subtopics 715-20, 715-30, 715-60, 715-70, and 715-80.", "key_points": [ "A benefit plan is an exchange between employer and employee: retirement benefits are deferred compensation, not gratuities, and the obligation is incurred when services are rendered (715-10-05-6).", "Objectives are to recognize net periodic pension cost and net periodic other postretirement benefit cost as employees render service, to reflect the obligation on the balance sheet based on the mutual understanding of plan terms, to disclose relevant information, and to require uniform measurement methods for similar plans (715-10-10-1).", "The Topic applies to all employers, including NFPs (which also apply Subtopic 958-715), whether or not the obligation is funded (715-10-15-2).", "Scope covers any arrangement in substance a pension or other postretirement plan regardless of form or funding, unwritten plans discernible from a practice of paying benefits or oral representations, deferred compensation contracts that taken together are equivalent to such a plan, and health and welfare benefits for employees on disability retirement (715-10-15-3).", "Scope also covers settlements of all or part of the obligation, plan curtailments, and pension/OPEB provided as special or contractual termination benefits not addressed elsewhere (715-10-15-4).", "Excluded are individually negotiated contracts with selected employees, which are accounted for individually under Topic 710, and postemployment benefits paid before retirement (e.g., layoff benefits) unless payable from a pension or OPEB plan, which fall under Topic 712 (715-10-15-5).", "There are no special provisions for non-U.S. plans; applicability turns on the nature of the obligation and the terms defining benefits, not on funding, payment form, or whether benefits are required by law or custom (715-10-15-6 through 15-7); the Topic does not change Topic 960 plan-level reporting (715-10-15-8)." ], "categories": [ "Compensation and benefits", "Recognition", "Subsequent measurement", "Disclosure" ], "audience_level": "introductory", "student_note": "This is the gateway subtopic: it tells you which Subtopic to use (defined benefit pension, OPEB, defined contribution, multiemployer) and, importantly, that substance over form governs scope—an unwritten practice of paying retirement benefits is a plan. A common misunderstanding is assuming unfunded or foreign arrangements escape ASC 715, or that pre-retirement severance benefits belong here rather than in Topic 712.", "related_topics": [ "715-20", "715-30", "715-60", "710", "712", "960" ], "key_concepts": [ "deferred compensation exchange", "net periodic pension cost", "net periodic other postretirement benefit cost", "benefit plan scope", "unwritten plan", "settlement and curtailment", "expense recognition model", "funded status" ] } ``` Source downloaded (UTC): 2026-09-10T00:58:45.119Z to 2026-09-10T00:58:45.119Z Record version: sha256:cf3cd782844e6e3f94783334487a840578f4de313c7a2384c85ea6f4e422ec0e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 715-10-00: 00 Status [Read section](https://asc.understandingaccounting.org/asc/715/10/#00-status) SEC content: no ##### [715-10-00-1](https://asc.understandingaccounting.org/asc/715/10/#715-10-00-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:58:45.119Z to 2026-09-10T00:58:45.119Z Record version: sha256:a08727401b6c16714a340d162390f3b1b03a4e9af365886d8070bb041a087cae Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following table identifies the changes made to this Subtopic.
ParagraphActionAccounting Standards UpdateDate
715-10-05-2AmendedAccounting Standards Update No. 2017-0703/10/2017
715-10-05-4SupersededAccounting Standards Update No. 2017-0703/10/2017
715-10-05-8SupersededAccounting Standards Update No. 2017-0703/10/2017
715-10-05-10SupersededAccounting Standards Update No. 2017-0703/10/2017
715-10-15-8AmendedAccounting Standards Update No. 2009-0207/01/2009
715-10-65-1AddedAccounting Standards Update No. 2015-0404/15/2015
Source downloaded (UTC): 2026-09-10T00:58:48.766Z to 2026-09-10T00:58:48.766Z Record version: sha256:b045d6e94f8be78c07643cfd076648c4ef4b477249952386a94da50138f9d6b1 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 715-10-05: 05 Overview and Background [Read section](https://asc.understandingaccounting.org/asc/715/10/#05-overview-and-background) SEC content: no ##### [715-10-05-1](https://asc.understandingaccounting.org/asc/715/10/#715-10-05-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:58:48.766Z to 2026-09-10T00:58:48.766Z Record version: sha256:2fcd9e7ecd30644657395d8e034a9f9d98003a82a5440a38e37d0a2384dfee65 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The Compensation—Retirement Benefits Topic establishes standards of financial accounting and reporting for an employer that offers pension, other postretirement, and certain special or contractual termination benefits to its employees. ##### [715-10-05-2](https://asc.understandingaccounting.org/asc/715/10/#715-10-05-2) Pending content: no Source downloaded (UTC): 2026-09-10T00:58:48.766Z to 2026-09-10T00:58:48.766Z Record version: sha256:1ba23c50d22a1c5f1e11416658eedc43ee8670beaeb2bae59bc95c5fd02dd38a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Topic contains the following Subtopics: 1. a Overall (Subtopic 715-10) 2. b Defined Benefit Plans—General (Subtopic 715-20) 3. c Defined Benefit Plans—Pension (Subtopic 715-30) 4. cc Defined Benefit Plans—Other Postretirement (Subtopic 715-60)  5. d Defined Contribution Plans (Subtopic 715-70)  6. e Multiemployer Plans (Subtopic 715-80)  7. f [Subparagraph superseded by Accounting Standards Update No. 2017-07](https://asc.understandingaccounting.org/updates/asu-2017-07/). ##### [715-10-05-3](https://asc.understandingaccounting.org/asc/715/10/#715-10-05-3) Pending content: no Source downloaded (UTC): 2026-09-10T00:58:48.766Z to 2026-09-10T00:58:48.766Z Record version: sha256:ce9087dedffbc26f0f516c98a0457d95fed797d5140c55d72d997cdd8bde99c1 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Throughout the Codification, content is structured and authored using an asset and liability model as its underlying premise. However, the original content used to populate this Topic was based on an expense recognition model rather than an asset and liability model. Because the expense recognition model focuses primarily on remeasurement, the majority of the guidance throughout this Topic is contained in the Subsequent Measurement Sections of the applicable Subtopics. ##### [715-10-05-4](https://asc.understandingaccounting.org/asc/715/10/#715-10-05-4) Pending content: no Source downloaded (UTC): 2026-09-10T00:58:48.766Z to 2026-09-10T00:58:48.766Z Record version: sha256:9ae05df5f4baf48ec2761f914c97d8a5b09648fe0d07d811216dca2a4f19d379 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/). ##### [715-10-05-5](https://asc.understandingaccounting.org/asc/715/10/#715-10-05-5) Pending content: no Source downloaded (UTC): 2026-09-10T00:58:48.766Z to 2026-09-10T00:58:48.766Z Record version: sha256:fb638dabb6edf82aff8f25ca47bcfb88eeedf36788ea50f23fe5e77c8c9ac35d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph not used](https://asc.understandingaccounting.org/updates/page-1833002/). ##### [715-10-05-6](https://asc.understandingaccounting.org/asc/715/10/#715-10-05-6) Pending content: no Source downloaded (UTC): 2026-09-10T00:58:48.766Z to 2026-09-10T00:58:48.766Z Record version: sha256:344b6b81b3fa966db50ea4ec3e689e282058dfa32e5d4936a9d0c69a811982a9 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The guidance in this Topic is derived from the basic idea that a benefit plan is an exchange between the employer and the employee. In exchange for services provided by the employee, the employer promises to provide, in addition to current wages and other benefits, an amount of retirement income or benefit. It follows from that basic view that benefits are not gratuities but instead are part of an employee's compensation, and because payment is deferred, the benefit plan is a type of deferred compensation. It also follows that the employer's obligation for that compensation is incurred when the services are rendered. ##### [715-10-05-7](https://asc.understandingaccounting.org/asc/715/10/#715-10-05-7) Pending content: no Source downloaded (UTC): 2026-09-10T00:58:48.766Z to 2026-09-10T00:58:48.766Z Record version: sha256:eefb142099853f02c7c40f3930a2111754d7d1baf7b07c78cf4ee01bb55e6899 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A benefit plan is an arrangement that is mutually understood by an employer and its employees, whereby an employer undertakes to provide its current and former employees with benefits after they retire in exchange for the employees' services over a specified period of time, upon attaining a specified age while in service, or both. Benefits may commence immediately upon termination of service or may be deferred until retired employees attain a specified age. ##### [715-10-05-8](https://asc.understandingaccounting.org/asc/715/10/#715-10-05-8) Pending content: no Source downloaded (UTC): 2026-09-10T00:58:48.766Z to 2026-09-10T00:58:48.766Z Record version: sha256:2c115a3833d5a8086b6b1854f2c315d80cafbd0b0e28e792d6e39cbff0ccf6aa 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/). ##### [715-10-05-9](https://asc.understandingaccounting.org/asc/715/10/#715-10-05-9) Pending content: no Source downloaded (UTC): 2026-09-10T00:58:48.766Z to 2026-09-10T00:58:48.766Z Record version: sha256:1b4cd47ab17d37107717eb54217b96e5c17aafdc9f5bbf406c2aaf545158976c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Because the obligation to provide benefits arises as employees render the services necessary to earn the benefits pursuant to the terms of the plan, this Topic provides guidance regarding when the cost of providing the benefits should be recognized over those employee service periods. ##### [715-10-05-10](https://asc.understandingaccounting.org/asc/715/10/#715-10-05-10) Pending content: no Source downloaded (UTC): 2026-09-10T00:58:48.766Z to 2026-09-10T00:58:48.766Z Record version: sha256:30ff17ffe2dfcc36bf27cf71bf1e1124c02430eb4810b62199a43ef28048f688 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/). Source downloaded (UTC): 2026-09-10T00:58:51.957Z to 2026-09-10T00:58:51.957Z Record version: sha256:43a1d08d0f26441f54a585599128e65c16f625a8d9bf0386c0fa838c321f5921 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 715-10-10: 10 Objectives [Read section](https://asc.understandingaccounting.org/asc/715/10/#10-objectives) SEC content: no ##### [715-10-10-1](https://asc.understandingaccounting.org/asc/715/10/#715-10-10-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:58:51.957Z to 2026-09-10T00:58:51.957Z Record version: sha256:74c8ef1a36fbbdd10ac2660205515a0fc4e9e7b31ed2801f916b837475f75058 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The objectives of this Topic are as follows: 1. a To enhance the relevance and representational faithfulness of the employer's reported results of operations by recognizing net periodic pension cost and net periodic other postretirement benefit cost as employees render the services necessary to earn their pension and other postretirement benefits 2. b To enhance the relevance and representational faithfulness of the employer's statement of financial position by including a measure of the obligation to provide pension and other postretirement benefits based on a mutual understanding between the employer and its employees of the terms of the underlying plan 3. c To enhance the ability of users of the employer's financial statements to understand the extent and effects of the employer's undertaking to provide pension and other postretirement benefits to its employees by disclosing relevant information about the obligation and cost of the pension and other postretirement benefit plans and how those amounts are measured 4. d To improve the understandability and comparability of amounts reported by requiring employers with similar plans to use the same method to measure their pension and other postretirement benefit obligations and the related costs of the postretirement benefits. Source downloaded (UTC): 2026-09-10T00:58:55.606Z to 2026-09-10T00:58:55.606Z Record version: sha256:d6f5d140e07834928f86aaac578723f1c3e8cbec1ce54ce96c83419e18e8460d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 715-10-15: 15 Scope and Scope Exceptions [Read section](https://asc.understandingaccounting.org/asc/715/10/#15-scope-and-scope-exceptions) SEC content: no #### Overall Guidance ##### [715-10-15-1](https://asc.understandingaccounting.org/asc/715/10/#715-10-15-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:58:55.606Z to 2026-09-10T00:58:55.606Z Record version: sha256:c576e5f5c8ab6a6c4353a55ef885f4a83a7bda5ad415a66f89bbc7ad8a9688e7 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The Scope Section of the Overall Subtopic establishes the pervasive scope for all Subtopics of the Compensation—Retirement Benefits Topic. Unless explicitly addressed within specific Subtopics, the following scope guidance applies to all Subtopics of the Compensation—Retirement Benefits Topic. #### Entities ##### [715-10-15-2](https://asc.understandingaccounting.org/asc/715/10/#715-10-15-2) Pending content: no Source downloaded (UTC): 2026-09-10T00:58:55.606Z to 2026-09-10T00:58:55.606Z Record version: sha256:ae550a86b3ffb64c58ebd7a941b52ce392b8cf5b9dd21b9b35a06a13e3cb6774 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The guidance in the Compensation—Retirement Benefits Topic applies to all employers, including not-for-profit entities (NFPs), that offer pension or other postretirement benefits to their employees, regardless of whether the benefit obligation is funded. NFPs should refer to Subtopic 958-715 when applying the provisions of this Topic. #### Transactions ##### [715-10-15-3](https://asc.understandingaccounting.org/asc/715/10/#715-10-15-3) Pending content: no Source downloaded (UTC): 2026-09-10T00:58:55.606Z to 2026-09-10T00:58:55.606Z Record version: sha256:78e190aab00e6bd2e6d4d8e290180035a48b98ad0979cd5063498c4e7d5c35e3 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The guidance in the Compensation—Retirement Benefits Topic applies to the following types of benefit arrangements: 1. a Any arrangement that is in substance a pension or other postretirement benefit plan, regardless of its form or the means or timing of its funding 2. b Written plans and unwritten plans whose existence is discernible either from a practice of paying pension or other postretirement benefits or from oral representations made to current or former employees 3. c Deferred compensation contracts with individual employees if those contracts, taken together, are equivalent to a plan that provides pension or other postretirement benefits 4. d Health and other welfare benefits expected to be provided to employees deemed to be on a disability retirement. ##### [715-10-15-4](https://asc.understandingaccounting.org/asc/715/10/#715-10-15-4) Pending content: no Source downloaded (UTC): 2026-09-10T00:58:55.606Z to 2026-09-10T00:58:55.606Z Record version: sha256:59c2eb28384c5c98cc64e529ed3576b3312b7c726ea70d9475dc28c1148206b8 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The guidance in this Topic also applies to settlement of all or a part of an employer's pension or other postretirement benefit obligation or curtailment of a pension or other postretirement benefit plan. The guidance applies to employers that provide pension or other postretirement benefits as part of a special termination benefit or special or contractual termination benefits not otherwise addressed in other Subtopics (for example, benefits paid at or before retirement and not paid out of a pension or other postretirement plan). ##### [715-10-15-5](https://asc.understandingaccounting.org/asc/715/10/#715-10-15-5) Pending content: no Source downloaded (UTC): 2026-09-10T00:58:55.606Z to 2026-09-10T00:58:55.606Z Record version: sha256:40aea5bd01451131303c689d9db4a82e446a90f1bf4c62421f9b5e4b2913d825 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The guidance in this Topic does not apply to the following types of benefit arrangements: 1. a An employer's practice of providing pension or other postretirement benefits to selected employees under individual contracts with specific terms determined on an individual-by-individual basis. Those contracts shall be accounted for individually, following the terms of the contract. See Topic 710. 2. b Postemployment benefits paid after employment but before retirement (for example, layoff benefits), unless payable from a pension or other postretirement plan. See Topic 712. #### Other Considerations ##### [715-10-15-6](https://asc.understandingaccounting.org/asc/715/10/#715-10-15-6) Pending content: no Source downloaded (UTC): 2026-09-10T00:58:55.606Z to 2026-09-10T00:58:55.606Z Record version: sha256:b70d237790f80ebc96ae0bebe9ebd7dbf810ff202ba12f228262a850893ff104 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For purposes of preparing financial statements in accordance with accounting principles generally accepted in the United States, the Compensation—Retirement Benefits Topic includes no special provisions applicable to pension or other postretirement benefit plans or arrangements outside the United States. To the extent that those arrangements are in substance similar to pension or other postretirement benefit plans in the United States, they are subject to the provisions of this Topic. ##### [715-10-15-7](https://asc.understandingaccounting.org/asc/715/10/#715-10-15-7) Pending content: no Source downloaded (UTC): 2026-09-10T00:58:55.606Z to 2026-09-10T00:58:55.606Z Record version: sha256:ff8afc49ae64e96ed5bbcd71d681b23fac4ff8c8ef6f23b8bd9285d5eb9e225a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The applicability of this Topic to those plans or arrangements is determined by the nature of the obligation and by the terms or conditions that define the amount of benefits to be paid, not by whether or how a plan is funded, whether benefits are payable at intervals or as a single amount, or whether the benefits are required by law or custom or are provided under a plan the employer has elected to sponsor. ##### [715-10-15-8](https://asc.understandingaccounting.org/asc/715/10/#715-10-15-8) Pending content: no Source downloaded (UTC): 2026-09-10T00:58:55.606Z to 2026-09-10T00:58:55.606Z Record version: sha256:9e517e38bb5865c2e8733905c01ae8daa13ff9191fa7b5e06e636dc161b220f1 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Topic does not change or supersede any of the requirements set forth in Topic 960 for the financial statements of a defined benefit pension plan. Source downloaded (UTC): 2026-09-10T00:58:58.564Z to 2026-09-10T00:58:58.564Z Record version: sha256:b98f975807fbe5f5c9cc6f566b74d95a75160384ae6d37f0b0d0d8001b02f9c8 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 715-10-65: 65 Transition and Open Effective Date Information [Read section](https://asc.understandingaccounting.org/asc/715/10/#65-transition-and-open-effective-date-information) SEC content: no ##### [715-10-65-1](https://asc.understandingaccounting.org/asc/715/10/#715-10-65-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:58:58.564Z to 2026-09-10T00:58:58.564Z Record version: sha256:1573f9bcdab9f9e7281e2e3366a7ac9340e8ab0714677656e34b3d69449576b1 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Paragraph superseded on 06/20/2018 after the end of the transition period stated in Accounting Standards Update No. 2015-04, _Compensation—Retirement Benefits (Topic 715): Practical Expedient for the Measurement Date of an Employer's Defined Benefit Obligation and Plan Assets_. Source downloaded (UTC): 2026-09-10T00:59:02.764Z to 2026-09-10T00:59:47.246Z Record version: sha256:1a260d20258554fdef3a68b585af6803579c3a41faaa97a112f8b50a90ba2aee Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 715-20: Compensation—Retirement Benefits — Defined Benefit Plans—General ### Machine-generated study aids ```json { "summary": "ASC 715-20 governs the presentation and disclosure requirements for single-employer defined benefit pension and other postretirement benefit (OPEB) plans, and it confirms that a cash balance plan is a defined benefit plan. It requires employers to disclose, separately for pension and OPEB plans, reconciliations of the benefit obligation and plan assets, funded status and where it is recognized on the balance sheet, plan asset fair value information by class, weighted-average assumptions, expected future benefit payments and contributions, and amounts in AOCI not yet recognized in net periodic benefit cost. On the face of the income statement, only the service cost component goes with other compensation cost; all other components must be presented separately and outside any subtotal of income from operations.", "key_points": [ "An employer must provide the Section 715-20-50 disclosures separately for defined benefit pension plans and for other postretirement benefit plans (715-20-05-3; 715-20-50-1).", "Service cost is reported in the same income statement line as other employee compensation cost (except amounts capitalized into inventory or PP&E), while the other components of net periodic benefit cost—including settlement/curtailment gains or losses and certain termination benefit costs—are presented separately and outside any subtotal of income from operations (715-20-45-3A).", "The funded status must be presented on the balance sheet: an overfunded plan's asset is noncurrent, and an underfunded plan's liability is current to the extent the actuarial present value of benefits payable in the next 12 months (or operating cycle) exceeds plan asset fair value, capped at the recognized unfunded status (715-20-45-2 through 45-3).", "Required annual disclosures include reconciliations of the benefit obligation (PBO for pensions, APBO for OPEB) and of plan asset fair value, the accumulated benefit obligation, benefits expected to be paid in each of the next five years and in aggregate for the following five, next-year expected contributions, components of net benefit cost, OCI and AOCI amounts not yet recognized in cost, and weighted-average discount rates, compensation increase rates, expected long-term rates of return, and interest crediting rates (715-20-50-1(a)–(k)).", "Plan asset disclosures must convey investment policies and strategies, fair value by class, the basis for the expected long-term rate-of-return assumption, fair value hierarchy levels, and a Level 3 rollforward, with NAV practical expedient investments excluded from the hierarchy (715-20-50-1(d)).", "Disclosures are aggregated across all pension plans and across all OPEB plans unless disaggregation is useful, but aggregate presentation triggers disclosure of PBO/ABO/APBO and plan asset fair value for plans whose obligations exceed plan assets; non-U.S. plans may be combined unless significant and using significantly different assumptions (715-20-50-2 through 50-4).", "Nonpublic entities are exempt from 715-20-50-1(a)–(c), (h), (o)–(q), and (r)(2) and instead follow the reduced list in 715-20-50-5, while publicly traded entities must disclose net benefit cost components and materially changed contribution estimates in interim periods (715-20-50-5 through 50-7); a cash balance plan is a defined benefit plan because the benefit depends on the promised interest-crediting rate, not actual asset returns (715-20-25-1 through 25-3)." ], "categories": [ "Disclosure", "Presentation", "Compensation and benefits", "Fair value" ], "audience_level": "intermediate", "student_note": "Exam questions love the ASU 2017-07 split: service cost sits in operating compensation expense while interest cost, expected return, amortization, and settlement/curtailment effects must be shown below any operating income subtotal—students often wrongly lump all components into operating expense. Also remember the classification rule: an overfunded plan asset is always noncurrent, but an underfunded plan liability can be split current/noncurrent.", "related_topics": [ "715-30", "715-60", "715-10", "958-715", "820-10", "220-40" ], "key_concepts": [ "defined benefit pension plan", "other postretirement benefit plan", "funded status", "net periodic benefit cost", "service cost component", "projected benefit obligation", "plan assets fair value hierarchy", "cash balance plan" ] } ``` Source downloaded (UTC): 2026-09-10T00:59:02.764Z to 2026-09-10T00:59:02.764Z Record version: sha256:14687cff2a4d8b7b4a13864fceb4fc267c8729e2065bc2424106a8125fa1f063 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 715-20-00: 00 Status [Read section](https://asc.understandingaccounting.org/asc/715/20/#00-status) SEC content: no ##### [715-20-00-1](https://asc.understandingaccounting.org/asc/715/20/#715-20-00-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:59:02.764Z to 2026-09-10T00:59:02.764Z Record version: sha256:efd234e9d1cb6c00420df692966ff4a07b69382478a2c11aa24b0895db561655 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following table identifies the changes made to this Subtopic.
ParagraphActionAccounting Standards UpdateDate
Cash EquivalentsAddedAccounting Standards Update No. 2014-0603/14/2014
Conduit Debt SecurityAddedMaintenance Update 2014-20 (PDF)09/29/2014
Net Periodic Pension CostAmendedAccounting Standards Update No. 2017-0703/10/2017
Nonpublic Entity (1st Def.)AmendedMaintenance Update 2014-20 (PDF)09/29/2014
Nonpublic Entity (3rd Def.)AmendedMaintenance Update 2014-20 (PDF)09/29/2014
Public Business EntityAmendedMaintenance Update 2017-06 (PDF)04/07/2017
Public Business EntityAddedAccounting Standards Update No. 2017-0703/10/2017
715-20-05-1 through 05-3
AmendedAccounting Standards Update No. 2017-0703/10/2017
715-20-25-1 through 25-4
AddedAccounting Standards Update No. 2020-1010/29/2020
715-20-45-3AAddedAccounting Standards Update No. 2017-0703/10/2017
715-20-45-4SupersededAccounting Standards Update No. 2015-0101/09/2015
715-20-50-1AmendedAccounting Standards Update No. 2024-0311/04/2024
715-20-50-1AmendedMaintenance Update 2018-12 (PDF)09/10/2018
715-20-50-1AmendedAccounting Standards Update No. 2018-1408/28/2018
715-20-50-1AmendedAccounting Standards Update No. 2017-0703/10/2017
715-20-50-1AmendedAccounting Standards Update No. 2015-0705/01/2015
715-20-50-1AmendedAccounting Standards Update No. 2015-0404/15/2015
715-20-50-1AmendedAccounting Standards Update No. 2014-0603/14/2014
715-20-50-1AmendedAccounting Standards Update No. 2011-0405/12/2011
715-20-50-1AmendedAccounting Standards Update No. 2010-0601/21/2010
715-20-50-2AmendedAccounting Standards Update No. 2012-0410/01/2012
715-20-50-3AmendedAccounting Standards Update No. 2018-1408/28/2018
715-20-50-5AmendedAccounting Standards Update No. 2018-1408/28/2018
715-20-50-5AmendedAccounting Standards Update No. 2017-0703/10/2017
715-20-50-5AmendedAccounting Standards Update No. 2015-0705/01/2015
715-20-50-5AmendedAccounting Standards Update No. 2015-0404/15/2015
715-20-50-5AmendedAccounting Standards Update No. 2011-0405/12/2011
715-20-50-5AmendedAccounting Standards Update No. 2010-0601/21/2010
715-20-50-6AmendedAccounting Standards Update No. 2017-0703/10/2017
715-20-50-9SupersededAccounting Standards Update No. 2018-1408/28/2018
715-20-50-10SupersededAccounting Standards Update No. 2018-1408/28/2018
715-20-55-8AmendedMaintenance Update 2014-23 (PDF)11/03/2014
715-20-55-10AmendedMaintenance Update 2014-23 (PDF)11/03/2014
715-20-55-13AmendedAccounting Standards Update No. 2017-0703/10/2017
715-20-55-15 through 55-17
AmendedAccounting Standards Update No. 2018-1408/28/2018
715-20-55-17AmendedMaintenance Update 2018-12 (PDF)09/10/2018
715-20-55-17AmendedAccounting Standards Update No. 2017-0703/10/2017
715-20-55-17AmendedAccounting Standards Update No. 2010-0601/21/2010
715-20-55-18AmendedAccounting Standards Update No. 2017-0703/10/2017
715-20-65-1SupersededMaintenance Update 2014-23 (PDF)11/03/2014
715-20-65-3AddedAccounting Standards Update No. 2017-0703/10/2017
715-20-65-4AddedAccounting Standards Update No. 2018-1408/28/2018
Source downloaded (UTC): 2026-09-10T00:59:05.058Z to 2026-09-10T00:59:05.058Z Record version: sha256:e514fe73f6b67377bcfce57f4fd62a11d124a408d53ce00e863e045fec86f9fb Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 715-20-05: 05 Overview and Background [Read section](https://asc.understandingaccounting.org/asc/715/20/#05-overview-and-background) SEC content: no ##### [715-20-05-1](https://asc.understandingaccounting.org/asc/715/20/#715-20-05-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:59:05.058Z to 2026-09-10T00:59:05.058Z Record version: sha256:e02a2709d45a3767e37ff2c873662a9fb2caaf50b6b1dbbb57b18eeb27f8800d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subtopic provides guidance on the disclosure and other accounting and reporting requirements related to single-employer defined benefit pension and other postretirement benefit plans. 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/). ##### [715-20-05-2](https://asc.understandingaccounting.org/asc/715/20/#715-20-05-2) Pending content: no Source downloaded (UTC): 2026-09-10T00:59:05.058Z to 2026-09-10T00:59:05.058Z Record version: sha256:e0a3c033da07bec702fb2e30fd227dfad29d69796be074f5a1d87600e297cf0f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subtopic addresses: 1. a The content and organization of annual disclosures about defined benefit pension plans and other postretirement benefits 2. b Disclosures required for interim-period financial reports. 3. c Presentation matters about defined benefit pension and other postretirement benefit plans. ##### [715-20-05-3](https://asc.understandingaccounting.org/asc/715/20/#715-20-05-3) Pending content: no Source downloaded (UTC): 2026-09-10T00:59:05.058Z to 2026-09-10T00:59:05.058Z Record version: sha256:b2b6953ca2aefd06b2ceaed06935cf16b58cccd3c088e52c3bf601ca9704d584 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An employer that sponsors one or more defined benefit pension or other postretirement benefit plans is required to provide the information called for in Section 715-20-50 separately for pension plans and other postretirement benefit plans. Source downloaded (UTC): 2026-09-10T00:59:07.344Z to 2026-09-10T00:59:07.344Z Record version: sha256:fe1e78d240a5302e42a7c8836f06287f55bafd13d3b6413fb6819407013c31b7 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 715-20-15: 15 Scope and Scope Exceptions [Read section](https://asc.understandingaccounting.org/asc/715/20/#15-scope-and-scope-exceptions) SEC content: no #### Overall Guidance ##### [715-20-15-1](https://asc.understandingaccounting.org/asc/715/20/#715-20-15-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:59:07.344Z to 2026-09-10T00:59:07.344Z Record version: sha256:acc687720b2ef50b2a4ac8768e95d0782e393d256c44a836dae2860802c77162 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subtopic follows the same Scope and Scope Exceptions as outlined in the Overall Subtopic, see Section 715-10-15, with specific transaction qualifications noted below. #### Transactions ##### [715-20-15-2](https://asc.understandingaccounting.org/asc/715/20/#715-20-15-2) Pending content: no Source downloaded (UTC): 2026-09-10T00:59:07.344Z to 2026-09-10T00:59:07.344Z Record version: sha256:2f0a871266aba72b60678674bb15ad14e8e66a823398e38b44674c227bea606a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The guidance in this Subtopic applies to all single-employer defined benefit pension or other postretirement benefit plans. Source downloaded (UTC): 2026-09-10T00:59:13.244Z to 2026-09-10T00:59:13.244Z Record version: sha256:59b0a8c350048107dc705eccf2763709691e50c08511717abefac84607633602 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 715-20-25: 25 Recognition [Read section](https://asc.understandingaccounting.org/asc/715/20/#25-recognition) SEC content: no #### Cash Balance Plans ##### [715-20-25-1](https://asc.understandingaccounting.org/asc/715/20/#715-20-25-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:59:13.244Z to 2026-09-10T00:59:13.244Z Record version: sha256:f55ae00237caaf6d505d3cbf82d6f3491a41f746e5764b95f80617fc21390496 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A cash balance plan is a defined benefit plan. ##### [715-20-25-2](https://asc.understandingaccounting.org/asc/715/20/#715-20-25-2) Pending content: no Source downloaded (UTC): 2026-09-10T00:59:13.244Z to 2026-09-10T00:59:13.244Z Record version: sha256:55cfba106175800958bcc90f144393d0c5aa75db2b5286655cd0a73cf4cf6457 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A cash balance plan communicates to employees a pension benefit in the form of a current account balance that is based on principal credits and future interest credits based on those principal credits. ##### [715-20-25-3](https://asc.understandingaccounting.org/asc/715/20/#715-20-25-3) Pending content: no Source downloaded (UTC): 2026-09-10T00:59:13.244Z to 2026-09-10T00:59:13.244Z Record version: sha256:e10ef9dfac7e021f5687110518d42e5953ee7191de4c00d43fe7bcf97678a6ad Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In a cash balance plan, individual account balances are determined by reference to a hypothetical account rather than specific assets, and the benefit is dependent on the employer's promised interest-crediting rate, not the actual return on plan assets. The employer's financial obligation to the plan is not satisfied by making prescribed principal and interest credit contributions—whether in cash or as a hypothetical contribution to participants' accounts—for the period; rather, the employer must fund, over time, amounts that can accumulate to the actuarial present value of the benefit due at the time of distribution to each participant pursuant to the plan's terms. The employer's contributions to a cash balance plan trust and the earnings on the invested plan assets may be unrelated to the principal and interest credits to participants' hypothetical accounts. ##### [715-20-25-4](https://asc.understandingaccounting.org/asc/715/20/#715-20-25-4) Pending content: no Source downloaded (UTC): 2026-09-10T00:59:13.244Z to 2026-09-10T00:59:13.244Z Record version: sha256:5116facd8ebfe5bdee6a5e9c86592e08e6944e1bc83468f87faed7b5e253b269 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The determination of whether a plan is pay-related and the appropriate benefit attribution approach for a cash balance plan with other characteristics or for other types of defined benefit pension plans depend on an evaluation of the specific features of those benefit arrangements. See paragraphs [715-30-35-36 through 35-39](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-36) , [715-30-55-7 through 55-15](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-7) , and [715-30-55-127A](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-127A) (Example 8) for guidance on attribution approaches. Source downloaded (UTC): 2026-09-10T00:59:17.524Z to 2026-09-10T00:59:17.524Z Record version: sha256:7bdc32c766c131140f5147f592fd4a4c8c3019da82e067f0e8c09af8cf8f5d9a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 715-20-45: 45 Other Presentation Matters [Read section](https://asc.understandingaccounting.org/asc/715/20/#45-other-presentation-matters) SEC content: no #### Entities That Do Not Report Other Comprehensive Income, Other Than Not-for-Profit ##### [715-20-45-1](https://asc.understandingaccounting.org/asc/715/20/#715-20-45-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:59:17.524Z to 2026-09-10T00:59:17.524Z Record version: sha256:76e028fa7e3c226dbdd549605fdf4b1ed07404302811cc396fe00649d9ea7984 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An employer other than a not-for-profit employer that does not report other comprehensive income pursuant to Topic 220 shall apply the provisions of Sections 958-715-25, 958-715-35, 958-715-45, and 958-715-50 in an analogous manner that is appropriate for its method of reporting financial performance and financial position. #### Classification ##### [715-20-45-2](https://asc.understandingaccounting.org/asc/715/20/#715-20-45-2) Pending content: no Source downloaded (UTC): 2026-09-10T00:59:17.524Z to 2026-09-10T00:59:17.524Z Record version: sha256:ef3117ca9c3dd4d8f9c1789d8627521f119a42720438f5593c6e6ae06a56ff96 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An employer that sponsors one or more defined benefit pension plans or one or more defined benefit other postretirement plans shall provide separately for pension plans and other postretirement benefit plans the funded status of the plans and the amounts recognized in the statement of financial position, showing separately the assets and current and noncurrent liabilities recognized. ##### [715-20-45-3](https://asc.understandingaccounting.org/asc/715/20/#715-20-45-3) Pending content: no Source downloaded (UTC): 2026-09-10T00:59:17.524Z to 2026-09-10T00:59:17.524Z Record version: sha256:b298216839b65a879d75c4408babd9e18c3ee9dfb1037820fc82191db8e4e329 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An employer that presents a classified statement of financial position shall classify the liability for an underfunded plan as a current liability, a noncurrent liability, or a combination of both. The current portion (determined on a plan-by-plan basis) is the amount by which the actuarial present value of benefits included in the benefit obligation payable in the next 12 months, or operating cycle if longer, exceeds the fair value of plan assets. The asset for an overfunded plan shall be classified as a noncurrent asset in a classified statement of financial position. The amount classified as a current liability is limited to the amount of the plan's unfunded status recognized in the employer's statement of financial position. ##### [715-20-45-3A](https://asc.understandingaccounting.org/asc/715/20/#715-20-45-3A) Pending content: no Source downloaded (UTC): 2026-09-10T00:59:17.524Z to 2026-09-10T00:59:17.524Z Record version: sha256:ec108bf3a31c2952a1b1fe8b93eda37889c18a270783e903a8e6087c01740a9c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An employer shall report in the income statement: 1. a The service cost component 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.") and [net periodic postretirement benefit cost](https://asc.understandingaccounting.org/glossary/n/#net-periodic-postretirement-benefit-cost "The amount recognized in an employer's financial statements as the cost of a postretirement benefit plan for a period. Components of net periodic postretirement benefit cost include service cost, interest cost, actual return on plan assets, gain or loss, amortization of prior service cost or credit, and amortization of the transition obligation or asset.") in the same line item or items as other compensation costs arising from services rendered by the pertinent employees during the period (except for the amount being capitalized, if appropriate, in connection with the production or construction of an asset such as inventory or property, plant, and equipment) 2. b The other components as defined in paragraphs [715-30-35-4](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-4) and [715-60-35-9](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-9) separately from the service cost component and outside a subtotal of income from operations, if one is presented. If a separate line item or items are used to present the other components, that line item or items shall be described appropriately. For the purpose of applying the guidance in this paragraph, a gain or loss from a settlement or curtailment or the cost of certain termination benefits accounted for under this Topic shall be reported in the same way as the other components in (b). ##### [715-20-45-4](https://asc.understandingaccounting.org/asc/715/20/#715-20-45-4) Pending content: no Source downloaded (UTC): 2026-09-10T00:59:17.524Z to 2026-09-10T00:59:17.524Z Record version: sha256:9cfb59605ca9f99b6ce17f1e7fb117eabfbd546ba339390d7a915c9277d8b413 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2015-01](https://asc.understandingaccounting.org/updates/asu-2015-01/). Source downloaded (UTC): 2026-09-10T00:59:19.746Z to 2026-09-10T00:59:19.746Z Record version: sha256:5a7c5d70b06b3849a944203290b938174abba6b9b9fc26bb362b3c2b19caf05e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 715-20-50: 50 Disclosure [Read section](https://asc.understandingaccounting.org/asc/715/20/#50-disclosure) SEC content: no #### Disclosures by Public Entities ##### [715-20-50-1](https://asc.understandingaccounting.org/asc/715/20/#715-20-50-1) Pending content: yes Source downloaded (UTC): 2026-09-10T00:59:19.746Z to 2026-09-10T00:59:19.746Z Record version: sha256:0a295322a9b0ea8e405aa4bfe93024c83784a671e2ac7c11a9f6d1b10e712188 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An employer that sponsors one or more defined benefit pension plans or one or more defined benefit other postretirement plans shall provide the following information, separately for pension plans and other postretirement benefit plans. Amounts related to the employer's results of operations shall be disclosed for each period for which a statement of income is presented. Amounts related to the employer's statement of financial position shall be disclosed as of the date of each statement of financial position presented. All of the following shall be disclosed: 1. a A reconciliation of beginning and ending balances of the benefit obligation showing separately, if applicable, the effects during the period attributable to each of the following: 1. 1 Service cost 2. 2 Interest cost 3. 3 Contributions by plan participants 4. 4 Actuarial gains and losses 5. 5 Foreign currency exchange rate changes (The effects of foreign currency exchange rate changes that are to be disclosed are those applicable to plans of a foreign operation whose functional currency is not the reporting currency pursuant to Section 830-10-45.) 6. 6 Benefits paid 7. 7 Plan amendments 8. 8 Business combinations 9. 9 Divestitures 10. 10 Curtailments, settlements, and special and contractual termination benefits. For defined benefit pension plans, the benefit obligation is the projected benefit obligation. For defined benefit other postretirement plans, the benefit obligation is the accumulated postretirement benefit obligation. 2. b A reconciliation of beginning and ending balances of the fair value of plan assets showing separately, if applicable, the effects during the period attributable to each of the following: 1. 1 Actual return on plan assets 2. 2 Foreign currency exchange rate changes (see (a)(5)) 3. 3 Contributions by the employer 4. 4 Contributions by plan participants 5. 5 Benefits paid 6. 6 Business combinations 7. 7 Divestitures 8. 8 Settlements. 3. c The funded status of the plans and the amounts recognized in the statement of financial position, showing separately the assets and current and noncurrent liabilities recognized. 4. d The objectives of the disclosures about postretirement benefit plan assets are to provide users of financial statements with an understanding of: 1. 1 How investment allocation decisions are made, including the factors that are pertinent to an understanding of investment policies and strategies 2. 2 The classes of plan assets 3. 3 The inputs and valuation techniques used to measure the fair value of plan assets 4. 4 The effect of fair value measurements using significant unobservable inputs (Level 3) on changes in plan assets for the period 5. 5 Significant concentrations of risk within plan assets. An employer shall consider those overall objectives in providing the following information about plan assets: 1. i A narrative description of investment policies and strategies, including target allocation percentages or range of percentages considering the classes of plan assets disclosed pursuant to (ii) below, as of the latest statement of financial position presented (on a weighted-average basis for employers with more than one plan), and other factors that are pertinent to an understanding of those policies and strategies such as investment goals, risk management practices, permitted and prohibited investments including the use of derivatives, diversification, and the relationship between plan assets and benefit obligations. For investment funds disclosed as classes as described in (ii) below, a description of the significant investment strategies of those funds shall be provided. 2. ii The fair value of each class of plan assets as of each date for which a statement of financial position is presented. For additional guidance on determining appropriate classes of plan assets, see paragraph [820-10-50-2B](https://asc.understandingaccounting.org/asc/820/10/#820-10-50-2B). Examples of classes of assets could include, but are not limited to, the following: cash and [cash equivalents](https://asc.understandingaccounting.org/glossary/c/#cash-equivalents "Cash equivalents are short-term, highly liquid investments that have both of the following characteristics: Readily convertible to known amounts of cash So near their maturity that they present insignificant risk of changes in value because of changes in interest rates. Generally, only investments with original maturities of three months or less qualify under that definition. Original maturity means original maturity to the entity holding the investment. For example, both a three-month U.S. Treasury bill and a three-year U.S. Treasury note purchased three months from maturity qualify as cash equivalents. However, a Treasury note purchased three years ago does not become a cash equivalent when its remaining maturity is three months. Examples of items commonly considered to be cash equivalents are Treasury bills, commercial paper, money market funds, and federal funds sold (for an entity with banking operations)."); equity securities (segregated by industry type, company size, or investment objective); debt securities issued by national, state, and local governments; corporate debt securities; asset-backed securities; structured debt; derivatives on a gross basis (segregated by type of underlying risk in the contract, for example, interest rate contracts, foreign exchange contracts, equity contracts, commodity contracts, credit contracts, and other contracts); investment funds (segregated by type of fund); and real estate. Those examples are not meant to be all inclusive. An employer should consider the overall objectives in paragraph [715-20-50-1(d)(1) through (5)](https://asc.understandingaccounting.org/asc/715/20/#715-20-50-1) in determining whether additional classes of plan assets or further disaggregation of classes should be disclosed. If an employer determines the measurement date of plan assets in accordance with paragraph [715-30-35-63A](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-63A) or [715-60-35-123A](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-123A) and the employer contributes assets to the plan between the measurement date and its fiscal year-end, the employer shall not adjust the fair value of each class of plan assets for the effects of the contribution. Instead, the employer shall disclose the amount of the contribution to permit reconciliation of the total fair value of all the classes of plan assets to the ending balance of the fair value of plan assets. For example, the contribution could be disclosed as follows: - ![](https://asc.understandingaccounting.org/asc-img/GUID-6A351B2A-3F40-4FC6-A98E-2B9660FC9F02-low.gif) Fair Value Measurements at "February 3, 20X5 (in thousands)" Asset Class Total "Quoted Prices in Active Markets for Identical Assets (Level 1)" "Significant Observable Inputs (Level 2)" "Significant Unobservable Inputs (Level 3)" Cash " $14,770 " " $14,770 " $- $- Equity securities: U.S. companies " 41,200 " " 37,000 " " 1,200 " " 3,000 " International companies " 32,900 " " 24,000 " " 7,600 " " 1,300 " Mortgage-backed securities " 13,335 " - " 12,780 " 555 Assets at fair value at measurement date of 1/31/20X5 " 102,205 " " $75,770 " " $21,580 " " $4,855 " Contributions after measurement date " 25,000 " Total assets reported at 2/3/20X5 " $127,205 " 3. iii A narrative description of the basis used to determine the overall expected long-term rate-of-return-on-assets assumption, such as the general approach used, the extent to which the overall rate-of-return-on-assets assumption was based on historical returns, the extent to which adjustments were made to those historical returns in order to reflect expectations of future returns, and how those adjustments were determined. The description should consider the classes of assets as described in (ii) above, as appropriate. 4. iv Information that enables users of financial statements to assess the inputs and valuation techniques used to develop fair value measurements of plan assets at the reporting date. For fair value measurements using significant unobservable inputs, an employer shall disclose the effect of the measurements on changes in plan assets for the period. To meet those objectives, the employer shall disclose the following information for each class of plan assets disclosed pursuant to (ii) above for each annual period: 1. 01 The level of the fair value hierarchy within which the fair value measurements are categorized in their entirety, segregating fair value measurements using quoted prices in active markets for identical assets or liabilities (Level 1), significant other observable inputs (Level 2), and significant unobservable inputs (Level 3). The guidance in paragraphs [820-10-35-37 through 35-37A](https://asc.understandingaccounting.org/asc/820/10/#820-10-35-37) is applicable. Investments for which fair value is measured using the net asset value per share (or its equivalent) practical expedient in paragraph [820-10-35-59](https://asc.understandingaccounting.org/asc/820/10/#820-10-35-59) shall not be categorized within the fair value hierarchy, as noted by paragraph [820-10-35-54B](https://asc.understandingaccounting.org/asc/820/10/#820-10-35-54B). If an employer determines the measurement date of plan assets in accordance with paragraph [715-30-35-63A](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-63A) or [715-60-35-123A](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-123A) and the employer contributes assets to the plan between the measurement date and its fiscal year-end, the employer shall not adjust the fair value of each class of plan assets for the effects of the contribution. Instead, the employer shall disclose the amount of the contribution to permit reconciliation of the total fair value of all plan assets in the fair value hierarchy to the ending balance of the fair value of plan assets. For example, the contribution could be disclosed as follows: - ![](https://asc.understandingaccounting.org/asc-img/GUID-6A351B2A-3F40-4FC6-A98E-2B9660FC9F02-low.gif) Fair Value Measurements at "February 3, 20X5 (in thousands)" Asset Class Total "Quoted Prices in Active Markets for Identical Assets (Level 1)" "Significant Observable Inputs (Level 2)" "Significant Unobservable Inputs (Level 3)" Cash " $14,770 " " $14,770 " $- $- Equity securities: U.S. companies " 41,200 " " 37,000 " " 1,200 " " 3,000 " International companies " 32,900 " " 24,000 " " 7,600 " " 1,300 " Mortgage-backed securities " 13,335 " - " 12,780 " 555 Assets at fair value at measurement date of 1/31/20X5 " 102,205 " " $75,770 " " $21,580 " " $4,855 " Contributions after measurement date " 25,000 " Total assets reported at 2/3/20X5 " $127,205 " 2. 02 For fair value measurements of plan assets using significant unobservable inputs (Level 3), a reconciliation from the opening balances to the closing balances, disclosing separately changes during the period attributable to the following: 1. A Actual Return on Plan Assets (Component of [Net Periodic Postretirement Benefit Cost](https://asc.understandingaccounting.org/glossary/n/#net-periodic-postretirement-benefit-cost "The amount recognized in an employer's financial statements as the cost of a postretirement benefit plan for a period. Components of net periodic postretirement benefit cost include service cost, interest cost, actual return on plan assets, gain or loss, amortization of prior service cost or credit, and amortization of the transition obligation or asset.")) or Actual Return on Plan Assets (Component 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.")), separately identifying the amount related to assets still held at the reporting date and the amount related to assets sold during the period 2. B Purchases, sales, and settlements, net 3. C The amounts of any transfers into or out of Level 3 (for example, transfers due to changes in the observability of significant inputs). 3. 03 Information about the valuation technique(s) and inputs used to measure fair value and a discussion of changes in valuation techniques and inputs, if any, during the period. 5. e For defined benefit pension plans, the accumulated benefit obligation. 6. f The benefits (as of the date of the latest statement of financial position presented) expected to be paid in each of the next five fiscal years, and in the aggregate for the five fiscal years thereafter. The expected benefits shall be estimated based on the same assumptions used to measure the entity's benefit obligation at the end of the year and shall include benefits attributable to estimated future employee service. 7. g The employer's best estimate, as soon as it can reasonably be determined, of contributions expected to be paid to the plan during the next fiscal year beginning after the date of the latest statement of financial position presented. Estimated contributions may be presented in the aggregate combining all of the following: 1. 1 Contributions required by funding regulations or laws 2. 2 Discretionary contributions 3. 3 Noncash contributions. 8. h The amount of net benefit cost recognized, showing separately all of the following: 1. 1 The service cost component 2. 2 The interest cost component 3. 3 The expected return on plan assets for the period 4. 4 The gain or loss component 5. 5 The prior service cost or credit component 6. 6 The transition asset or obligation component 7. 7 The gain or loss recognized due to settlements or curtailments. The line item(s) used in the income statement to present the components other than the service cost component shall be disclosed if the other components are not presented in a separate line item or items in the income statement. 9. i Separately the net gain or loss and net prior service cost or credit recognized in other comprehensive income for the period pursuant to paragraphs [715-30-35-11](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-11), [715-30-35-21](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-21), [715-60-35-16](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-16), and [715-60-35-25](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-25), and reclassification adjustments of other comprehensive income for the period, as those amounts, including amortization of the net transition asset or obligation, are recognized as components of net periodic benefit cost. 10. j The amounts in accumulated other comprehensive income that have not yet been recognized as components of net periodic benefit cost, showing separately the net gain or loss, net prior service cost or credit, and net transition asset or obligation. 11. k On a weighted-average basis, all of the following assumptions used in the accounting for the plans, specifying in a tabular format, the assumptions used to determine the benefit obligation and the assumptions used to determine net benefit cost: 1. 1 Discount rates (see paragraph [715-30-35-45](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-45) for a discussion of representationally faithful disclosure) 2. 2 Rates of compensation increase (for pay-related plans) 3. 3 Expected long-term rates of return on plan assets. 4. 4 Interest crediting rates (for cash balance plans and other plans with promised interest crediting rates). 12. l The assumed health care cost trend rate(s) for the next year used to measure the expected cost of benefits covered by the plan (gross eligible charges), and a general description of the direction and pattern of change in the assumed trend rates thereafter, together with the ultimate trend rate(s) and when that rate is expected to be achieved. 13. m [Subparagraph superseded by Accounting Standards Update No. 2018-14](https://asc.understandingaccounting.org/updates/asu-2018-14/). 14. n If applicable, the amounts and types of securities of the employer and [related parties](https://asc.understandingaccounting.org/glossary/r/#related-parties "Related parties include: Affiliates of the entity Entities for which investments in their equity securities would be required, absent the election of the fair value option under the Fair Value Option Subsection of Section 825-10-15, to be accounted for by the equity method by the investing entity Trusts for the benefit of employees, such as pension and profit-sharing trusts that are managed by or under the trusteeship of management Principal owners of the entity and members of their immediate families Management of the entity and members of their immediate families Other parties with which the entity may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests Other parties that can significantly influence the management or operating policies of the transacting parties or that have an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests.") included in plan assets. 15. o If applicable, any alternative method used to amortize prior service amounts or net gains and losses pursuant to paragraphs [715-30-35-13](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-13) and [715-30-35-25](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-25) or [715-60-35-18](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-18) and [715-60-35-31](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-31). 16. p If applicable, any substantive commitment, such as past practice or a history of regular benefit increases, used as the basis for accounting for the benefit obligation. 17. q If applicable, the cost of providing special or contractual termination benefits recognized during the period and a description of the nature of the event. 18. r An explanation of the following information: 1. 1 The reasons for significant gains and losses related to changes in the defined benefit obligation for the period 2. 2 Any other significant change in the benefit obligation or plan assets not otherwise apparent in the other disclosures required by this Subtopic. 19. s [Subparagraph superseded by Accounting Standards Update No. 2018-14](https://asc.understandingaccounting.org/updates/asu-2018-14/). 20. t [Subparagraph superseded by Accounting Standards Update No. 2018-14](https://asc.understandingaccounting.org/updates/asu-2018-14/). 21. u If applicable, the accounting policy election to measure plan assets and benefit obligations using the month-end that is closest to the employer's fiscal year-end in accordance with paragraph [715-30-35-63A](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-63A) or [715-60-35-123A](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-123A) and the month-end measurement date. Transition date:(P) December 16, 2026; (N) December 16, 2026Transition guidance: [220-40-65-1](https://asc.understandingaccounting.org/asc/220/40/#220-40-65-1)An employer that sponsors one or more defined benefit pension plans or one or more defined benefit other postretirement plans shall provide the following information, separately for pension plans and other postretirement benefit plans. Amounts related to the employer's results of operations shall be disclosed for each period for which a statement of income is presented. Amounts related to the employer's statement of financial position shall be disclosed as of the date of each statement of financial position presented. All of the following shall be disclosed: 1. a A reconciliation of beginning and ending balances of the benefit obligation showing separately, if applicable, the effects during the period attributable to each of the following: 1. 1 Service cost 2. 2 Interest cost 3. 3 Contributions by plan participants 4. 4 Actuarial gains and losses 5. 5 Foreign currency exchange rate changes (The effects of foreign currency exchange rate changes that are to be disclosed are those applicable to plans of a foreign operation whose functional currency is not the reporting currency pursuant to Section 830-10-45.) 6. 6 Benefits paid 7. 7 Plan amendments 8. 8 Business combinations 9. 9 Divestitures 10. 10 Curtailments, settlements, and special and contractual termination benefits. For defined benefit pension plans, the benefit obligation is the projected benefit obligation. For defined benefit other postretirement plans, the benefit obligation is the accumulated postretirement benefit obligation. 2. b A reconciliation of beginning and ending balances of the fair value of plan assets showing separately, if applicable, the effects during the period attributable to each of the following: 1. 1 Actual return on plan assets 2. 2 Foreign currency exchange rate changes (see (a)(5)) 3. 3 Contributions by the employer 4. 4 Contributions by plan participants 5. 5 Benefits paid 6. 6 Business combinations 7. 7 Divestitures 8. 8 Settlements. 3. c The funded status of the plans and the amounts recognized in the statement of financial position, showing separately the assets and current and noncurrent liabilities recognized. 4. d The objectives of the disclosures about postretirement benefit plan assets are to provide users of financial statements with an understanding of: 1. 1 How investment allocation decisions are made, including the factors that are pertinent to an understanding of investment policies and strategies 2. 2 The classes of plan assets 3. 3 The inputs and valuation techniques used to measure the fair value of plan assets 4. 4 The effect of fair value measurements using significant unobservable inputs (Level 3) on changes in plan assets for the period 5. 5 Significant concentrations of risk within plan assets. An employer shall consider those overall objectives in providing the following information about plan assets: 1. i A narrative description of investment policies and strategies, including target allocation percentages or range of percentages considering the classes of plan assets disclosed pursuant to (ii) below, as of the latest statement of financial position presented (on a weighted-average basis for employers with more than one plan), and other factors that are pertinent to an understanding of those policies and strategies such as investment goals, risk management practices, permitted and prohibited investments including the use of derivatives, diversification, and the relationship between plan assets and benefit obligations. For investment funds disclosed as classes as described in (ii) below, a description of the significant investment strategies of those funds shall be provided. 2. ii The fair value of each class of plan assets as of each date for which a statement of financial position is presented. For additional guidance on determining appropriate classes of plan assets, see paragraph [820-10-50-2B](https://asc.understandingaccounting.org/asc/820/10/#820-10-50-2B). Examples of classes of assets could include, but are not limited to, the following: cash and [cash equivalents](https://asc.understandingaccounting.org/glossary/c/#cash-equivalents "Cash equivalents are short-term, highly liquid investments that have both of the following characteristics: Readily convertible to known amounts of cash So near their maturity that they present insignificant risk of changes in value because of changes in interest rates. Generally, only investments with original maturities of three months or less qualify under that definition. Original maturity means original maturity to the entity holding the investment. For example, both a three-month U.S. Treasury bill and a three-year U.S. Treasury note purchased three months from maturity qualify as cash equivalents. However, a Treasury note purchased three years ago does not become a cash equivalent when its remaining maturity is three months. Examples of items commonly considered to be cash equivalents are Treasury bills, commercial paper, money market funds, and federal funds sold (for an entity with banking operations)."); equity securities (segregated by industry type, company size, or investment objective); debt securities issued by national, state, and local governments; corporate debt securities; asset-backed securities; structured debt; derivatives on a gross basis (segregated by type of underlying risk in the contract, for example, interest rate contracts, foreign exchange contracts, equity contracts, commodity contracts, credit contracts, and other contracts); investment funds (segregated by type of fund); and real estate. Those examples are not meant to be all inclusive. An employer should consider the overall objectives in paragraph [715-20-50-1(d)(1) through (5)](https://asc.understandingaccounting.org/asc/715/20/#715-20-50-1) in determining whether additional classes of plan assets or further disaggregation of classes should be disclosed. If an employer determines the measurement date of plan assets in accordance with paragraph [715-30-35-63A](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-63A) or [715-60-35-123A](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-123A) and the employer contributes assets to the plan between the measurement date and its fiscal year-end, the employer shall not adjust the fair value of each class of plan assets for the effects of the contribution. Instead, the employer shall disclose the amount of the contribution to permit reconciliation of the total fair value of all the classes of plan assets to the ending balance of the fair value of plan assets. For example, the contribution could be disclosed as follows: - ![](https://asc.understandingaccounting.org/asc-img/GUID-6A351B2A-3F40-4FC6-A98E-2B9660FC9F02-low.gif) Fair Value Measurements at "February 3, 20X5 (in thousands)" Asset Class Total "Quoted Prices in Active Markets for Identical Assets (Level 1)" "Significant Observable Inputs (Level 2)" "Significant Unobservable Inputs (Level 3)" Cash " $14,770 " " $14,770 " $- $- Equity securities: U.S. companies " 41,200 " " 37,000 " " 1,200 " " 3,000 " International companies " 32,900 " " 24,000 " " 7,600 " " 1,300 " Mortgage-backed securities " 13,335 " - " 12,780 " 555 Assets at fair value at measurement date of 1/31/20X5 " 102,205 " " $75,770 " " $21,580 " " $4,855 " Contributions after measurement date " 25,000 " Total assets reported at 2/3/20X5 " $127,205 " 3. iii A narrative description of the basis used to determine the overall expected long-term rate-of-return-on-assets assumption, such as the general approach used, the extent to which the overall rate-of-return-on-assets assumption was based on historical returns, the extent to which adjustments were made to those historical returns in order to reflect expectations of future returns, and how those adjustments were determined. The description should consider the classes of assets as described in (ii) above, as appropriate. 4. iv Information that enables users of financial statements to assess the inputs and valuation techniques used to develop fair value measurements of plan assets at the reporting date. For fair value measurements using significant unobservable inputs, an employer shall disclose the effect of the measurements on changes in plan assets for the period. To meet those objectives, the employer shall disclose the following information for each class of plan assets disclosed pursuant to (ii) above for each annual period: 1. 01 The level of the fair value hierarchy within which the fair value measurements are categorized in their entirety, segregating fair value measurements using quoted prices in active markets for identical assets or liabilities (Level 1), significant other observable inputs (Level 2), and significant unobservable inputs (Level 3). The guidance in paragraphs [820-10-35-37 through 35-37A](https://asc.understandingaccounting.org/asc/820/10/#820-10-35-37) is applicable. Investments for which fair value is measured using the net asset value per share (or its equivalent) practical expedient in paragraph [820-10-35-59](https://asc.understandingaccounting.org/asc/820/10/#820-10-35-59) shall not be categorized within the fair value hierarchy, as noted by paragraph [820-10-35-54B](https://asc.understandingaccounting.org/asc/820/10/#820-10-35-54B). If an employer determines the measurement date of plan assets in accordance with paragraph [715-30-35-63A](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-63A) or [715-60-35-123A](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-123A) and the employer contributes assets to the plan between the measurement date and its fiscal year-end, the employer shall not adjust the fair value of each class of plan assets for the effects of the contribution. Instead, the employer shall disclose the amount of the contribution to permit reconciliation of the total fair value of all plan assets in the fair value hierarchy to the ending balance of the fair value of plan assets. For example, the contribution could be disclosed as follows: - ![](https://asc.understandingaccounting.org/asc-img/GUID-6A351B2A-3F40-4FC6-A98E-2B9660FC9F02-low.gif) Fair Value Measurements at "February 3, 20X5 (in thousands)" Asset Class Total "Quoted Prices in Active Markets for Identical Assets (Level 1)" "Significant Observable Inputs (Level 2)" "Significant Unobservable Inputs (Level 3)" Cash " $14,770 " " $14,770 " $- $- Equity securities: U.S. companies " 41,200 " " 37,000 " " 1,200 " " 3,000 " International companies " 32,900 " " 24,000 " " 7,600 " " 1,300 " Mortgage-backed securities " 13,335 " - " 12,780 " 555 Assets at fair value at measurement date of 1/31/20X5 " 102,205 " " $75,770 " " $21,580 " " $4,855 " Contributions after measurement date " 25,000 " Total assets reported at 2/3/20X5 " $127,205 " 2. 02 For fair value measurements of plan assets using significant unobservable inputs (Level 3), a reconciliation from the opening balances to the closing balances, disclosing separately changes during the period attributable to the following: 1. A Actual Return on Plan Assets (Component of [Net Periodic Postretirement Benefit Cost](https://asc.understandingaccounting.org/glossary/n/#net-periodic-postretirement-benefit-cost "The amount recognized in an employer's financial statements as the cost of a postretirement benefit plan for a period. Components of net periodic postretirement benefit cost include service cost, interest cost, actual return on plan assets, gain or loss, amortization of prior service cost or credit, and amortization of the transition obligation or asset.")) or Actual Return on Plan Assets (Component 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.")), separately identifying the amount related to assets still held at the reporting date and the amount related to assets sold during the period 2. B Purchases, sales, and settlements, net 3. C The amounts of any transfers into or out of Level 3 (for example, transfers due to changes in the observability of significant inputs). 3. 03 Information about the valuation technique(s) and inputs used to measure fair value and a discussion of changes in valuation techniques and inputs, if any, during the period. 5. e For defined benefit pension plans, the accumulated benefit obligation. 6. f The benefits (as of the date of the latest statement of financial position presented) expected to be paid in each of the next five fiscal years, and in the aggregate for the five fiscal years thereafter. The expected benefits shall be estimated based on the same assumptions used to measure the entity's benefit obligation at the end of the year and shall include benefits attributable to estimated future employee service. 7. g The employer's best estimate, as soon as it can reasonably be determined, of contributions expected to be paid to the plan during the next fiscal year beginning after the date of the latest statement of financial position presented. Estimated contributions may be presented in the aggregate combining all of the following: 1. 1 Contributions required by funding regulations or laws 2. 2 Discretionary contributions 3. 3 Noncash contributions. 8. h The amount of net benefit cost recognized, showing separately all of the following: 1. 1 The service cost component 2. 2 The interest cost component 3. 3 The expected return on plan assets for the period 4. 4 The gain or loss component 5. 5 The prior service cost or credit component 6. 6 The transition asset or obligation component 7. 7 The gain or loss recognized due to settlements or curtailments. The line item(s) used in the income statement to present the components other than the service cost component shall be disclosed if the other components are not presented in a separate line item or items in the income statement. See paragraphs [220-40-50-21 through 50-25](https://asc.understandingaccounting.org/asc/220/40/#220-40-50-21) for additional disclosure requirements. 9. i Separately the net gain or loss and net prior service cost or credit recognized in other comprehensive income for the period pursuant to paragraphs [715-30-35-11](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-11), [715-30-35-21](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-21), [715-60-35-16](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-16), and [715-60-35-25](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-25), and reclassification adjustments of other comprehensive income for the period, as those amounts, including amortization of the net transition asset or obligation, are recognized as components of net periodic benefit cost. 10. j The amounts in accumulated other comprehensive income that have not yet been recognized as components of net periodic benefit cost, showing separately the net gain or loss, net prior service cost or credit, and net transition asset or obligation. 11. k On a weighted-average basis, all of the following assumptions used in the accounting for the plans, specifying in a tabular format, the assumptions used to determine the benefit obligation and the assumptions used to determine net benefit cost: 1. 1 Discount rates (see paragraph [715-30-35-45](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-45) for a discussion of representationally faithful disclosure) 2. 2 Rates of compensation increase (for pay-related plans) 3. 3 Expected long-term rates of return on plan assets. 4. 4 Interest crediting rates (for cash balance plans and other plans with promised interest crediting rates). 12. l The assumed health care cost trend rate(s) for the next year used to measure the expected cost of benefits covered by the plan (gross eligible charges), and a general description of the direction and pattern of change in the assumed trend rates thereafter, together with the ultimate trend rate(s) and when that rate is expected to be achieved. 13. m [Subparagraph superseded by Accounting Standards Update No. 2018-14](https://asc.understandingaccounting.org/updates/asu-2018-14/). 14. n If applicable, the amounts and types of securities of the employer and [related parties](https://asc.understandingaccounting.org/glossary/r/#related-parties "Related parties include: Affiliates of the entity Entities for which investments in their equity securities would be required, absent the election of the fair value option under the Fair Value Option Subsection of Section 825-10-15, to be accounted for by the equity method by the investing entity Trusts for the benefit of employees, such as pension and profit-sharing trusts that are managed by or under the trusteeship of management Principal owners of the entity and members of their immediate families Management of the entity and members of their immediate families Other parties with which the entity may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests Other parties that can significantly influence the management or operating policies of the transacting parties or that have an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests.") included in plan assets. 15. o If applicable, any alternative method used to amortize prior service amounts or net gains and losses pursuant to paragraphs [715-30-35-13](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-13) and [715-30-35-25](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-25) or [715-60-35-18](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-18) and [715-60-35-31](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-31). 16. p If applicable, any substantive commitment, such as past practice or a history of regular benefit increases, used as the basis for accounting for the benefit obligation. 17. q If applicable, the cost of providing special or contractual termination benefits recognized during the period and a description of the nature of the event. 18. r An explanation of the following information: 1. 1 The reasons for significant gains and losses related to changes in the defined benefit obligation for the period 2. 2 Any other significant change in the benefit obligation or plan assets not otherwise apparent in the other disclosures required by this Subtopic. 19. s [Subparagraph superseded by Accounting Standards Update No. 2018-14](https://asc.understandingaccounting.org/updates/asu-2018-14/). 20. t [Subparagraph superseded by Accounting Standards Update No. 2018-14](https://asc.understandingaccounting.org/updates/asu-2018-14/). 21. u If applicable, the accounting policy election to measure plan assets and benefit obligations using the month-end that is closest to the employer's fiscal year-end in accordance with paragraph [715-30-35-63A](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-63A) or [715-60-35-123A](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-123A) and the month-end measurement date. #### Entities (Public and Nonpublic) with Two or More Plans ##### [715-20-50-2](https://asc.understandingaccounting.org/asc/715/20/#715-20-50-2) Pending content: no Source downloaded (UTC): 2026-09-10T00:59:19.746Z to 2026-09-10T00:59:19.746Z Record version: sha256:1f1e7308a51044228328187deb8bd4c94cda626410e46198d4c815e58fbf007b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The disclosures required by this Subtopic shall be aggregated for all of an employer's defined benefit pension plans and for all of an employer's other defined benefit postretirement plans unless disaggregating in groups is considered to provide useful information or is otherwise required by the following paragraph and paragraph [715-20-50-4](https://asc.understandingaccounting.org/asc/715/20/#715-20-50-4). ##### [715-20-50-3](https://asc.understandingaccounting.org/asc/715/20/#715-20-50-3) Pending content: no Source downloaded (UTC): 2026-09-10T00:59:19.746Z to 2026-09-10T00:59:19.746Z Record version: sha256:198c05edc705d3cbbec806d1997ba09b0345e51754aaeb5de7ed4eca0ffaa6aa Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If aggregate disclosures are presented, an employer shall disclose, as of the date of each statement of financial position presented, both of the following: 1. a For pension plans, the projected benefit obligation and fair value of plan assets for plans with projected benefit obligations in excess of plan assets, and the accumulated benefit obligation and fair value of plan assets for plans with accumulated benefit obligations in excess of plan assets 2. b For other postretirement benefit plans, the accumulated postretirement benefit obligation and fair value of plan assets for plans with accumulated postretirement benefit obligations in excess of plan assets. ##### [715-20-50-4](https://asc.understandingaccounting.org/asc/715/20/#715-20-50-4) Pending content: no Source downloaded (UTC): 2026-09-10T00:59:19.746Z to 2026-09-10T00:59:19.746Z Record version: sha256:3fbd08059b45898864701b00f1055ef993dc82cbe244d107057860aadb836304 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A U.S. reporting entity may combine disclosures about pension plans or other postretirement benefit plans outside the United States with those for U.S. plans unless the benefit obligations of the plans outside the United States are significant relative to the total benefit obligation and those plans use significantly different assumptions. A foreign reporting entity that prepares financial statements in conformity with U.S. generally accepted accounting principles (GAAP) shall apply the preceding guidance to its domestic and foreign plans. #### Disclosures by Nonpublic Entities ##### [715-20-50-5](https://asc.understandingaccounting.org/asc/715/20/#715-20-50-5) Pending content: no Source downloaded (UTC): 2026-09-10T00:59:19.746Z to 2026-09-10T00:59:19.746Z Record version: sha256:29f7694bb12a4ee36edb1122f387fde8b08751a351a221f82fc41b0746bfaff9 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A [nonpublic entity](https://asc.understandingaccounting.org/glossary/n/#nonpublic-entity "Any entity that does not meet any of the following conditions: Its debt or equity securities trade in a public market either on a stock exchange (domestic or foreign) or in an over-the-counter market, including securities quoted only locally or regionally. It is a conduit bond obligor for conduit debt securities that are traded in a public market (a domestic or foreign stock exchange or an over-the-counter market, including local or regional markets). It files with a regulatory agency in preparation for the sale of any class of debt or equity securities in a public market. It is required to file or furnish financial statements with the Securities and Exchange Commission. It is controlled by an entity covered by criteria (a) through (d).") is not required to disclose the information required by paragraph [715-20-50-1(a) through (c)](https://asc.understandingaccounting.org/asc/715/20/#715-20-50-1), [715-20-50-1(h)](https://asc.understandingaccounting.org/asc/715/20/#715-20-50-1), [715-20-50-1(o) through (q)](https://asc.understandingaccounting.org/asc/715/20/#715-20-50-1), and [715-20-50-1(r)(2)](https://asc.understandingaccounting.org/asc/715/20/#715-20-50-1). A nonpublic entity that sponsors one or more defined benefit pension plans or one or more other defined benefit postretirement plans shall provide all of the following information, separately for pension plans and other postretirement benefit plans. Amounts related to the employer's results of operations shall be disclosed for each period for which a statement of income is presented. Amounts related to the employer's statement of financial position shall be disclosed as of the date of each statement of financial position presented. 1. a The benefit obligation, fair value of plan assets, and funded status of the plan. 2. b Employer contributions, participant contributions, and benefits paid. 3. c The objectives of the disclosures about postretirement benefit plan assets are to provide users of financial statements with an understanding of: 1. 1 How investment allocation decisions are made, including the factors that are pertinent to an understanding of investment policies and strategies 2. 2 The classes of plan assets 3. 3 The inputs and valuation techniques used to measure the fair value of plan assets 4. 4 The effect of fair value measurements using significant unobservable inputs (Level 3) on changes in plan assets for the period 5. 5 Significant concentrations of risk within plan assets. An employer shall consider those overall objectives in providing the following information about plan assets: 1. i A narrative description of investment policies and strategies, including target allocation percentages or range of percentages considering the classes of plan assets disclosed pursuant to (ii) below, as of the latest statement of financial position presented (on a weighted-average basis for employers with more than one plan), and other factors that are pertinent to an understanding of those policies and strategies such as investment goals, risk management practices, permitted and prohibited investments including the use of derivatives, diversification, and the relationship between plan assets and benefit obligations. For investment funds disclosed as classes as described in (ii) below, a description of the significant investment strategies of those funds shall be provided. 2. ii The fair value of each class of plan assets as of each date for which a statement of financial position is presented. For additional guidance on determining appropriate classes of plan assets, see paragraph [820-10-50-2B](https://asc.understandingaccounting.org/asc/820/10/#820-10-50-2B). Examples of classes of assets could include, but are not limited to, the following: cash and cash equivalents; equity securities (segregated by industry type, company size, or investment objective); debt securities issued by national, state, and local governments; corporate debt securities; asset-backed securities; structured debt; derivatives on a gross basis (segregated by type of underlying risk in the contract, for example, interest rate contracts, foreign exchange contracts, equity contracts, commodity contracts, credit contracts, and other contracts); investment funds (segregated by type of fund); and real estate. Those examples are not meant to be all inclusive. An employer should consider the overall objectives in paragraph [715-20-50-5(c)(1) through (5)](https://asc.understandingaccounting.org/asc/715/20/#715-20-50-5) in determining whether additional classes of plan assets or further disaggregation of classes should be disclosed. If an employer determines the measurement date of plan assets in accordance with paragraph [715-30-35-63A](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-63A) or [715-60-35-123A](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-123A) and the employer contributes assets to the plan between the measurement date and its fiscal year-end, the employer shall not adjust the fair value of each class of plan assets for the effects of the contribution. Instead, the employer shall disclose the amount of the contribution to permit reconciliation of the total fair value of all the classes of plan assets to the ending balance of the fair value of plan assets. For example, the contribution could be disclosed as follows: - ![](https://asc.understandingaccounting.org/asc-img/GUID-6A351B2A-3F40-4FC6-A98E-2B9660FC9F02-low.gif) Fair Value Measurements at "February 3, 20X5 (in thousands)" Asset Class Total "Quoted Prices in Active Markets for Identical Assets (Level 1)" "Significant Observable Inputs (Level 2)" "Significant Unobservable Inputs (Level 3)" Cash " $14,770 " " $14,770 " $- $- Equity securities: U.S. companies " 41,200 " " 37,000 " " 1,200 " " 3,000 " International companies " 32,900 " " 24,000 " " 7,600 " " 1,300 " Mortgage-backed securities " 13,335 " - " 12,780 " 555 Assets at fair value at measurement date of 1/31/20X5 " 102,205 " " $75,770 " " $21,580 " " $4,855 " Contributions after measurement date " 25,000 " Total assets reported at 2/3/20X5 " $127,205 " 3. iii A narrative description of the basis used to determine the overall expected long-term rate-of-return-on-assets assumption, such as the general approach used, the extent to which the overall rate-of-return-on-assets assumption was based on historical returns, the extent to which adjustments were made to those historical returns in order to reflect expectations of future returns, and how those adjustments were determined. The description should consider the classes of assets described in (ii) above, as appropriate. 4. iv Information that enables users of financial statements to assess the inputs and valuation techniques used to develop fair value measurements of plan assets at the reporting date. For fair value measurements using significant unobservable inputs, an employer shall disclose the effect of the measurements on changes in plan assets for the period. To meet those objectives, the employer shall disclose the following information for each class of plan assets disclosed pursuant to (ii) above for each annual period: 1. 01 The level of the fair value hierarchy within which the fair value measurements are categorized in their entirety, segregating fair value measurements using quoted prices in active markets for identical assets or liabilities (Level 1), significant other observable inputs (Level 2), and significant unobservable inputs (Level 3). The guidance in paragraphs [820-10-35-37 through 35-37A](https://asc.understandingaccounting.org/asc/820/10/#820-10-35-37) is applicable. Investments for which fair value is measured using the net asset value per share (or its equivalent) practical expedient in paragraph [820-10-35-59](https://asc.understandingaccounting.org/asc/820/10/#820-10-35-59) shall not be categorized within the fair value hierarchy, as noted by paragraph [820-10-35-54B](https://asc.understandingaccounting.org/asc/820/10/#820-10-35-54B). If an employer determines the measurement date of plan assets in accordance with paragraph [715-30-35-63A](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-63A) or [715-60-35-123A](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-123A) and the employer contributes assets to the plan between the measurement date and its fiscal year-end, the employer shall not adjust the fair value of each class of plan assets for the effects of the contribution. Instead, the employer shall disclose the amount of the contribution to permit reconciliation of the total fair value of all plan assets in the fair value hierarchy to the ending balance of the fair value of plan assets. For example, the contribution could be disclosed as follows: - ![](https://asc.understandingaccounting.org/asc-img/GUID-6A351B2A-3F40-4FC6-A98E-2B9660FC9F02-low.gif) Fair Value Measurements at "February 3, 20X5 (in thousands)" Asset Class Total "Quoted Prices in Active Markets for Identical Assets (Level 1)" "Significant Observable Inputs (Level 2)" "Significant Unobservable Inputs (Level 3)" Cash " $14,770 " " $14,770 " $- $- Equity securities: U.S. companies " 41,200 " " 37,000 " " 1,200 " " 3,000 " International companies " 32,900 " " 24,000 " " 7,600 " " 1,300 " Mortgage-backed securities " 13,335 " - " 12,780 " 555 Assets at fair value at measurement date of 1/31/20X5 " 102,205 " " $75,770 " " $21,580 " " $4,855 " Contributions after measurement date " 25,000 " Total assets reported at 2/3/20X5 " $127,205 " 2. 02 For fair value measurements of plan assets using significant unobservable inputs (Level 3), the amounts of purchases and any transfers into or out of Level 3 (for example, transfers due to changes in the observability of significant inputs), disclosed separately. 1. A [Subparagraph superseded by Accounting Standards Update No. 2018-14](https://asc.understandingaccounting.org/updates/asu-2018-14/). 2. B [Subparagraph superseded by Accounting Standards Update No. 2018-14](https://asc.understandingaccounting.org/updates/asu-2018-14/). 3. C [Subparagraph superseded by Accounting Standards Update No. 2018-14](https://asc.understandingaccounting.org/updates/asu-2018-14/). 3. 03 Information about the valuation technique(s) and inputs used to measure fair value and a discussion of changes in valuation techniques and inputs, if any, during the period. 4. d For defined benefit pension plans, the accumulated benefit obligation. 5. e The benefits (as of the date of the latest statement of financial position presented) expected to be paid in each of the next five fiscal years, and in the aggregate for the five fiscal years thereafter. The expected benefits shall be estimated based on the same assumptions used to measure the entity's benefit obligation at the end of the year and shall include benefits attributable to estimated future employee service. 6. f The employer's best estimate, as soon as it can reasonably be determined, of contributions expected to be paid to the plan during the next fiscal year beginning after the date of the latest statement of financial position presented. Estimated contributions may be presented in the aggregate combining any of the following: 1. 1 Contributions required by funding regulations or laws 2. 2 Discretionary contributions 3. 3 Noncash contributions. 7. g The amounts recognized in the statements of financial position, showing separately the postretirement benefit assets and current and noncurrent postretirement benefit liabilities. 8. h Separately, the net gain or loss and net prior service cost or credit recognized in other comprehensive income for the period pursuant to paragraphs [715-30-35-11](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-11), [715-30-35-21](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-21), [715-60-35-16](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-16), and [715-60-35-25](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-25) and reclassification adjustments of other comprehensive income for the period, as those amounts, including amortization of the net transition asset or obligation, are recognized as components of net periodic benefit cost. 9. i The amounts in accumulated other comprehensive income that have not yet been recognized as components of net periodic benefit cost, showing separately the net gain or loss, net prior service cost or credit, and net transition asset or obligation. 10. j On a weighted-average basis, all of the following assumptions used in the accounting for the plans, specifying in a tabular format, the assumptions used to determine the benefit obligation and the assumptions used to determine net benefit cost: 1. 1 Discount rates (see paragraph [715-30-35-45](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-45) for a discussion of representationally faithful disclosure) 2. 2 Rates of compensation increase (for pay-related plans) 3. 3 Expected long-term rates of return on plan assets. 4. 4 Interest crediting rates (for cash balance plans and other plans with promised interest crediting rates). 11. k The assumed health care cost trend rate(s) for the next year used to measure the expected cost of benefits covered by the plan (gross eligible charges), and a general description of the direction and pattern of change in the assumed trend rates thereafter, together with the ultimate trend rate(s) and when that rate is expected to be achieved. 12. l If applicable, the amounts and types of securities of the employer and related parties included in plan assets. 13. m The nature and effect of significant nonroutine events, such as amendments, combinations, divestitures, curtailments, and settlements. 14. n [Subparagraph superseded by Accounting Standards Update No. 2018-14](https://asc.understandingaccounting.org/updates/asu-2018-14/). 15. o [Subparagraph superseded by Accounting Standards Update No. 2018-14](https://asc.understandingaccounting.org/updates/asu-2018-14/). 16. p If applicable, the accounting policy election to measure plan assets and benefit obligations using the month-end that is closest to the employer's fiscal year-end in accordance with paragraph [715-30-35-63A](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-63A) or [715-60-35-123A](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-123A) and the month-end measurement date. 17. q The amount of net periodic benefit cost recognized. In addition, if the components other than the service cost component are not presented in a separate line item or items in the income statement, the amount of the other components and the line item(s) used in the income statement to present them shall be disclosed. 18. r An explanation of the reasons for significant gains and losses related to changes in the benefit obligation for the period. #### Interim Disclosure Requirements for Publicly Traded Entities ##### [715-20-50-6](https://asc.understandingaccounting.org/asc/715/20/#715-20-50-6) Pending content: no Source downloaded (UTC): 2026-09-10T00:59:19.746Z to 2026-09-10T00:59:19.746Z Record version: sha256:2b3f5a67c59fd60377bc8a6a796d9642d176aec4a0db58c557212ebdd7082b67 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A [publicly traded entity](https://asc.understandingaccounting.org/glossary/p/#publicly-traded-entity-or-public-entity "Any entity that does not meet the definition of a nonpublic entity.") shall disclose the following information for its interim financial statements that include a statement of income: 1. a The amount of net benefit cost recognized, for each period for which a statement of income is presented, showing separately each of the following: 1. 1 The service cost component 2. 2 The interest cost component 3. 3 The expected return on plan assets for the period 4. 4 The gain or loss component 5. 5 The prior service cost or credit component 6. 6 The transition asset or obligation component 7. 7 The gain or loss recognized due to a settlement or curtailment. The line item(s) used in the income statement to present the components other than the service cost component shall be disclosed if the other components are not presented in a separate line item or items in the income statement. 2. b The total amount of the employer's contributions paid, and expected to be paid, during the current fiscal year, if significantly different from amounts previously disclosed pursuant to paragraph [715-20-50-1(g)](https://asc.understandingaccounting.org/asc/715/20/#715-20-50-1). Estimated contributions may be presented in the aggregate combining all of the following: 1. 1 Contributions required by funding regulations or laws 2. 2 Discretionary contributions 3. 3 Noncash contributions. #### Interim Disclosure Requirements for Nonpublic Entities ##### [715-20-50-7](https://asc.understandingaccounting.org/asc/715/20/#715-20-50-7) Pending content: no Source downloaded (UTC): 2026-09-10T00:59:19.746Z to 2026-09-10T00:59:19.746Z Record version: sha256:0ed1c449a5bde334a2c2bf6e3bde37471fa85c674c04d7504519e14a5440acd3 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A nonpublic entity shall disclose in interim periods for which a complete set of financial statements is presented the total amount of the employer's contributions paid, and expected to be paid, during the current fiscal year, if significantly different from amounts previously disclosed pursuant to paragraph [715-20-50-5(f)](https://asc.understandingaccounting.org/asc/715/20/#715-20-50-5). Estimated contributions may be presented in the aggregate combining all of the following: 1. a Contributions required by funding regulations or laws 2. b Discretionary contributions 3. c Noncash contributions. #### Disclosures Related to Expected Rate of Return on Plan Assets ##### [715-20-50-8](https://asc.understandingaccounting.org/asc/715/20/#715-20-50-8) Pending content: no Source downloaded (UTC): 2026-09-10T00:59:19.746Z to 2026-09-10T00:59:19.746Z Record version: sha256:c63b7a9ad3b61b96da8e2b5f67c37d946fae2f3a6a6a7271ed341f90bb22b9ce Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The weighted-average expected long-term rate of return on plan assets is used to determine net benefit cost, and, therefore, in the absence of a subsequent interim measurement of both pension or other postretirement plan assets and obligations (see paragraph [715-30-35-68](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-68)), the disclosed rate is the rate determined as of the beginning of the year. However, if that rate changes because of a subsequent interim measurement of both pension or other postretirement plan assets and obligations, disclosure of the beginning and more recently assumed rate, or a properly weighted combination of the two, shall be made. #### Disclosures Related to Japanese Governmental Settlement Transactions ##### [715-20-50-9](https://asc.understandingaccounting.org/asc/715/20/#715-20-50-9) Pending content: no Source downloaded (UTC): 2026-09-10T00:59:19.746Z to 2026-09-10T00:59:19.746Z Record version: sha256:ae5b1de80211f847f94275060b3e4c73ae1c4c44ce35541ad302b21e9e127b9b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2018-14](https://asc.understandingaccounting.org/updates/asu-2018-14/) ##### [715-20-50-10](https://asc.understandingaccounting.org/asc/715/20/#715-20-50-10) Pending content: no Source downloaded (UTC): 2026-09-10T00:59:19.746Z to 2026-09-10T00:59:19.746Z Record version: sha256:cfadc407ffcc8608287324d208678cde8c9127b2fcd28503641c3db4be88f855 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2018-14](https://asc.understandingaccounting.org/updates/asu-2018-14/) Source downloaded (UTC): 2026-09-10T00:59:23.319Z to 2026-09-10T00:59:23.319Z Record version: sha256:02dfd3bddc30bd1974c2bb57a331efb615f818945766efccd6d82b64ec4fb92c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 715-20-55: 55 Implementation Guidance and Illustrations [Read section](https://asc.understandingaccounting.org/asc/715/20/#55-implementation-guidance-and-illustrations) SEC content: no #### Implementation Guidance ##### [715-20-55-1](https://asc.understandingaccounting.org/asc/715/20/#715-20-55-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:59:23.319Z to 2026-09-10T00:59:23.319Z Record version: sha256:dc7f99bb925821cf02b9165fa277adea274c677cae9d66a046a24902ed294fec Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An employer's disclosure of the weighted average of the assumed discount rates for its other postretirement benefit obligation may not necessarily be the same as that disclosed for its pension benefit obligation. Even if the assumed discount rates are the same, the weighted average of those rates that is disclosed for the other postretirement benefit obligation may not be the same as that disclosed for the pension benefit obligation because the weighted average is influenced by the timing and pattern of benefits to be provided, which can differ between a pension and a postretirement benefit plan. ##### [715-20-55-2](https://asc.understandingaccounting.org/asc/715/20/#715-20-55-2) Pending content: no Source downloaded (UTC): 2026-09-10T00:59:23.319Z to 2026-09-10T00:59:23.319Z Record version: sha256:19f57991b66383c46f9fa249b353490b68480234ef9ba5f7650f224a6c9e26f6 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For example, pension benefits are usually paid in fixed amounts throughout retirement. On the other hand, postretirement health care benefits tend to increase during retirement because retirees generally require more health care services as they age, although the net cost to employers after retirees reach age 65 is reduced by Medicare. If, as a result of the expected cost of health care, the timing or pattern of postretirement benefits differs from that for pension benefits, that difference should be reflected in the weighting of the assumed discount rates. ##### [715-20-55-3](https://asc.understandingaccounting.org/asc/715/20/#715-20-55-3) Pending content: no Source downloaded (UTC): 2026-09-10T00:59:23.319Z to 2026-09-10T00:59:23.319Z Record version: sha256:623b97a93d363b74afb07618b71a9b45e939744038daacb60cac7a4a8aa8ee3e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following provides implementation guidance for a business entity that sponsors a defined benefit postretirement plan. Paragraphs [715-20-55-4 through 55-13](https://asc.understandingaccounting.org/asc/715/20/#715-20-55-4) address both transition to and initial application of the accounting for a defined benefit pension plan. ##### [715-20-55-4](https://asc.understandingaccounting.org/asc/715/20/#715-20-55-4) Pending content: no Source downloaded (UTC): 2026-09-10T00:59:23.319Z to 2026-09-10T00:59:23.319Z Record version: sha256:5a06998cfc36fad7c4ce8f4e76879452aeed4b26e90688900cbd8cd224c9ba43 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Certain assumptions, including benefit payments, employer contributions, and obligations settled, have not been included in this Section because those transactions are not affected by the provisions of this Subtopic. Therefore, the implementation guidance does not include all the assumptions necessary to reconcile between various stated assumptions or the beginning and ending balances of plan assets or benefit obligations. ##### [715-20-55-5](https://asc.understandingaccounting.org/asc/715/20/#715-20-55-5) Pending content: no Source downloaded (UTC): 2026-09-10T00:59:23.319Z to 2026-09-10T00:59:23.319Z Record version: sha256:399bf22eeb6167a46ac49001fd4dc51feed20498b67751a58ce5ca815d8df3f5 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Entity A adopts the recognition requirements of Section 715-30-25 and the disclosure requirements of Section 715-20-50 as of the end of its fiscal year (December 31, 2006). For simplicity, this guidance assumes that Entity A's annual report includes a statement of financial position and a statement of changes in stockholders' equity. An income statement is not presented in this Section because it is not affected by the recognition provisions of Section 715-30-25. Additionally, this guidance does not consider the effects on financial reporting for interim periods. In applying the recognition provisions of Section 715-30-25 for transition, Entity A adjusts the amounts recognized in the statement of financial position as of December 31, 2006, before application of that Section, so that gains or losses, prior service costs or credits, and the transition asset or obligation that have not yet been included in net periodic benefit cost as of December 31, 2006, are recognized as a component of the ending balance of accumulated other comprehensive income, net of tax (see paragraph [715-20-55-7](https://asc.understandingaccounting.org/asc/715/20/#715-20-55-7)). The adjustment is reported as an adjustment of the ending balance of accumulated other comprehensive income (see paragraph [715-20-55-10](https://asc.understandingaccounting.org/asc/715/20/#715-20-55-10)). ##### [715-20-55-6](https://asc.understandingaccounting.org/asc/715/20/#715-20-55-6) Pending content: no Source downloaded (UTC): 2026-09-10T00:59:23.319Z to 2026-09-10T00:59:23.319Z Record version: sha256:03d8f7a843a0542d379ba847d0ea669668bf6c538b7873626ae03a33ca400ca5 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The funded status of Entity A's defined benefit pension plan and the amounts not yet recognized as components of net periodic pension cost as of December 31, 2006, and December 31, 2007, are shown below. Entity A measures plan assets and benefit obligations as of the date of its financial statements. Prior to adopting the recognition provisions of Section 715-30-25, Entity A had a recognized liability of $45,000 at December 31, 2006, for the amount that past net periodic pension costs exceeded past contributions to the plan. - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-7330E30B-FDD0-4234-8BFF-98DFA3BA5B54-low.gif) 12/31/06 12/31/07 (in thousands) Projected benefit obligation " $(2,525)" " $(2,700)" Plan assets at fair value " 1,625 " " 1,700 " Funded status $(900) " $(1,000)" Items not yet recognized as a component of net periodic pension cost: Transition obligation $240 $200 Prior service cost 375 350 Net loss 240 260 $855 $810 ##### [715-20-55-7](https://asc.understandingaccounting.org/asc/715/20/#715-20-55-7) Pending content: no Source downloaded (UTC): 2026-09-10T00:59:23.319Z to 2026-09-10T00:59:23.319Z Record version: sha256:3016d80d5b4c5b3dfb6f07efe72e984c970718196fb93594afdfdfe08f167946 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. At December 31, 2006, Entity A recognizes a liability for the underfunded status of its defined benefit pension plan and adjusts ending accumulated other comprehensive income, net of tax, for the transition obligation, prior service cost, and net loss that have not been recognized as a component of net periodic pension cost. The journal entry is as follows. - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-5644A15F-BE65-41A9-AA8F-FBE4630C2C5C-low.gif) Accumulated other comprehensive income 855 Deferred tax asset 342 Deferred tax benefit—accumulated other comprehensive income 342 Liability for pension benefits 855 ##### [715-20-55-8](https://asc.understandingaccounting.org/asc/715/20/#715-20-55-8) Pending content: no Source downloaded (UTC): 2026-09-10T00:59:23.319Z to 2026-09-10T00:59:23.319Z Record version: sha256:87a87b4023671ddc3b2d94c7012d4b48554531e80c57f38a12849abebb439cb5 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following table illustrates the adjustments made to Entity A's statement of financial position for December 31, 2006. This illustration assumes that plan assets exceed the actuarial present value of benefits to be paid over the next fiscal year. Therefore, the entire liability for pension benefits is classified as a long-term liability. - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-27344D23-795A-44C1-B67B-29D0548A9493-low.gif) Entity A Statement of Financial Position "December 31, 2006" (in thousands) Before Application of the Recognition Provisions Included in Section 715-30-25 Adjustments After Application of the Recognition Provisions Included in Section 715-30-25 Current assets: Cash " $40,000 " $- " $40,000 " Inventory " 720,500 " - " 720,500 " Total current assets " 760,500 " - " 760,500 " Intangible assets " 100,000 " - " 100,000 " Total assets " $860,500 " $- " $860,500 " Current liabilities " $60,000 " $- " $60,000 " Liability for pension benefits 45 855 900 Other long-term liabilities " 99,955 " - " 99,955 " Deferred income taxes " 20,000 " (342) " 19,658 " Total liabilities " 180,000 " 513 " 180,513 " Common stock " 150,000 " - " 150,000 " Paid-in capital " 300,000 " - " 300,000 " Retained earnings " 205,500 " - " 205,500 " Accumulated other comprehensive income " 25,000 " (513) " 24,487 " Total stockholders' equity " 680,500 " (513) " 679,987 " Total liabilities and stockholders' equity " $860,500 " $- " $860,500 " ##### [715-20-55-9](https://asc.understandingaccounting.org/asc/715/20/#715-20-55-9) Pending content: no Source downloaded (UTC): 2026-09-10T00:59:23.319Z to 2026-09-10T00:59:23.319Z Record version: sha256:9db034abc93f8f309d2750ce9ea664c17183fa1dbadac34b063c991488bd7660 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following table illustrates the disclosures required in the year that the recognition provisions are initially adopted. - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-AF68BF9D-40E5-4734-8CDC-D328F904EDB2-low.gif) Incremental Effect of Applying the Recognition Provisions Included in Section 715-30-25 on Individual Line Items in the Statement of Financial Position "December 31, 2006" (in thousands) Before Application of the Recognition Provisions Included in Section 715-30-25 Adjustments After Application of the Recognition Provisions Included in Section 715-30-25 Liability for pension benefits $45 $855 $900 Deferred income taxes " 20,000 " (342) " 19,658 " Total liabilities " 180,000 " 513 " 180,513 " Accumulated other comprehensive income " 25,000 " (513) " 24,487 " Total stockholders' equity " 680,500 " (513) " 679,987 " ##### [715-20-55-10](https://asc.understandingaccounting.org/asc/715/20/#715-20-55-10) Pending content: no Source downloaded (UTC): 2026-09-10T00:59:23.319Z to 2026-09-10T00:59:23.319Z Record version: sha256:daf90a08de1bbf16860926475604e2dbc6afb2f44776872a0637ed4d709c6eb5 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Entity A's statement of changes in stockholders' equity for the year ended December 31, 2006, which includes the effects of applying the provisions of Section 715-30-25, follows. Brackets are used to highlight those effects. - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-D2DD25A0-B517-4A16-8BF4-8D64CC5612F4-low.gif) Entity A Statement of Changes in Stockholders' Equity "Year Ended December 31, 2006" (in thousands) Total Comprehensive Income Retained Earnings Accumulated Other Comprehensive Income Common Stock Paid-in Capital "Balance at December 31, 2005" " $612,979 " " $137,988 " " $24,991 " " $150,000 " " $300,000 " Comprehensive income Net income for 2006 " 67,512 " " $67,512 " " 67,512 " "Other comprehensive income, net of tax" Foreign currency translation gain 15 15 Unrealized holding loss arising during period (6) (6) Other comprehensive income 9 9 Comprehensive income " $67,521 " "Adjustment to initially apply the recognition provisions included in Section 715-30-25, net of tax" \[(513)\] \[(513)\] "Balance at December 31, 2006" " $679,987 " " $205,500 " " $24,487 " " $150,000 " " $300,000 " ##### [715-20-55-11](https://asc.understandingaccounting.org/asc/715/20/#715-20-55-11) Pending content: no Source downloaded (UTC): 2026-09-10T00:59:23.319Z to 2026-09-10T00:59:23.319Z Record version: sha256:8ccac2d798a6485541e3581da40299c6fc79b7b38519aefa0551a29ef9a8df0b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In applying Section 715-30-25 in 2007, Entity A does all of the following: 1. a Adjusts other comprehensive income, net of tax, to recognize the amortization of the transition obligation in net periodic pension cost 2. b Adjusts other comprehensive income, net of tax, to recognize the amortization of prior service cost in net periodic pension cost 3. c Recognizes a pension liability for the additional net loss arising during the year, and a corresponding decrease in other comprehensive income, net of tax 4. d Recognizes a pension liability and net periodic pension cost, net of tax, for the service cost, interest cost, and expected return on plan assets. ##### [715-20-55-12](https://asc.understandingaccounting.org/asc/715/20/#715-20-55-12) Pending content: no Source downloaded (UTC): 2026-09-10T00:59:23.319Z to 2026-09-10T00:59:23.319Z Record version: sha256:e6d7cadb98d4fe0cb71d9fd11b1a70f8a211ef9a0d0c6dd97327ba41fef37a84 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The components of projected net periodic pension cost for the year ended December 31, 2007, areas follows. - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-A8EFD5DF-6452-4CC2-B575-CDC5DD421C56-low.gif) Service cost $120 Interest cost 95 Expected return on plan assets (80) Amortization of prior service cost 25 Amortization of the transition obligation 40 Amortization of net (gain) loss - Net periodic benefit cost $200 ##### [715-20-55-13](https://asc.understandingaccounting.org/asc/715/20/#715-20-55-13) Pending content: no Source downloaded (UTC): 2026-09-10T00:59:23.319Z to 2026-09-10T00:59:23.319Z Record version: sha256:859f5c130cdda7ac13a33f38bdfb5beabe67c71af4bc9dcdb0ee8ea00c612395 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For the year ending December 31, 2007, Entity A makes the following journal entries in applying the recognition provisions of Section 715-30-25: 1. a Recognize net periodic pension cost and a corresponding increase in other comprehensive income, net of tax, for amortization of the transition obligation (see the preceding paragraph). - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-914CE2CC-09FC-49DB-8609-B549F6F248B6-low.gif) Net periodic pension cost—transition obligation 40 Deferred tax benefit—other comprehensive income 16 Deferred tax benefit—net income 16 Other comprehensive income 40 2. b Recognize net periodic pension cost and a corresponding increase in other comprehensive income, net of tax, for amortization of prior service cost (see the preceding paragraph). - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-D6B6027C-8A8A-46DF-8936-A145F1A19B0F-low.gif) Net periodic pension cost—prior service cost 25 Deferred tax benefit—other comprehensive income 10 Deferred tax benefit—net income 10 Other comprehensive income 25 3. c Recognize a pension liability and net periodic pension cost, net of tax, for the service cost of $120, interest cost of $95, and the expected return on plan assets of $(80) (see the preceding paragraph). The service cost should be recognized separately, and the interest cost and expected return on plan assets may be recognized together or separately. - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-8AB9B246-675C-4BA5-B7E1-7402E1B6A8A8-low.gif) Net periodic pension cost—service cost 120 Net periodic pension cost—interest cost 95 Deferred tax asset 54 "Net periodic pension cost—expected return on plan assets" 80 Deferred tax benefit—net income 54 Liability for pension benefits 135 4. d Recognize a pension liability for the additional net loss arising during the year and a corresponding decrease in other comprehensive income, net of tax (this is the increase in net loss from $240 to $260 shown in paragraph [715-20-55-6](https://asc.understandingaccounting.org/asc/715/20/#715-20-55-6)). - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-8A26B8EC-DD63-43EC-8CFB-1FA3521F5977-low.gif) Other comprehensive income 20 Deferred tax asset 8 Deferred tax benefit—other comprehensive income 8 Liability for pension benefits 20 #### Illustrations ##### [715-20-55-14](https://asc.understandingaccounting.org/asc/715/20/#715-20-55-14) Pending content: no Source downloaded (UTC): 2026-09-10T00:59:23.319Z to 2026-09-10T00:59:23.319Z Record version: sha256:a21d8773752812569f5eda6d5d1b12795ebf409f3cb5ede94118e77cfb8965b7 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Section illustrates the following defined benefit pension and other postretirement benefit disclosures: 1. a Disclosures about pension and other postretirement benefit plans in the annual financial statements of a [publicly traded entity](https://asc.understandingaccounting.org/glossary/p/#publicly-traded-entity-or-public-entity "Any entity that does not meet the definition of a nonpublic entity."). See Example 1 (paragraph [715-20-55-16](https://asc.understandingaccounting.org/asc/715/20/#715-20-55-16)). 2. b Interim-period disclosures of a publicly traded entity. See Example 2 (paragraph [715-20-55-18](https://asc.understandingaccounting.org/asc/715/20/#715-20-55-18)). 3. c Interim-period disclosures of a [nonpublic entity](https://asc.understandingaccounting.org/glossary/n/#nonpublic-entity "Any entity other than one with any of the following characteristics: Whose debt or equity securities trade in a public market either on a stock exchange (domestic or foreign) or in the over-the-counter market, including securities quoted only locally or regionally That is a conduit bond obligor for conduit debt securities that are traded in a public market (a domestic or foreign stock exchange or an over-the-counter market, including local or regional markets) That makes a filing with a regulatory agency in preparation for the sale of any class of debt or equity securities in a public market That is controlled by an entity covered by a., b., or c. Conduit debt securities refers to certain limited-obligation revenue bonds, certificates of participation, or similar debt instruments issued by a state or local governmental entity for the express purpose of providing financing for a specific third party (the conduit bond obligor) that is not a part of the state or local government's financial reporting entity. Although conduit debt securities bear the name of the governmental entity that issues them, the governmental entity often has no obligation for such debt beyond the resources provided by a lease or loan agreement with the third party on whose behalf the securities are issued. Further, the conduit bond obligor is responsible for any future financial reporting requirements.") in a complete set of financial statements. See Example 3 (paragraph [715-20-55-19](https://asc.understandingaccounting.org/asc/715/20/#715-20-55-19)). ##### [715-20-55-15](https://asc.understandingaccounting.org/asc/715/20/#715-20-55-15) Pending content: no Source downloaded (UTC): 2026-09-10T00:59:23.319Z to 2026-09-10T00:59:23.319Z Record version: sha256:e84957ff1bf1c4770254465391da033c64cf66aaffcf4693991fd17879b42f64 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The financial statements of a nonpublic entity would be similarly presented but would not be required to include the information contained in paragraph [715-20-50-1(a) through (c)](https://asc.understandingaccounting.org/asc/715/20/#715-20-50-1), [715-20-50-1(h)](https://asc.understandingaccounting.org/asc/715/20/#715-20-50-1), [715-20-50-1(o) through (q)](https://asc.understandingaccounting.org/asc/715/20/#715-20-50-1), and [715-20-50-1(r)(2)](https://asc.understandingaccounting.org/asc/715/20/#715-20-50-1). The items presented in these Examples have been included for illustrative purposes. Certain assumptions have been made to simplify the computations and focus on the disclosure requirements. ##### [715-20-55-16](https://asc.understandingaccounting.org/asc/715/20/#715-20-55-16) Pending content: no Source downloaded (UTC): 2026-09-10T00:59:23.319Z to 2026-09-10T00:59:23.319Z Record version: sha256:ceae5efbbc9314689a523012ee1195e3ed06420495315d48d8f8c83b6a5a9877 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following illustrates the fiscal 20X3 financial statement disclosures for an employer (Entity A) with multiple defined benefit pension plans and other postretirement benefit plans (dollar amounts in millions). This Example assumes that Entity A does not have cash balance plans or other plans with promised interest crediting rates. Narrative descriptions of the basis used to determine the overall expected long-term rate-of-return-on-assets assumption (see paragraph [715-20-50-1(d)(iii)](https://asc.understandingaccounting.org/asc/715/20/#715-20-50-1)) and disclosure of the valuation technique(s) and inputs used to measure the fair value of plan assets and a discussion of changes in valuation techniques and inputs (see paragraph [715-20-50-1(d)(iv)(03)](https://asc.understandingaccounting.org/asc/715/20/#715-20-50-1)), if any, are not included in this Example. The narrative description of the basis used to determine the overall expected long-term rate-of-return-on-assets assumption is meant to be entity-specific. An explanation of the reasons for significant gains and losses related to changes in the benefit obligation for the period (see paragraph [715-20-50-1(r)(1)](https://asc.understandingaccounting.org/asc/715/20/#715-20-50-1)), if any, is not provided in this Example because the reasons may vary in different reporting periods or in different entities. For purposes of this Example, the disclosures required by paragraphs [715-20-50-1(d)(ii)](https://asc.understandingaccounting.org/asc/715/20/#715-20-50-1) and [715-20-50-1(d)(iv)](https://asc.understandingaccounting.org/asc/715/20/#715-20-50-1) are provided for only the fiscal year ending December 31, 20X3. However, those paragraphs indicate that the disclosures are required to be presented as of each date for which a statement of financial position is presented. ##### [715-20-55-17](https://asc.understandingaccounting.org/asc/715/20/#715-20-55-17) Pending content: no Source downloaded (UTC): 2026-09-10T00:59:23.319Z to 2026-09-10T00:59:23.319Z Record version: sha256:aef5f371d8f4f77ae53706e24a9eccb80348183e34e931baa62611a48d031a10 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. During 20X3, Entity A acquired FV Industries and amended its plans. Entity A would make the following disclosure. - **Notes to Financial Statements** - **Pension and Other Postretirement Benefit Plans** - Entity A has both funded and unfunded noncontributory defined benefit pension plans that together cover substantially all of its employees. The plans provide defined benefits based on years of service and final average salary. - Entity A also has both funded and unfunded other postretirement benefit plans covering substantially all of its employees. The health care plans are contributory with participants' contributions adjusted annually; the life insurance plans are noncontributory. The accounting for the health care plans anticipates future cost-sharing changes to the written plans that are consistent with the entity's expressed intent to increase retiree contributions each year by 50 percent of health care cost increases in excess of 6 percent. The postretirement health care plans include a limit on the entity's share of costs for recent and future retirees. - Entity A acquired FV Industries on December 27, 20X3, including its pension plans and other postretirement benefit plans. Amendments made at the end of 20X3 to Entity A's plans increased the pension benefit obligations by $70 and reduced the other postretirement benefit obligations by $75. - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-2F08108E-8B77-44B2-AD03-32B56050446F-low.gif) Obligations and Funded Status At December 31 Pension Benefits Other Benefits 20X3 20X2 20X3 20X2 Change in benefit obligation Benefit obligation at beginning of year $1,246 $1,200 $742 $712 Service cost 76 72 36 32 Interest cost 90 88 55 55 Plan participants' contributions 20 13 Amendments 70 (75) Actuarial loss 20 25 Acquisition 900 600 Benefits paid (125) (114) (90) (70) Benefit obligation at end of year 2,277 1,246 1,313 742 Change in plan assets Fair value of plan assets at beginning of year 1,068 894 206 87 Actual return on plan assets 29 188 5 24 Acquisition 1,000 25 Employer contributions 75 100 137 152 Plan participants' contributions 20 13 Benefits paid (125) (114) (90) (70) Fair value of plan assets at end of year 2,047 1,068 303 206 Funded status at end of year $(230) $(178) $(1,010) $(536) - \[Note: Nonpublic entities are not required to provide information in the preceding tables; they are required to disclose the employer's contributions, participants' contributions, benefit payments, and the funded status.\] - Amounts recognized in the statement of financial position consist of the following. - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-143D7287-6A50-421B-BE10-9024111C87F0-low.gif) Pension Benefits Other Benefits 20X3 20X2 20X3 20X2 Noncurrent assets $227 $127 $- $- Current liabilities (125) (125) (150) (150) Noncurrent liabilities (332) (180) (860) (386) $(230) $(178) $(1,010) $(536) - \[Note: The sum of current liabilities and noncurrent liabilities consists of the amount of underfunded (including unfunded) pension benefits or other benefits.\] - Amounts recognized in accumulated other comprehensive income consist of the following. - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-983ECE88-9396-4614-92AE-5700C4F43871-low.gif) Pension Benefits Other Benefits 20X3 20X2 20X3 20X2 Net loss (gain) $94 $18 $(11) $(48) Prior service cost (credit) 210 160 (92) (22) $304 $178 $(103) $(70) - The accumulated benefit obligation for all defined benefit pension plans was $1,300 and $850 at December 31, 20X3, and 20X2, respectively. - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-FAD90773-8EB1-484F-B145-6F975FB2136D-low.gif) Information for pension plans with an accumulated benefit obligation in excess of plan assets December 31 20X3 20X2 Accumulated benefit obligation $ 237 $ 222 Fair value of plan assets 84 95 - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-1CC7BD2D-839E-410C-BBDE-AF7DD21821F5-low.gif) Information for pension plans with a projected benefit obligation in excess of plan assets December 31 20X3 20X2 Projected benefit obligation " $1,277 " $696 Fair value of plan assets 820 391 - \[Note: The net amount of projected benefit obligation and plan assets for all underfunded (including unfunded) pension plans was $457 and $305 at December 31, 20X3, and 20X2, respectively, and was classified as liabilities on the statement of financial position.\] - \[Note: Information for other postretirement benefit plans with an accumulated postretirement benefit obligation in excess of plan assets has been disclosed in the note on “Obligations and Funded Status” because all the other postretirement benefit plans are unfunded or underfunded.\] - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-A7642AE1-AFAD-45B3-84F3-D0E48ED8CF35-low.gif) Components of Net Periodic Benefit Cost and Other Amounts Recognized in Accumulated Other Comprehensive Income Pension Benefits Other Benefits Net Periodic Benefit Cost 20X3 20X2 20X3 20X2 Service cost $76 $72 $36 $32 Interest cost 90 88 55 55 Expected return on plan assets (85) (76) (17) (8) Amortization of prior service cost (credit) 20 16 (5) (5) Amortization of net (gain) loss - - - - Net periodic benefit cost $101 $100 $69 $74 - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-1F741A50-73E3-4FA9-9051-0A8912E0C686-low.gif) "Other Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive Income" Pension Benefits Other Benefits 20X3 20X2 20X3 20X2 Net loss (gain) $76 $112 $37 $(48) Prior service cost (credit) 70 - (75) (27) Amortization of prior service (cost) credit (20) (16) 5 5 Total recognized in other comprehensive income 126 96 (33) (70) Total recognized in net periodic benefit cost and other comprehensive income $227 $196 $36 $4 - The components of net periodic benefit cost other than the service cost component are included in the line item "other income/(expense)" in the income statement. - \[Note: Nonpublic entities are not required to separately disclose components of net periodic benefit cost.\] - \[Entity-specific narrative description of the reasons for significant gains and losses related to changes in the defined benefit obligation for the period would be disclosed.\] - **Assumptions** - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-608DAF96-7314-4E2B-A6B4-CF8BD6C7A8FC-low.gif) Weighted-average assumptions used to determine benefit obligations at December 31 Pension Benefits Other Benefits 20X3 20X2 20X3 20X2 Discount rate 6.75% 7.25% 7.00% 7.50% Rate of compensation increase 4.25 4.50 - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-4A4031E9-56BE-4E99-B884-D807F08179FB-low.gif) Weighted-average assumptions used to determine net periodic benefit cost for years ended December 31 Pension Benefits Other Benefits 20X3 20X2 20X3 20X2 Discount rate 7.25% 7.50% 7.50% 7.75% Expected long-term return on plan assets 8.00 8.50 8.10 8.75 Rate of compensation increase 4.50 4.75 - \[Entity-specific narrative description of the basis used to determine the overall expected long-term rate of return on assets, as described in paragraph [715-20-50-1(d)(iii)](https://asc.understandingaccounting.org/asc/715/20/#715-20-50-1), would be disclosed.\] - \[An entity with cash balance plans or other plans with promised interest crediting rates would disclose the weighted-average interest crediting rates used to determine the benefit obligation and net periodic benefit cost.\] - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-ED8C9BAE-9AF4-41CD-A3C4-3F9E2555211C-low.gif) Assumed health care cost trend rates at December 31 20X3 20X2 Health care cost trend rate assumed for next year 12% 12.5% Rate to which the cost trend rate is assumed to decline (the ultimate trend rate) 6% 5% Year that the rate reaches the ultimate trend rate 20X9 20X9 - **Plan Assets** - The company's overall investment strategy is to achieve a mix of approximately 75 percent of investments for long-term growth and 25 percent for near-term benefit payments with a wide diversification of asset types, fund strategies, and fund managers. The target allocations for plan assets are 65 percent equity securities, 20 percent corporate bonds and U.S. Treasury securities, and 15 percent to all other types of investments. Equity securities primarily include investments in large-cap and mid-cap companies primarily located in the United States. Fixed income securities include corporate bonds of companies from diversified industries, mortgage-backed securities, and U.S. Treasuries. Other types of investments include investments in hedge funds and private equity funds that follow several different strategies. - The fair value of Entity A's pension plan assets at December 31, 20X3, by asset class are as follows. - \[Note: The two methods for disclosing the fair value of classes of plan assets presented below are not intended to be treated as a template. While they both provide examples of disclosures that comply with the requirements of paragraph [715-20-50-1(d)(ii)](https://asc.understandingaccounting.org/asc/715/20/#715-20-50-1), the classes disclosed should be tailored to the nature and risks of assets in an employer's plan(s). Additionally, an employer should consider the overall objectives in paragraphs [715-20-50-1(d)(1), (2), and (5)](https://asc.understandingaccounting.org/asc/715/20/#715-20-50-1).\] - **Method 1:** - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-DE45BD2C-4455-47A9-A4B8-1B5480D5C366-low.gif) Fair Value Measurements at "December 31, 20X3 (in millions)" Quoted Prices in Active Markets for Significant Significant Identical Observable Unobservable Assets Inputs Inputs Asset Class Total (Level 1) (Level 2) (Level 3) Cash $150 $150 Equity securities: U.S. large-cap (a) 550 550 U.S. mid-cap growth 100 100 International large-cap value 325 325 Emerging markets growth 75 25 $50 Domestic real estate 100 20 80 Fixed income securities: U.S. Treasuries 200 200 Corporate bonds (b) 200 200 Mortgage-backed securities 50 50 Other types of investments: Equity long/short hedge funds (c) 55 $55 Event driven hedge funds (d) 45 45 Global opportunities hedge funds (e) 35 35 Multi-strategy hedge funds (f) 40 40 Private equity funds (g) 47 47 Real estate 75 75 Total " $2,047 " " $1,370 " $380 $297 (a) This class comprises low-cost equity index funds not actively managed that track the S&P 500. b) (b) This class represents investment grade bonds of U.S. issuers from diverse industries. (c) "This class includes hedge funds that invest both long and short in primarily U.S. common stocks. Management of the hedge funds has the ability to shift investments from value to growth strategies, from small to large capitalization stocks, and from a net long position to a net short position." (d) "This class includes investments in approximately 60% equities and 40% bonds to profit from economic, political, and government driven events. A majority of the investments are targeted at economic policy decisions." (e) "This class includes approximately 80% investments in non-U.S. common stocks in the health care, energy, information technology, utilities, and telecommunications sectors and approximately 20% investments in diversified currencies." (f) "This class invests in multiple strategies to diversify risks and reduce volatility. It includes investments in approximately 50% U.S. common stocks, 30% global real estate projects, and 20% arbitrage investments." (g) This class includes several private equity funds that invest primarily in U.S. commercial real estate. - \[Note: Presented below is another method by which management could disclose classes of plan assets.\] - **Method 2:** - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-7BEE0704-6FCC-46D6-A988-3BB9F253C11F-low.gif) Fair Value Measurements at "December 31, 20X3 (in millions)" Quoted Prices in Active Markets for Significant Significant Identical Observable Unobservable Assets Inputs Inputs Asset Class Total (Level 1) (Level 2) (Level 3) Cash $150 $150 Equity securities: U.S. companies 400 400 International companies 300 300 Mutual funds (a) 450 320 $130 U.S. Treasury securities 200 200 AA corporate bonds 100 100 A corporate bonds 100 100 Mortgage-backed securities 50 50 Equity long/short hedge funds (b) 55 $55 Event driven hedge funds (c) 45 45 Global opportunities hedge funds (d) 35 35 Multi-strategy hedge funds (e) 40 40 Private equity funds (f) 47 47 Real estate 75 75 Total " $2,047 " " $1,370 " $380 $297 (a) 70% of mutual funds invest in common stock of large-cap U.S. companies. 30% of the company's mutual fund investments focus on emerging markets and domestic real estate common stocks. (b) "This class includes hedge funds that invest both long and short in primarily U.S. common stocks. Management of the hedge funds has the ability to shift investments from value to growth strategies, from small to large capitalization stocks, and from a net long position to a net short position." c0 (c) "This class includes investments in approximately 60% equities and 40% bonds to profit from economic, political, and government driven events. A majority of the investments are targeted at economic policy decisions." (d) "This class includes approximately 80% investments in non-U.S. common stocks in the health care, energy, information technology, utilities, and telecommunications sectors and approximately 20% investments in diversified currencies." (e) "This class invests in multiple strategies to diversify risks and reduce volatility. It includes investments in approximately 50% U.S. common stocks, 30% global real estate projects, and 20% arbitrage investments." (f) This class includes several private equity funds that invest primarily in U.S. commercial real estate. - \[Note: An entity shall disclose the following information regardless of its method for disclosing classes of plan assets.\] - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-230FB3A4-614E-4F5D-85D0-A3824A6403F9-low.gif) Fair Value Measurements Using Significant Unobservable Inputs (Level 3) Equity Global Long/ Event Opportu- Multi- Short Driven nities Strategy Private Hedge Hedge Hedge Hedge Equity Real Funds Funds Funds Funds Funds Estate Total "Beginning balance at December 31, 20X2" $40 $35 $39 $35 $40 $10 $199 Actual return on plan assets: Relating to assets still held at the reporting date (2) 5 (7) 5 2 3 6 Relating to assets sold during the period 3 2 5 "Purchases, sales, and settlements" 15 2 3 62 82 "Transfers in and/or out of Level 3" 2 3 5 "Ending balance at December 31, 20X3" $55 $45 $35 $40 $47 $75 $297 - \[Note: Nonpublic entities are not required to provide a reconciliation from the opening balances to the closing balances of plan assets measured on a recurring basis in Level 3 of the fair value hierarchy. However, nonpublic entities are required to disclose separately the amounts of purchases of Level 3 plan assets and transfers into and out of Level 3 of the fair value hierarchy.\] - \[Entity-specific narrative description of investment policies and strategies for plan assets, including weighted-average target asset allocations \[if used as part of those policies and strategies\] as described in paragraph [715-20-50-1(d)(ii)](https://asc.understandingaccounting.org/asc/715/20/#715-20-50-1) would be included here.\] - The fair values of Entity A's other postretirement benefit plan assets at December 31, 20X3, by asset class are as follows. - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-08348317-4094-4BB8-8569-96FD4369B873-low.gif) Fair Value Measurements at "December 31, 20X3 (in millions)" Quoted Prices in Active Markets for Significant Significant Identical Observable Unobservable Assets Inputs Inputs Asset Class Total (Level 1) (Level 2) (Level 3) Diversified equity securities $150 $150 - $- U.S. Treasury securities 50 50 - - Diversified corporate bonds 103 - $103 - Total $303 $200 $103 $- - Diversified equity securities include Entity A common stock in the amounts of $12 at December 31, 20X3. - **Cash Flows** - **Contributions** - Entity A expects to contribute $125 million to its pension plan and $150 million to its other postretirement benefit plan in 20X4. - **Estimated Future Benefit Payments** - The following benefit payments, which reflect expected future service, as appropriate, are expected to be paid. - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-2B51E808-9CE5-45A6-B89A-D47967541D04-low.gif) Pension Benefits Other Benefits 20X4 $200 $150 20X5 208 155 20X6 215 160 20X7 225 165 20X8 235 170 Years 20X9-20Y3 1,352 984 ##### [715-20-55-18](https://asc.understandingaccounting.org/asc/715/20/#715-20-55-18) Pending content: no Source downloaded (UTC): 2026-09-10T00:59:23.319Z to 2026-09-10T00:59:23.319Z Record version: sha256:50a635eaf19b360862e3d15a92c89947bff800f111fe65a3d9534cb41d86bb8b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Example illustrates the disclosures of a publicly traded entity for the first fiscal quarter beginning after December 15, 20X3. - Components of Net Periodic Benefit Cost - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-18E71D6A-61AD-498D-A89B-918CD70EBA48-low.gif) Three months ended March 31 Pension Benefits Other Benefits 20X4 20X3 20X4 20X3 Service cost $35 $19 $16 $9 Interest cost 38 23 23 14 Expected return on plan assets (41) (21) (6) (4) Amortization of prior service cost 7 5 (3) (1) Amortization of net (gain) loss 2 - - - Net periodic benefit cost $41 $26 $30 $18 - The components of net periodic benefit cost other than the service cost component are included in the line item “other income/(expense)” in the income statement. - Employer Contributions - Entity A previously disclosed in its financial statements for the year ended December 31, 20X3, that it expected to contribute $125 million to its pension plan in 20X4. As of March 31, 20X4, $20 million of contributions have been made. Entity A presently anticipates contributing an additional $120 million to fund its pension plan in 20X4 for a total of $140 million. ##### [715-20-55-19](https://asc.understandingaccounting.org/asc/715/20/#715-20-55-19) Pending content: no Source downloaded (UTC): 2026-09-10T00:59:23.319Z to 2026-09-10T00:59:23.319Z Record version: sha256:d109c6f98138e500301d54dea1c3785a82561f24c2c4275f422254660f44455a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Example illustrates the disclosures for a nonpublic entity (Entity A) for the first fiscal quarter beginning after December 15, 20X3. - Entity A previously disclosed in its financial statements for the year ended December 31, 20X3, that it expected to contribute $125 million to its pension plan in 20X4. As of March 31, 20X4, $20 million of contributions have been made. Entity A presently anticipates contributing an additional $120 million to fund its pension plan in 20X4 for a total of $140 million. Source downloaded (UTC): 2026-09-10T00:59:26.368Z to 2026-09-10T00:59:26.368Z Record version: sha256:e155f20cb6a6071d3e840b1e86e77a5a43ca92c910d463a6bcd436985a5d7e2a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 715-20-60: 60 Relationships [Read section](https://asc.understandingaccounting.org/asc/715/20/#60-relationships) SEC content: no #### Compensation—General ##### [715-20-60-1](https://asc.understandingaccounting.org/asc/715/20/#715-20-60-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:59:26.368Z to 2026-09-10T00:59:26.368Z Record version: sha256:bceb43ab87f1586c5c51e31a5e6f70ad78f5f08372f061597daf588b89fdf62a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For guidance on deferred compensation contracts that are accounted for individually on an accrual basis in accordance with the terms of the underlying contract, see Topic 710. Source downloaded (UTC): 2026-09-10T00:59:29.173Z to 2026-09-10T00:59:29.173Z Record version: sha256:68d2ceca4e47d2cf827003227798bd5f839db4c361b7ff28baf5be8fac7ef668 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 715-20-65: 65 Transition and Open Effective Date Information [Read section](https://asc.understandingaccounting.org/asc/715/20/#65-transition-and-open-effective-date-information) SEC content: no ##### [715-20-65-1](https://asc.understandingaccounting.org/asc/715/20/#715-20-65-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:59:29.173Z to 2026-09-10T00:59:29.173Z Record version: sha256:0665b1d245bb2c32520eaf44bfc06524cf10a7c6cfd5fae7c6e3e2e67b7887a2 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Paragraph superseded on 11/03/2014 after the end of the transition period stated in FASB Statement No. 158, _Employers' Accounting for Defined Benefit Pension and Other Postretirement Plans_, and FSP FAS 158-1. ##### [715-20-65-2](https://asc.understandingaccounting.org/asc/715/20/#715-20-65-2) Pending content: no Source downloaded (UTC): 2026-09-10T00:59:29.173Z to 2026-09-10T00:59:29.173Z Record version: sha256:0d69e2d77127632da4ab3e6360a6eb39f297634fa1ff5dd0c6f93555facc92fa Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Paragraph superseded on 07/01/2010 after the end of the transition period stated in FSP FAS 132(R)-1, _Employers' Disclosures about Postretirement Benefit Plan Assets_. ##### [715-20-65-3](https://asc.understandingaccounting.org/asc/715/20/#715-20-65-3) Pending content: no Source downloaded (UTC): 2026-09-10T00:59:29.173Z to 2026-09-10T00:59:29.173Z Record version: sha256:b06c072359e8f5387bfee94ef7720e98f9babb4e74e5d6bc056741429d2d009c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Paragraph superseded on 08/12/2020 after the end of the transition period stated in Accounting Standards Update No. 2017-07, _Compensation—Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost_. ##### [715-20-65-4](https://asc.understandingaccounting.org/asc/715/20/#715-20-65-4) Pending content: no Source downloaded (UTC): 2026-09-10T00:59:29.173Z to 2026-09-10T00:59:29.173Z Record version: sha256:44e4825e45334ebb8d824b1662cfc8d71d237b71e05e37ff6047b5df93c58fd3 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Paragraph superseded on 07/10/2023 after the end of the transition period stated in Accounting Standards Update No. 2018-14, _Compensation—Retirement Benefits—Defined Benefit Plans—General (Subtopic 715-20): Disclosure Framework—Changes to the Disclosure Requirements for Defined Benefit Plans_. Source downloaded (UTC): 2026-09-10T00:59:35.849Z to 2026-09-10T00:59:35.849Z Record version: sha256:ff8a359d48b2388182dfccb63e831db6e39728efd08312dfdc5dafb23999ed0e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 715-20-S00: SEC 00 Status [Read section](https://asc.understandingaccounting.org/asc/715/20/#sec-00-status) SEC content: yes ##### [715-20-S00-1](https://asc.understandingaccounting.org/asc/715/20/#715-20-S00-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:59:35.849Z to 2026-09-10T00:59:35.849Z Record version: sha256:dbd784b10cffbd175f71a7e5e49e26573b02a5eb8a36cbdbe41ab43f1476e09b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following table identifies the changes made to this Subtopic.
ParagraphActionAccounting Standards UpdateDate
715-20-S99-1AmendedAccounting Standards Update No. 2010-0401/15/2010
Source downloaded (UTC): 2026-09-10T00:59:38.005Z to 2026-09-10T00:59:38.005Z Record version: sha256:caefddab9cf975051c5a2f2accee7e089934fb81264138180b84aa9ff18ccc19 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 715-20-S50: SEC 50 Disclosure [Read section](https://asc.understandingaccounting.org/asc/715/20/#sec-50-disclosure) SEC content: yes #### Determination of Vested Benefit Obligation for a Defined Benefit Pension Plan ##### [715-20-S50-1](https://asc.understandingaccounting.org/asc/715/20/#715-20-S50-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:59:38.005Z to 2026-09-10T00:59:38.005Z Record version: sha256:1bb151b53d36eaad375e49651c38cb1a44a455b95730119a6a0e4a638133a3cf Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See paragraph [715-20-S99-2](https://asc.understandingaccounting.org/asc/715/20/#715-20-S99-2), SEC Observer Comment: Determination of Vested Benefit Obligation for a Defined Benefit Pension Plan, for SEC Staff views on disclosures pertaining to the method chosen to measure the vested benefit obligation for a defined benefit pension plan. Source downloaded (UTC): 2026-09-10T00:59:41.720Z to 2026-09-10T00:59:41.720Z Record version: sha256:6ce8f1bf80ed90e6165695321ea4217c95de29638284fda4d39796343834a667 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 715-20-S55: SEC 55 Implementation Guidance and Illustrations [Read section](https://asc.understandingaccounting.org/asc/715/20/#sec-55-implementation-guidance-and-illustrations) SEC content: yes #### Selection of Discount Rate Used for Measuring Defined Benefit Pension Obligation and Obligations of Postretirement Plans Other Than Pensions ##### [715-20-S55-1](https://asc.understandingaccounting.org/asc/715/20/#715-20-S55-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:59:41.720Z to 2026-09-10T00:59:41.720Z Record version: sha256:61e2e94a564e53231c4d6d02d83ee8bd41f62e65c154db6630cd417d05f2e7b9 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See paragraph [715-20-S99-1](https://asc.understandingaccounting.org/asc/715/20/#715-20-S99-1), SEC Staff Announcement: Selection of Discount Rate Used for Measuring Defined Benefit Obligation and Obligations of Postretirement Plans Other than Pensions, for SEC Staff views on the selection of discount rates used for measuring defined benefit pension obligations and obligations of postretirement benefit plans other than pensions. Source downloaded (UTC): 2026-09-10T00:59:47.246Z to 2026-09-10T00:59:47.246Z Record version: sha256:0e3195de571492bddedda18061a7a4b5a8fbd7dbf0b9f49df28dd9b226da053a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 715-20-S99: SEC 99 SEC Materials [Read section](https://asc.understandingaccounting.org/asc/715/20/#sec-99-sec-materials) SEC content: yes #### SEC Staff Guidance ##### [715-20-S99-1](https://asc.understandingaccounting.org/asc/715/20/#715-20-S99-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:59:47.246Z to 2026-09-10T00:59:47.246Z Record version: sha256:23bb42644f1b0fd699ebd34e8c897d7d42e3244ed1806f7dd608b157a9e06b3e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following is the text of SEC Staff Announcement: Selection of Discount Rate Used for Measuring Defined Benefit Pension Obligation and Obligations of Postretirement Plans Other than Pensions. - The SEC Observer made the following announcement of the SEC staff's position on the selection of discount rates used for purposes of measuring defined benefit pension obligations under paragraph [715-30-35-44](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-44) and obligations of postretirement benefit plans other than pensions under paragraph [715-60-35-80](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-80). Those paragraphs provide guidance for selecting discount rates to measure obligations for pension benefits and postretirement benefits other than pensions. - At each measurement date, the SEC staff expects registrants to use discount rates to measure obligations for pension benefits and postretirement benefits other than pensions that reflect the then current level of interest rates. The staff suggests that fixed-income debt securities that receive one of the two highest ratings given by a recognized ratings agency be considered high quality (for example, a fixed-income security that receives a rating of Aa or higher from Moody's Investors Service, Inc.). ##### [715-20-S99-2](https://asc.understandingaccounting.org/asc/715/20/#715-20-S99-2) Pending content: no Source downloaded (UTC): 2026-09-10T00:59:47.246Z to 2026-09-10T00:59:47.246Z Record version: sha256:135ee92e48e3445669bacd4244e4e60b15648026d4d64094c7d7df2a6091aeef Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following is the text of SEC Observer Comment: Determination of Vested Benefit Obligation for a Defined Benefit Pension Plan. - Under the guidance in paragraph [715-30-35-41](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-41), an entity has the option of determining whether the vested benefit obligation for a defined benefit pension plan is the actuarial present value of the vested benefits to which the employee is entitled if the employee separates immediately or the actuarial present value of the vested benefits to which the employee is currently entitled but based on the employee's expected date of separation of retirement. The method used should be disclosed. Source downloaded (UTC): 2026-09-10T00:59:50.700Z to 2026-09-10T01:00:20.275Z Record version: sha256:61b6e84778c7ca74a1a578f44b3b5e7cd8078fbb4d547183c045df697dca7e88 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 715-30: Compensation—Retirement Benefits — Defined Benefit Plans—Pension ### Machine-generated study aids ```json { "summary": "ASC 715-30 governs an employer's accounting for single-employer defined benefit pension plans: it requires the employer to recognize the plan's funded status (projected benefit obligation versus fair value of plan assets) on the balance sheet and to recognize net periodic pension cost made up of service cost, interest cost, actual return on plan assets, and amortization of prior service cost/credit, net gain or loss, and any remaining transition asset or obligation. Gains, losses, and prior service cost are first recognized in other comprehensive income and amortized into net periodic pension cost over time (subject to the 10 percent corridor for net gains and losses). Separate Subsections govern settlements, curtailments, and certain termination benefits, which accelerate recognition in earnings of amounts sitting in accumulated other comprehensive income.", "key_points": [ "An employer recognizes an asset for an overfunded plan and a liability for an underfunded plan equal to the difference between the projected benefit obligation and the fair value of plan assets, aggregating all overfunded plans and, separately, all underfunded plans (715-30-25-1 through 25-2); each plan is accounted for separately and an asset of one plan may not offset a liability of another (715-30-25-6).", "Net periodic pension cost comprises service cost, interest cost, actual return on plan assets, amortization of prior service cost or credit, gain or loss, and amortization of any remaining transition asset or obligation (715-30-35-4), and only the service cost component may be capitalized into inventory or other assets (715-30-35-7A).", "The projected benefit obligation reflects assumed future compensation levels where the benefit formula is pay-related, while the accumulated benefit obligation uses only current and past compensation (715-30-35-1A through 35-2); benefits are attributed to service periods based on the plan's benefit formula (715-30-35-36), with ratable attribution required where the formula back-loads benefits (715-30-35-38).", "Prior service cost from a retroactive plan amendment is charged to other comprehensive income at the amendment date and amortized to net periodic pension cost over the future service periods of active employees expected to receive benefits (715-30-35-11); a retroactive benefit reduction creates a prior service credit applied first against remaining prior service cost (715-30-35-17).", "Gains and losses need not be recognized as they arise; at a minimum, the net gain or loss in accumulated other comprehensive income exceeding 10 percent of the greater of the projected benefit obligation or the market-related value of plan assets must be amortized over the average remaining service period (715-30-35-24), though immediate or other systematic methods are permitted if applied consistently (715-30-35-20, 35-25).", "Assumptions must be explicit best estimates; assumed discount rates reflect the rates at which the pension benefits could be effectively settled and must be reevaluated at each measurement date, and the expected long-term rate of return reflects only existing plan assets and current-year contributions (715-30-35-42 through 35-49).", "On settlement, the maximum gain or loss recognized in earnings is the net gain or loss plus any remaining transition asset in accumulated other comprehensive income, recognized pro rata for a partial settlement (715-30-35-79), and recognition is required only if the cost of all settlements exceeds service cost plus interest cost for the year (715-30-35-82); curtailment losses are recognized when probable and estimable and curtailment gains when employees terminate or the amendment is adopted (715-30-35-94), while special termination benefits are recognized when employees accept the offer (715-30-25-10)." ], "categories": [ "Compensation and benefits", "Recognition", "Subsequent measurement", "Presentation" ], "audience_level": "advanced", "student_note": "Pension accounting is a classic exam trap because two different numbers move at once: the balance sheet reports the full funded status immediately, while the income statement smooths gains, losses, and prior service cost through OCI amortization, with the difference each period running through other comprehensive income. Students commonly confuse the projected benefit obligation (includes future salary assumptions) with the accumulated benefit obligation (does not), and forget that only service cost is eligible for capitalization after ASU 2017-07.", "related_topics": [ "715-20", "715-60", "715-70", "715-10", "740-20", "420" ], "key_concepts": [ "defined benefit pension plan", "projected benefit obligation", "accumulated benefit obligation", "net periodic pension cost", "funded status", "prior service cost", "corridor amortization of net gain or loss", "settlement and curtailment" ] } ``` Source downloaded (UTC): 2026-09-10T00:59:50.700Z to 2026-09-10T00:59:50.700Z Record version: sha256:e8ba3f52dfb419fa1cd5fd26db12e343253cc0550c1b8ff46a19b4309c8001f0 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 715-30-00: 00 Status [Read section](https://asc.understandingaccounting.org/asc/715/30/#00-status) SEC content: no ##### [715-30-00-1](https://asc.understandingaccounting.org/asc/715/30/#715-30-00-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:59:50.700Z to 2026-09-10T00:59:50.700Z Record version: sha256:cd27a915000f748c64f2c6555c9aa1fd83d62215c4bce42447912f50c2ac4224 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following table identifies the changes made to this Subtopic.
ParagraphActionAccounting Standards UpdatesDate
Actuarial Funding MethodSupersededAccounting Standards Update No. 2017-0703/10/2017
Actuarial Gain or LossSupersededAccounting Standards Update No. 2017-0703/10/2017
Actuarial Gain or LossAmendedAccounting Standards Update No. 2014-0603/14/2014
Allocated ContractSupersededAccounting Standards Update No. 2017-0703/10/2017
Amortization (1st def.)AddedAccounting Standards Update No. 2014-0603/14/2014
Amortization (2nd def.)SupersededAccounting Standards Update No. 2014-0603/14/2014
Assumptions (1st def.)AddedAccounting Standards Update No. 2014-0603/14/2014
Assumptions (2nd def.)SupersededAccounting Standards Update No. 2014-0603/14/2014
Attribution (1st def.)AddedAccounting Standards Update No. 2014-0603/14/2014
Attribution (2nd def.)SupersededAccounting Standards Update No. 2014-0603/14/2014
Benefit ApproachSupersededAccounting Standards Update No. 2017-0703/10/2017
Benefit ApproachAmendedAccounting Standards Update No. 2014-0603/14/2014
BenefitsAmendedAccounting Standards Update No. 2016-1912/14/2016
Benefits (2nd def.)SupersededAccounting Standards Update No. 2014-0603/14/2014
Benefits (3rd def.)AddedAccounting Standards Update No. 2014-0603/14/2014
Cash Balance PlanSupersededAccounting Standards Update No. 2020-1010/29/2020
Contributory PlanSupersededAccounting Standards Update No. 2017-0703/10/2017
Contributory Plan (2nd def.)AddedAccounting Standards Update No. 2014-0603/14/2014
Contributory Plan (3rd def.)SupersededAccounting Standards Update No. 2014-0603/14/2014
Cost Approach (2nd def.)SupersededAccounting Standards Update No. 2014-0603/14/2014
Cost-Compensation ApproachSupersededAccounting Standards Update No. 2017-0703/10/2017
Defined Benefit Pension Plan (2nd def.)SupersededAccounting Standards Update No. 2014-0603/14/2014
Defined Benefit PlanAddedAccounting Standards Update No. 2014-0603/14/2014
Defined Contribution PlanAmendedAccounting Standards Update No. 2014-0603/14/2014
Discount RateAmendedAccounting Standards Update No. 2014-0603/14/2014
Expected Long-Term Rate of Return on Plan Assets (1st def.)AddedAccounting Standards Update No. 2014-0603/14/2014
Expected Long-Term Rate of Return on Plan Assets (2nd def.)SupersededAccounting Standards Update No. 2014-0603/14/2014
Expected Return on Plan Assets (1st def.)AddedAccounting Standards Update No. 2014-0603/14/2014
Expected Return on Plan Assets (2nd def.)SupersededAccounting Standards Update No. 2014-0603/14/2014
Funding MethodSupersededAccounting Standards Update No. 2017-0703/10/2017
Funding PolicySupersededAccounting Standards Update No. 2017-0703/10/2017
Funding Policy (2nd def.)SupersededAccounting Standards Update No. 2014-0603/14/2014
Funding Policy (3rd def.)AddedAccounting Standards Update No. 2014-0603/14/2014
Gain or Loss (1st def.)AddedAccounting Standards Update No. 2014-0603/14/2014
Gain or Loss (2nd def.)SupersededAccounting Standards Update No. 2014-0603/14/2014
Implicit Approach to AssumptionsSupersededAccounting Standards Update No. 2017-0703/10/2017
LossAmendedAccounting Standards Update No. 2014-0603/14/2014
Multiple-Employer Plan(1st def.)AddedAccounting Standards Update No. 2014-0603/14/2014
Multiple-Employer Plan (2nd def.)SupersededAccounting Standards Update No. 2014-0603/14/2014
Net Periodic Pension CostAmendedAccounting Standards Update No. 2017-0703/10/2017
Participant (2nd def.)AmendedAccounting Standards Update No. 2014-0603/14/2014
Participating InsuranceAddedAccounting Standards Update No. 2016-1912/14/2016
Participation Right (1st def.)SupersededAccounting Standards Update No. 2016-1912/14/2016
Participation Right (2nd def.)AddedAccounting Standards Update No. 2016-1912/14/2016
Pension FundAddedAccounting Standards Update No. 2014-0603/14/2014
Plan Amendment (1st def.)AddedAccounting Standards Update No. 2014-0603/14/2014
Plan Amendment (2nd def.)SupersededAccounting Standards Update No. 2014-0603/14/2014
Plan Assets Available for BenefitsSupersededAccounting Standards Update No. 2017-0703/10/2017
Plan Termination (1st def.)AddedAccounting Standards Update No. 2014-0603/14/2014
Plan Termination (2nd def.)SupersededAccounting Standards Update No. 2014-0603/14/2014
Prior Service Cost (2nd def.)AmendedAccounting Standards Update No. 2014-0603/14/2014
Single-Employer Plan (1st def.)AddedAccounting Standards Update No. 2014-0603/14/2014
Single-Employer Plan (2nd def.)SupersededAccounting Standards Update No. 2014-0603/14/2014
Sponsor (2nd def.)SupersededAccounting Standards Update No. 2017-0703/10/2017
Unallocated ContractSupersededAccounting Standards Update No. 2017-0703/10/2017
715-30-05-1AmendedAccounting Standards Update No. 2014-0603/14/2014
715-30-05-2AmendedAccounting Standards Update No. 2017-0703/10/2017
715-30-05-3AmendedAccounting Standards Update No. 2014-0603/14/2014
715-30-05-4AmendedAccounting Standards Update No. 2017-0703/10/2017
715-30-05-5SupersededAccounting Standards Update No. 2017-0703/10/2017
715-30-05-6AmendedAccounting Standards Update No. 2017-0703/10/2017
715-30-05-7SupersededAccounting Standards Update No. 2017-0703/10/2017
715-30-05-8SupersededAccounting Standards Update No. 2017-0703/10/2017
715-30-05-8AmendedAccounting Standards Update No. 2014-0603/14/2014
715-30-05-9AmendedAccounting Standards Update No. 2017-0703/10/2017
715-30-05-9AmendedAccounting Standards Update No. 2014-0603/14/2014
715-30-05-10SupersededAccounting Standards Update No. 2017-0703/10/2017
715-30-05-11SupersededAccounting Standards Update No. 2017-0703/10/2017
715-30-15-3AmendedAccounting Standards Update No. 2020-1010/29/2020
715-30-15-3AmendedAccounting Standards Update No. 2014-0603/14/2014
715-30-15-4AAddedAccounting Standards Update No. 2012-0410/01/2012
715-30-25-6AmendedAccounting Standards Update No. 2014-0603/14/2014
715-30-25-7AmendedAccounting Standards Update No. 2016-1912/14/2016
715-30-35-1AAmendedAccounting Standards Update No. 2014-0603/14/2014
715-30-35-4AmendedAccounting Standards Update No. 2014-0603/14/2014
715-30-35-7AmendedAccounting Standards Update No. 2014-0603/14/2014
715-30-35-7AAddedAccounting Standards Update No. 2017-0703/10/2017
715-30-35-10AmendedAccounting Standards Update No. 2014-0603/14/2014
715-30-35-18AmendedAccounting Standards Update No. 2014-0603/14/2014
715-30-35-21AmendedAccounting Standards Update No. 2014-0603/14/2014
715-30-35-22AmendedAccounting Standards Update No. 2014-0603/14/2014
715-30-35-42AmendedAccounting Standards Update No. 2014-0603/14/2014
715-30-35-44AmendedAccounting Standards Update No. 2012-0410/01/2012
715-30-35-47AmendedAccounting Standards Update No. 2014-0603/14/2014
715-30-35-53AmendedAccounting Standards Update No. 2016-1912/14/2016
715-30-35-59AmendedAccounting Standards Update No. 2016-1912/14/2016
715-30-35-63AAddedAccounting Standards Update No. 2015-0404/15/2015
715-30-35-63BAddedAccounting Standards Update No. 2015-0404/15/2015
715-30-35-66AAddedAccounting Standards Update No. 2015-0404/15/2015
715-30-35-66BAddedAccounting Standards Update No. 2015-0404/15/2015
715-30-35-70AmendedAccounting Standards Update No. 2014-0603/14/2014
715-30-35-71SupersededAccounting Standards Update No. 2020-1010/29/2020
715-30-35-72SupersededAccounting Standards Update No. 2020-1010/29/2020
715-30-35-75AmendedAccounting Standards Update No. 2014-0603/14/2014
715-30-35-76AmendedAccounting Standards Update No. 2014-0603/14/2014
715-30-35-79AmendedAccounting Standards Update No. 2016-1912/14/2016
715-30-35-79AmendedAccounting Standards Update No. 2014-0603/14/2014
715-30-35-88AmendedAccounting Standards Update No. 2016-1912/14/2016
715-30-35-90AmendedAccounting Standards Update No. 2014-0603/14/2014
715-30-35-91AmendedAccounting Standards Update No. 2014-0603/14/2014
715-30-45-1AmendedAccounting Standards Update No. 2014-0603/14/2014
715-30-55-3 through 55-7
AmendedAccounting Standards Update No. 2014-0603/14/2014
715-30-55-18AmendedAccounting Standards Update No. 2014-0603/14/2014
715-30-55-40AmendedAccounting Standards Update No. 2014-0603/14/2014
715-30-55-46AmendedAccounting Standards Update No. 2014-0603/14/2014
715-30-55-62AmendedAccounting Standards Update No. 2014-0603/14/2014
715-30-55-63AmendedAccounting Standards Update No. 2015-1006/12/2015
715-30-55-63AmendedAccounting Standards Update No. 2011-0909/21/2011
715-30-55-64AmendedAccounting Standards Update No. 2011-0909/21/2011
715-30-55-127AAddedAccounting Standards Update No. 2020-1010/29/2020
715-30-55-128AmendedAccounting Standards Update No. 2014-0603/14/2014
715-30-55-132AmendedAccounting Standards Update No. 2014-0603/14/2014
715-30-55-133AmendedAccounting Standards Update No. 2014-0603/14/2014
715-30-55-153AmendedAccounting Standards Update No. 2016-1912/14/2016
715-30-55-160AmendedAccounting Standards Update No. 2014-0603/14/2014
715-30-55-176AmendedAccounting Standards Update No. 2014-0603/14/2014
715-30-55-188AmendedAccounting Standards Update No. 2014-0603/14/2014
715-30-55-190AmendedMaintenance Update 2016-11 (PDF)06/27/2016
715-30-55-191SupersededAccounting Standards Update No. 2015-0101/09/2015
715-30-55-192SupersededAccounting Standards Update No. 2015-0101/09/2015
715-30-55-195AmendedAccounting Standards Update No. 2014-0804/10/2014
715-30-55-196AmendedAccounting Standards Update No. 2014-0804/10/2014
715-30-55-242AmendedAccounting Standards Update No. 2014-0804/10/2014
715-30-55-248AmendedAccounting Standards Update No. 2014-0804/10/2014
715-30-60-1AmendedAccounting Standards Update No. 2014-0603/14/2014
715-30-60-2AmendedAccounting Standards Update No. 2017-0703/10/2017
715-30-60-8AmendedAccounting Standards Update No. 2014-0603/14/2014
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/). Source downloaded (UTC): 2026-09-10T00:59:56.604Z to 2026-09-10T00:59:56.604Z Record version: sha256:da6f0070ee8e80dbeebe3fd972787ae00dec48eaf392ed8d2e74346ba489b923 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 715-30-15: 15 Scope and Scope Exceptions [Read section](https://asc.understandingaccounting.org/asc/715/30/#15-scope-and-scope-exceptions) SEC content: no #### Overall Guidance ##### [715-30-15-1](https://asc.understandingaccounting.org/asc/715/30/#715-30-15-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:59:56.604Z to 2026-09-10T00:59:56.604Z Record version: sha256:8be4377d85c30e44dc7f20605b11a7fb5c8e368cba3f413bf8e4373f5df70d59 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subtopic follows the same Scope and Scope Exceptions as outlined in the Overall Subtopic, see Section 715-10-15, with specific qualifications and exceptions noted below. ##### [715-30-15-2](https://asc.understandingaccounting.org/asc/715/30/#715-30-15-2) Pending content: no Source downloaded (UTC): 2026-09-10T00:59:56.604Z to 2026-09-10T00:59:56.604Z Record version: sha256:b1ebee5c79c7fa7648f72d2eb7a94d1ff81ff8a8b92ebbd8d56c992447b11d6b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The General Subsection of this Section establishes the pervasive scope for this Subtopic, with specific exceptions noted in the other Subsections of this Section. #### Transactions ##### [715-30-15-3](https://asc.understandingaccounting.org/asc/715/30/#715-30-15-3) Pending content: no Source downloaded (UTC): 2026-09-10T00:59:56.604Z to 2026-09-10T00:59:56.604Z Record version: sha256:17237bc1d05e5976558c3c988ba9d5e1ce65b35f61521616128227544b295ffd Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The guidance in this Subtopic applies to [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.)"), including but not limited to the following types of arrangements: 1. a Cash balance plans 2. b [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.") provided in the event of a voluntary or involuntary severance of employment (also called [termination indemnities](https://asc.understandingaccounting.org/glossary/t/#termination-indemnities "Arrangements, usually or more frequently encountered outside the United States, that are also referred to as termination allowances or severance indemnities. Termination indemnities are amounts payable to eligible employees upon termination of employment. Eligibility may be determined by law, by local custom, by the employer's policy, or by contract with the employer. Plans may or may not be in writing. Termination indemnities are normally, but not exclusively, associated with preretirement severance of employment. They are usually payable as a lump sum, or occasionally in a few payments over a short period of time.")) if such an arrangement is in substance a pension plan (for example, if the benefits are paid for virtually all terminations). ##### [715-30-15-4](https://asc.understandingaccounting.org/asc/715/30/#715-30-15-4) Pending content: no Source downloaded (UTC): 2026-09-10T00:59:56.604Z to 2026-09-10T00:59:56.604Z Record version: sha256:6978f39dc23280884c6517a191f461f5e45ff1816d3d87a331e7ce116c29c1ff Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The guidance in this Subtopic does not apply to the following types of benefit plans or arrangements: 1. a Life insurance benefits provided outside a pension plan or other postretirement health and welfare benefits 2. b Health care benefits provided through a pension plan. The accounting for those benefits is set forth in Subtopic 715-60. #### Plans with Characteristics of both a Defined Contribution and a Defined Benefit Plan ##### [715-30-15-4A](https://asc.understandingaccounting.org/asc/715/30/#715-30-15-4A) Pending content: no Source downloaded (UTC): 2026-09-10T00:59:56.604Z to 2026-09-10T00:59:56.604Z Record version: sha256:e7b4dcc99cbac411615fda2af62ce189d634612853096b881820ee319a054baa Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See paragraph [715-70-15-2](https://asc.understandingaccounting.org/asc/715/70/#715-70-15-2) for guidance for plans with characteristics of both a defined contribution and a defined benefit plan. ### Settlements, Curtailments, and Certain Termination Benefits #### Overall Guidance ##### [715-30-15-5](https://asc.understandingaccounting.org/asc/715/30/#715-30-15-5) Pending content: no Source downloaded (UTC): 2026-09-10T00:59:56.604Z to 2026-09-10T00:59:56.604Z Record version: sha256:ee042583890dd6680d1afde2c2aa2fd3a32926d6aa0ab99a0eb22445367e5212 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The Settlements, Curtailments, and Certain Termination Benefits Subsections follow the same Scope and Scope Exceptions as outlined in the General Subsection of this Subtopic, see paragraph [715-30-15-1](https://asc.understandingaccounting.org/asc/715/30/#715-30-15-1), with specific exceptions noted below. #### Transactions ##### [715-30-15-6](https://asc.understandingaccounting.org/asc/715/30/#715-30-15-6) Pending content: no Source downloaded (UTC): 2026-09-10T00:59:56.604Z to 2026-09-10T00:59:56.604Z Record version: sha256:f3fb99403ec1e3f22ae3e7913429c67e524ea140cb99b9558298a5a757e3a9ff Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The guidance in the Settlements, Curtailments, and Certain Termination Benefits Subsections applies to the following transactions and activities: 1. a If all or part of the plan's pension benefit obligation is settled or the plan is curtailed: 1. 1 Plan settlements. Examples of transactions that constitute a [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.") include making lump-sum cash payments to plan participants in exchange for their rights to receive specified [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.") and purchasing nonparticipating annuity contracts to cover [vested benefits](https://asc.understandingaccounting.org/glossary/v/#vested-benefits "Benefits for which the employee's right to receive a present or future pension benefit is no longer contingent on remaining in the service of the employer. (Other conditions, such as inadequacy of the pension fund, may prevent the employee from receiving the vested benefit.) Under graded vesting, the initial vested right may be to receive in the future a stated percentage of a pension based on the number of years of accumulated credited service; thereafter, the percentage may increase with the number of years of service or of age until the right to receive the entire benefit has vested."). 2. 2 [Plan curtailments](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."), which include: 1. i Termination of employees' services earlier than expected, which may or may not involve closing a facility or discontinuing a component of an entity. 2. ii Termination or suspension of a plan so that employees do not earn additional defined benefits for future services. In the latter situation, future [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.") may be counted toward vesting of benefits accumulated based on past service. 2. b Termination benefits provided under an ongoing defined benefit pension arrangement. 3. c Other termination benefits not otherwise addressed in the following: 1. 1 Topic 420 2. 2 Topic 710 3. 3 Topic 712 4. 4 Subtopic 715-60. ##### [715-30-15-7](https://asc.understandingaccounting.org/asc/715/30/#715-30-15-7) Pending content: no Source downloaded (UTC): 2026-09-10T00:59:56.604Z to 2026-09-10T00:59:56.604Z Record version: sha256:5434860851403ae288dfccfad4e6e71fc4e8b9455112126afac6b99a00b53bb6 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The guidance in the Settlements, Curtailments, and Certain Termination Benefits Subsections does not apply to the following transactions and activities: 1. a An employer's withdrawal from a multiemployer pension plan 2. b Other termination benefits addressed in the following: 1. 1 Topic 420 2. 2 Topic 710 3. 3 Topic 712 4. 4 Subtopic 715-60. 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) . Source downloaded (UTC): 2026-09-10T01:00:03.442Z to 2026-09-10T01:00:03.442Z Record version: sha256:a9e94e78a36ac4484219abc0ddaf44bae4e6f6eb0834e59fd2860b1161dfd42f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 715-30-35: 35 Subsequent Measurement [Read section](https://asc.understandingaccounting.org/asc/715/30/#35-subsequent-measurement) SEC content: no #### Use of Reasonable Approximations ##### [715-30-35-1](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-1) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:03.442Z to 2026-09-10T01:00:03.442Z Record version: sha256:f4fc682a40eb3658283d0b33d6b565099bc5d0749f903fb1e77b1e805ca804fa Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subtopic is intended to specify accounting objectives and results rather than specific computational means of obtaining those results. If estimates, averages, or computational shortcuts can reduce the cost of applying this Subtopic, their use is appropriate, provided the results are reasonably expected not to be materially different from the results of a detailed application. #### Benefit Obligations ##### [715-30-35-1A](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-1A) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:03.442Z to 2026-09-10T01:00:03.442Z Record version: sha256:70964fbd54eae0c63c58491dba4986e6addea4ee67d992ced9516301d10a2eb1 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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).") as of a date is 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 all [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.") attributed by the [plan's benefit formula](https://asc.understandingaccounting.org/glossary/p/#plan-s-benefit-formula "See Pension Benefit Formula.") to employee [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.") rendered before that date. The projected benefit obligation is measured using an [assumption](https://asc.understandingaccounting.org/glossary/a/#assumptions "Estimates of the occurrence of future events affecting pension costs and other postretirement benefit costs (as applicable), such as turnover, retirement age, mortality, withdrawal, disablement, dependency status, per capita claims costs by age, health care cost trend rates, levels of Medicare and other health care providers' reimbursements, changes in compensation and national pension benefits, and discount rates to reflect the time value of money.") as to future compensation levels if the pension [benefit formula](https://asc.understandingaccounting.org/glossary/b/#benefit-formula "See Pension Benefit Formula.") is based on those future compensation levels. Plans for which the pension benefit formula is based on future compensation are sometimes called pay-related, [final-pay](https://asc.understandingaccounting.org/glossary/f/#final-pay-formula "A benefit formula that bases benefits on the employee's compensation over a specified number of years near the end of the employee's service period or on the employee's highest compensation periods. For example, a plan might provide annual pension benefits equal to 1 percent of the employee's average salary for the last 5 years (or the highest consecutive 5 years) for each year of service. A final-pay plan is a plan with such a formula."), final-average-pay, or [career-average-pay](https://asc.understandingaccounting.org/glossary/c/#career-average-pay-formula "A benefit formula that bases benefits on the employee's compensation over the entire period of service with the employer. A career-average-pay plan is a plan with such a formula.") plans. Plans for which the pension benefit formula is not based on future compensation levels are called non-pay-related or [flat-benefit plans](https://asc.understandingaccounting.org/glossary/f/#flat-benefit-formula "A benefit formula that bases benefits on a fixed amount per year of service, such as $20 of monthly retirement income for each year of credited service. A flat-benefit plan is a plan with such a formula."). The projected benefit obligation is a measure of benefits attributed to service to date assuming that the plan continues in effect and that estimated future events (including compensation increases, [turnover](https://asc.understandingaccounting.org/glossary/t/#turnover "Termination of employment for a reason other than death or retirement."), and [mortality](https://asc.understandingaccounting.org/glossary/m/#mortality "The relative incidence of death in a given time or place.")) occur. ##### [715-30-35-2](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-2) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:03.442Z to 2026-09-10T01:00:03.442Z Record version: sha256:11dbc89a543adcb8adf22beb36082432a9fa319a3344c51a5bc12c1d0f173e82 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The [accumulated benefit obligation](https://asc.understandingaccounting.org/glossary/a/#accumulated-benefit-obligation "The actuarial present value of benefits (whether vested or nonvested) attributed, generally by the pension benefit formula, to employee service rendered before a specified date and based on employee service and compensation (if applicable) before that date. The accumulated benefit obligation differs from the projected benefit obligation in that it includes no assumption about future compensation levels. For plans with flat-benefit or non-pay-related pension benefit formulas, the accumulated benefit obligation and the projected benefit obligation are the same.") as of a date is the actuarial present value of benefits attributed by the pension benefit formula to employee service rendered before that date and based on current and past compensation levels. The accumulated benefit obligation differs from the projected benefit obligation in that it includes no assumption about future compensation levels. For plans with flat-benefit or non-pay-related pension benefit formulas, the accumulated benefit obligation and the projected benefit obligation are the same. The accumulated benefit obligation and the [vested benefit obligation](https://asc.understandingaccounting.org/glossary/v/#vested-benefit-obligation "The actuarial present value of vested benefits.") provide information about the obligation the employer would have if the plan were discontinued. #### Components of Net Periodic Pension Cost ##### [715-30-35-3](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-3) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:03.442Z to 2026-09-10T01:00:03.442Z Record version: sha256:a22b527890b85e95310a1d05c719e2635f5fa614866adb5dd704f9b2409117af Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [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.") has often been viewed as a single homogeneous amount, but in fact it is made up of several components that reflect different aspects of the employer's financial arrangements as well as the cost of benefits earned by employees. The cost of a benefit can be determined without regard to how the employer decides to finance the plan. ##### [715-30-35-4](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-4) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:03.442Z to 2026-09-10T01:00:03.442Z Record version: sha256:7fdf3e910c8faeded4ab5bc9ef4864044ac872bba1e0e7ff0cb7ddc81f1199a8 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. All of the following components shall be included in the net pension cost recognized for a period by an employer sponsoring 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.)"): 1. a [Service cost](https://asc.understandingaccounting.org/glossary/s/#service-cost-component-of-net-periodic-pension-cost "A component of net periodic pension cost recognized in a period determined as the actuarial present value of benefits attributed by the pension benefit formula to services rendered by employees during that period. The service cost component is a portion of the projected benefit obligation and is unaffected by the funded status of the plan.") 2. b [Interest cost](https://asc.understandingaccounting.org/glossary/i/#interest-cost-component-of-net-periodic-pension-cost "The amount recognized in a period determined as the increase in the projected benefit obligation due to the passage of time.") 3. c [Actual return on plan assets](https://asc.understandingaccounting.org/glossary/a/#actual-return-on-plan-assets-component-of-net-periodic-pension-cost "For a funded plan, the actual return on plan assets is determined as the difference between the fair value of plan assets at the end of the period and the fair value at the beginning of the period, adjusted for contributions and payments of benefits during the period."), if any 4. d [Amortization](https://asc.understandingaccounting.org/glossary/a/#amortization "The process of reducing a recognized liability systematically by recognizing gains or by reducing a recognized asset systematically by recognizing losses. In accounting for pension benefits or other postretirement benefits, amortization also means the systematic recognition in net periodic pension cost or other postretirement benefit cost over several periods of amounts previously recognized in other comprehensive income, that is, gains or losses, prior service cost or credits, and any transition obligation or asset.") of any [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.") or credit included in accumulated other comprehensive income 5. e [Gain or loss](https://asc.understandingaccounting.org/glossary/g/#gain-or-loss-component-of-net-periodic-pension-cost "The sum of the difference between the actual return on plan assets and the expected return on plan assets and the amortization of the net gain or loss recognized in accumulated other comprehensive income. The gain or loss component is the net effect of delayed recognition of gains and losses in determining net periodic pension cost (the net change in the gain or loss) in accumulated other comprehensive income except that it does not include changes in the projected benefit obligation occurring during the period and deferred for later recognition in net periodic pension cost.") (including the effects of changes in assumptions), which includes, to the extent recognized (see paragraph [715-30-35-26](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-26)), amortization of the net gain or loss included in accumulated other comprehensive income 6. f Amortization of any net transition asset or obligation existing at the date of initial application of this Subtopic and remaining in accumulated other comprehensive income. ##### [715-30-35-5](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-5) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:03.442Z to 2026-09-10T01:00:03.442Z Record version: sha256:624809ff430ed42fae6e7a74e35df1754bddf46b39848311b4b7873cd5acee6f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Note that both the [return on plan assets](https://asc.understandingaccounting.org/glossary/a/#actual-return-on-plan-assets-component-of-net-periodic-pension-cost "For a funded plan, the actual return on plan assets is determined as the difference between the fair value of plan assets at the end of the period and the fair value at the beginning of the period, adjusted for contributions and payments of benefits during the period.") and interest cost components are in substance financial items rather than employee compensation costs. An employer may have net periodic pension cost that is a net credit (that is, net periodic pension income) as noted in paragraph [715-30-55-3](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-3). ##### [715-30-35-6](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-6) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:03.442Z to 2026-09-10T01:00:03.442Z Record version: sha256:d4d6bd444db6b18ce4226cb07d38672d618df0fdfc3b3234dd0c0a2819701365 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The service cost component of net periodic pension cost is the actuarial present value of benefits attributed by the plan's benefit formula to services rendered by employees during the period. The service cost component is conceptually the same for an unfunded plan, a plan with minimal funding, and a well-funded plan. ##### [715-30-35-7](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-7) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:03.442Z to 2026-09-10T01:00:03.442Z Record version: sha256:cecad1e71d2f821b797142a688e32b0bfd78c546a8fb35e66cb4ec9d26f39e2a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The measurement of the service cost component requires use of an [attribution](https://asc.understandingaccounting.org/glossary/a/#attribution "The process of assigning pension or other postretirement benefits or costs to periods of employee service.") method and assumptions. That measurement is discussed in paragraphs [715-30-35-29 through 35-46](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-29) . ##### [715-30-35-7A](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-7A) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:03.442Z to 2026-09-10T01:00:03.442Z Record version: sha256:bcae22a75c40be21a16245b0f521eef2531cd610155938473be04758809e5184 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The service cost component shall be the only component of net periodic pension cost eligible to be capitalized as part of the cost of inventory or other assets. ##### [715-30-35-8](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-8) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:03.442Z to 2026-09-10T01:00:03.442Z Record version: sha256:c2353a3da95245044dd07cf80604b878208f79f687a8c5285763c2e5058abbf5 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The interest cost component of net periodic pension cost is interest on the projected benefit obligation, which is a discounted amount. Measuring the projected benefit obligation as a present value requires accrual of an interest cost at rates equal to the assumed [discount rates](https://asc.understandingaccounting.org/glossary/d/#discount-rate "A rate or rates used to reflect the time value of money. Discount rates are used in determining the present value as of the measurement date of future cash flows currently expected to be required to satisfy the pension obligation or other postretirement benefit obligation. See Actuarial Present Value."). ##### [715-30-35-9](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-9) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:03.442Z to 2026-09-10T01:00:03.442Z Record version: sha256:28a089b5214e7cd81ac29207712820014dd0213cfda60928c62e9d33c5d2a726 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The interest cost component of net periodic pension cost shall not be considered interest for purposes of applying Subtopic 835-20. ##### [715-30-35-10](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-10) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:03.442Z to 2026-09-10T01:00:03.442Z Record version: sha256:5b2eb6adc471a15c65d51754c4d5edcb75153076a59196b5da15b448a9949e9f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Plan amendments](https://asc.understandingaccounting.org/glossary/p/#plan-amendment "A change in the existing terms of a plan or the initiation of a new plan. A plan amendment may increase benefits (a positive plan amendment), or reduce or eliminate benefits (a negative plan amendment), including those benefits attributed to years of service already rendered.") (including initiation of a plan) often include provisions that grant increased benefits based on services rendered in prior periods. Because plan amendments are granted with the expectation that the employer will realize economic benefits in future periods, this Subtopic does not require the cost of providing such retroactive benefits (that is, prior service cost) to be included in net periodic pension cost entirely in the year of the amendment, absent the conditions addressed in paragraph [715-30-35-16](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-16), but provides for recognition during the future service periods of those employees active at the date of the amendment who are expected to receive benefits under the plan. ##### [715-30-35-11](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-11) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:03.442Z to 2026-09-10T01:00:03.442Z Record version: sha256:de7470905399ced77e35d8a1a3a5ea6d5b093533fe78afa5356f980266daee0d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A plan amendment that retroactively increases benefits (including benefits that are granted to retirees) increases the projected benefit obligation. The cost of the benefit improvement shall be recognized as a charge to other comprehensive income at the date of the amendment. Except as specified in paragraphs [715-30-35-13 through 35-16](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-13) , that prior service cost shall be amortized as a component of net periodic pension cost by assigning an equal amount to each future period of service of each employee active at the date of the amendment who is expected to receive benefits under the plan. If all or almost all of a plan's participants are inactive, the cost of retroactive plan amendments affecting benefits of inactive participants shall be amortized based on the remaining life expectancy of those participants instead of based on the remaining service period. Other comprehensive income is adjusted each period as prior service cost is amortized. ##### [715-30-35-12](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-12) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:03.442Z to 2026-09-10T01:00:03.442Z Record version: sha256:7dd3747870a5ddc9c662182b409c94f84ba83b9e2c003a51f01ca2a4716b07a4 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See Example 1 (paragraph [715-30-55-93](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-93)) for an illustration of this guidance to amortize prior service cost. ##### [715-30-35-13](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-13) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:03.442Z to 2026-09-10T01:00:03.442Z Record version: sha256:147b7cfa3de43478b8c65bfcebd46ec1e110b3da2b9e6c9477190a95e28444df Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. To reduce the complexity and detail of the computations required, consistent use of an alternative approach that more rapidly amortizes the cost of retroactive amendments is acceptable. For example, a straight-line amortization of the cost over the average remaining service period of employees expected to receive benefits under the plan is acceptable. ##### [715-30-35-14](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-14) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:03.442Z to 2026-09-10T01:00:03.442Z Record version: sha256:e346f11607cf1297ae851c7dec57532b744e735f2533fe13740043b57b5388a6 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In some situations a history of regular plan amendments and other evidence may indicate that the period during which the employer expects to realize economic benefits from an amendment granting retroactive benefits is shorter than the entire remaining service period of the active employees. Identification of such situations requires an assessment of the individual circumstances and the substance of the particular plan situation. In those circumstances, the amortization of prior service cost shall be accelerated to reflect the more rapid expiration of the employer's economic benefits and to recognize the cost in the periods benefited. ##### [715-30-35-15](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-15) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:03.442Z to 2026-09-10T01:00:03.442Z Record version: sha256:002c760cbc6dc31f21684aea3566851d5fa9ae3d3ce0e2f5bc0c146bc33069e4 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Once a schedule of amortization of prior service cost from a specific retroactive plan amendment has been established, that schedule generally should not be revised. The initial schedule shall be revised only if a [curtailment](https://asc.understandingaccounting.org/glossary/c/#curtailment "See Plan Curtailment.") occurs (see paragraph [715-30-35-92](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-92)) or if events indicate that the period during which the employer expects to realize future economic benefits from the retroactive plan amendment giving rise to the prior service cost is shorter than originally estimated or the future economic benefits have been impaired. The schedule shall not be revised because of ordinary variances in expected service lives of employees, nor shall the schedule be revised so that the prior service cost is recognized in net periodic pension cost more slowly. ##### [715-30-35-16](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-16) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:03.442Z to 2026-09-10T01:00:03.442Z Record version: sha256:121ed128e3e989cda163b06dab90d63a20c348147aa5ce82f709c2fc3711005e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Prior service cost is recognized immediately in other comprehensive income, unless, based on an assessment of the facts and circumstances, the employer does not expect to realize any future economic benefits from that retroactive plan amendment (see paragraph [715-30-35-14](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-14)). However, this Subtopic does not permit an accounting policy to recognize immediately as a component of net periodic pension cost the cost of all plan amendments that grant increased benefits for services rendered in prior periods. Adopting an accounting policy to recognize prior service cost immediately in net periodic pension cost would preclude making that assessment for future plan amendments as they occur. ##### [715-30-35-17](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-17) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:03.442Z to 2026-09-10T01:00:03.442Z Record version: sha256:234dc6b2165567acaf0ebf634d8d9063ea236927d43640f6b7a2d6fbf913be19 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A plan amendment that retroactively reduces, rather than increases, benefits decreases the projected benefit obligation. The reduction in benefits shall be recognized as a credit (prior service credit) to other comprehensive income that shall be used first to reduce any remaining prior service cost included in accumulated other comprehensive income. Any remaining prior service credit shall be amortized as a component of net periodic pension cost on the same basis as the cost of a benefit increase. ##### [715-30-35-18](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-18) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:03.442Z to 2026-09-10T01:00:03.442Z Record version: sha256:c51e157994b26b41d4d43abbb910326c05e213774f8e9d80bc867cdbb8914b0d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. As established in the definition of the term, a gain or loss results from a change in the value of either the projected benefit obligation or the [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.") resulting from experience different from that assumed or from a change in an actuarial assumption. This Subtopic generally does not distinguish between gains and losses that result from experience different from that assumed or from changes in assumptions. Gains and losses include amounts that have been realized, for example by sale of a security, as well as amounts that are unrealized. ##### [715-30-35-19](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-19) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:03.442Z to 2026-09-10T01:00:03.442Z Record version: sha256:4cdc934967cd7a0ffaea5f903910fb0c587cc772b990d601caa563453cfdbcb5 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Because gains and losses may reflect refinements in estimates as well as real changes in economic values and because some gains in one period may be offset by losses in another or vice versa, this Subtopic does not require recognition of gains and losses as components of net pension cost of the period in which they arise. ##### [715-30-35-20](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-20) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:03.442Z to 2026-09-10T01:00:03.442Z Record version: sha256:6c7537f071cd12f03383667dc1e96a3febd2fc430b4c82253470e6db9ffa19b0 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. However, immediate recognition of gains and losses as a component of net periodic pension cost is permitted if that method is applied consistently, and is applied to all gains and losses on both plan assets and obligations. ##### [715-30-35-21](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-21) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:03.442Z to 2026-09-10T01:00:03.442Z Record version: sha256:dcb38f0e2254326d62bdedca5d03a31e551c935817fc24e075683c0e8cb36a51 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Gains and losses that are not recognized immediately as a component of net periodic pension cost shall be recognized as increases or decreases in other comprehensive income as they arise. Accounting for [plan terminations](https://asc.understandingaccounting.org/glossary/p/#plan-termination "An event in which the pension plan or postretirement benefit plan ceases to exist and all benefits are settled by the purchase of insurance contracts (for example, annuities) or by other means. The plan may or may not be replaced by another plan. A plan termination with a replacement plan may or may not be in substance a plan termination for accounting purposes.") and [curtailments](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.") and other circumstances in which recognition of gains and losses as a component of net periodic pension cost might not be delayed is addressed in the Settlements, Curtailments, and Certain Termination Benefits Subsection of this Section. ##### [715-30-35-22](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-22) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:03.442Z to 2026-09-10T01:00:03.442Z Record version: sha256:5318e77fe1a4c5f67d2682c7e5169f68bca08413e97d5bf2bc04ae6156962069 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Asset gains and losses are differences between the actual return on plan assets during a period and the [expected return on plan assets](https://asc.understandingaccounting.org/glossary/e/#expected-return-on-plan-assets "An amount calculated as a basis for determining the extent of delayed recognition of the effects of changes in the fair value of plan assets. The expected return on plan assets is determined based on the expected long-term rate of return on plan assets and the market-related value of plan assets.") for that period. Asset gains and losses include both changes reflected in the [market-related value of plan assets](https://asc.understandingaccounting.org/glossary/m/#market-related-value-of-plan-assets "A balance used to calculate the expected return on plan assets. The market-related value of plan assets is either fair value or a calculated value that recognizes changes in fair value in a systematic and rational manner over not more than five years. Different ways of calculating market-related value may be used for different classes of assets (for example, an employer might use fair value for bonds and a five-year-moving-average value for equities), but the manner of determining market-related value is required to be applied consistently from year to year for each asset class. For a method to meet the criteria of being systematic and rational, it must reflect only the changes in the fair value of plan assets between various dates.") and changes not yet reflected in the market-related value (that is, the difference between the fair value of assets and the market-related value). Gains or losses on transferable securities issued by the employer and included in plan assets are also included in asset gains and losses. Asset gains and losses not yet reflected in market-related value are not required to be amortized under paragraphs [715-30-35-24 through 35-25](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-24) . ##### [715-30-35-23](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-23) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:03.442Z to 2026-09-10T01:00:03.442Z Record version: sha256:63992c81ae155181f6ee0eeddbbf9a5fb70f38d8f5dbda758d3eaecf20885ba4 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In other words, the expected return on plan assets generally will be different from the actual return on plan assets for the year. This Subtopic provides for recognition of that difference (a net gain or loss) in other comprehensive income in the period it arises. The amount recognized in other comprehensive income is also a component of net periodic pension cost for the current period. Thus, the amount recognized in other comprehensive income and the actual return on plan assets, when aggregated, equal the expected return on plan assets. The amount recognized in accumulated other comprehensive income affects future net periodic pension cost through subsequent amortization, if any, of the net gain or loss. ##### [715-30-35-24](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-24) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:03.442Z to 2026-09-10T01:00:03.442Z Record version: sha256:3c733eef88d9f32d0ad2ee8ff0db69e7f1df8fe05fc89986c90a220d0a6e2694 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. As a minimum, amortization of a net gain or loss included in accumulated other comprehensive income (excluding asset gains and losses not yet reflected in market-related value) shall be included as a component of net pension cost for a year if, as of the beginning of the year, that net gain or loss exceeds 10 percent of the greater of the projected benefit obligation or the market-related value of plan assets. If amortization is required, the minimum amortization shall be that excess divided by the average remaining service period of active employees expected to receive benefits under the plan. The amortization must always reduce the beginning-of-the-year balance. Amortization of a net gain results in a decrease in net periodic pension cost; amortization of a net [loss](https://asc.understandingaccounting.org/glossary/l/#loss "See Gain or Loss.") results in an increase in net periodic pension cost. If all or almost all of a plan's participants are inactive, the average remaining life expectancy of the inactive participants shall be used instead of average remaining service. ##### [715-30-35-25](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-25) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:03.442Z to 2026-09-10T01:00:03.442Z Record version: sha256:fc105f444892cbd736d6c45ac6bed8653b3e23165367a8fd33bff85a55dd224d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Any systematic method of amortizing gains or losses may be used in lieu of the minimum specified in the preceding paragraph provided that all of the following conditions are met: 1. a The minimum is used in any period in which the minimum amortization is greater (reduces the net balance included in accumulated other comprehensive income by more). 2. b The method is applied consistently. 3. c The method is applied similarly to both gains and losses. ##### [715-30-35-26](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-26) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:03.442Z to 2026-09-10T01:00:03.442Z Record version: sha256:608a5e08a7956aced86cd00240dc87e86bf1968a6a40d261d14b1367e6ce25b7 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The [gain or loss component of net periodic pension cost](https://asc.understandingaccounting.org/glossary/g/#gain-or-loss-component-of-net-periodic-pension-cost "The sum of the difference between the actual return on plan assets and the expected return on plan assets and the amortization of the net gain or loss recognized in accumulated other comprehensive income. The gain or loss component is the net effect of delayed recognition of gains and losses in determining net periodic pension cost (the net change in the gain or loss) in accumulated other comprehensive income except that it does not include changes in the projected benefit obligation occurring during the period and deferred for later recognition in net periodic pension cost.") shall consist of both of the following: 1. a The difference between the actual return on plan assets and the expected return on plan assets 2. b Amortization of the net gain or loss included in accumulated other comprehensive income. ##### [715-30-35-27](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-27) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:03.442Z to 2026-09-10T01:00:03.442Z Record version: sha256:e0354b618eb452a53f214d1880896e960ec9ddf34e666a42b7ad641f408ec4ca Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Consequently, as stated in the definition of the term, the gain or loss component is the net effect of delayed recognition of gains and losses in determining net periodic pension cost (the net change in the gain or loss) in accumulated other comprehensive income except that it does not include changes in the projected benefit obligation occurring during the period and deferred for later recognition in net periodic pension cost. ##### [715-30-35-28](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-28) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:03.442Z to 2026-09-10T01:00:03.442Z Record version: sha256:a08eb4d14615870c350b6b6c93f81ceda734776698df1d03b1d7a7ea4cabf2e6 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See Example 2 (paragraph [715-30-55-101](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-101)) for an illustration of this guidance on gains and losses. #### Measurement of Costs and Obligations ##### [715-30-35-29](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-29) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:03.442Z to 2026-09-10T01:00:03.442Z Record version: sha256:14a9d68b67e6ea39302b71f529d093ccdcf5b86a345038a87a5c1778bb97c98b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Any method of pension accounting that recognizes cost before the payment of benefits to retirees must deal with two problems stemming from the nature of the defined benefit pension contract. First, estimates or assumptions must be made concerning the future events that will determine the amount and timing of the benefit payments. Second, some approach to attributing the cost of [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 individual years of service must be selected. Thus, the assumptions and the attribution of cost to periods of employee service are fundamental to the measurements of net periodic pension cost and pension obligations required by this Subtopic. For example, the service component of net periodic pension cost, the projected benefit obligation, and the accumulated benefit obligation are based on an attribution of pension benefits to periods of employee service and on the use of actuarial assumptions to calculate the actuarial present value of those benefits. ##### [715-30-35-30](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-30) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:03.442Z to 2026-09-10T01:00:03.442Z Record version: sha256:46ac1d055f2cdc091fa46ba98218b57b4ac9fa1b171392a30ca40edb47800c5e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Paragraph [715-30-35-42](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-42) requires use of explicit assumptions, each of which individually represents the best estimate of a particular future event. This Subtopic also requires use of the terms of the pension plan itself, specifically the plan's benefit formula, as a basis for attributing benefits earned and their cost to periods of employee service. ##### [715-30-35-31](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-31) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:03.442Z to 2026-09-10T01:00:03.442Z Record version: sha256:f6d9677687daeedaf0aa3f7593da7628bb712da1234cb11c85afa40d9c8bfb9f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The service cost component of net periodic pension cost and the projected benefit obligation shall reflect future compensation levels to the extent that the pension benefit formula defines pension benefits wholly or partially as a function of future compensation levels (that is, for a final-pay plan or a career-average-pay plan). Future increases for which a present commitment exists as described in paragraph [715-30-35-34](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-34) shall be similarly considered. Assumed compensation levels shall reflect an estimate of the actual future compensation levels of the individual employees involved, including future changes attributed to general price levels, productivity, seniority, promotion, and other factors. All assumptions shall be consistent to the extent that each reflects expectations of the same future economic conditions, such as future rates of inflation. Measuring service cost and the projected benefit obligation based on estimated future compensation levels entails considering indirect effects, such as changes under existing law in social security benefits or benefit limitations that would affect benefits provided by the plan, for example, those currently imposed by Section 415 of the Internal Revenue Code. However, possible amendments of the law shall not be considered in determining those pension measurements. Assumed compensation levels shall be consistent with assumed discount rates to the extent that both incorporate expectations of the same future economic conditions. Paragraphs [715-30-55-20 through 55-22](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-20) discuss and provide examples of applying this guidance. ##### [715-30-35-32](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-32) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:03.442Z to 2026-09-10T01:00:03.442Z Record version: sha256:24d900881d8af0eeab0edd03dc398dfce5d1bde2f1e66e95b9158ffc45001d90 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The accumulated benefit obligation shall be measured based on employees' history of service and compensation without an estimate of future compensation levels. Excluding estimated future compensation levels also means excluding indirect effects of future changes such as increases in the social security wage base. In measuring the accumulated benefit obligation, projected years of service shall be a factor only in determining employees' expected eligibility for particular benefits, such as any of the following: 1. a Increased benefits that are granted provided a specified number of years of service are rendered (for example, a pension benefit that is increased from $9 per month to $10 per month for each year of service if 20 or more years of service are rendered) 2. b Early retirement benefits 3. c Death benefits 4. d Disability benefits. ##### [715-30-35-33](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-33) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:03.442Z to 2026-09-10T01:00:03.442Z Record version: sha256:ea3941b1267e41d88847aa9809afbd47178819e9ce8bd7f9eb1f13943f763594 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph not used](https://asc.understandingaccounting.org/updates/page-1833002/). ##### [715-30-35-34](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-34) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:03.442Z to 2026-09-10T01:00:03.442Z Record version: sha256:c2f97d5fd65f027e872ac4d90d4f4d6ad17c0313fc932e43a6dfd4850f75173d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In some situations a history of regular increases in non-pay-related benefits or benefits under a career-average-pay plan and other evidence may indicate that an employer has a present commitment to make future amendments and that the substance of the plan is to provide benefits attributable to prior service that are greater than the benefits defined by the written terms of the plan. In those situations, the substantive commitment shall be the basis for the accounting. ##### [715-30-35-35](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-35) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:03.442Z to 2026-09-10T01:00:03.442Z Record version: sha256:0f01dfd88e8453dcca51ad4fa1eb4ddf3e5e73b2b0eb306f982b14e94f431b15 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Automatic benefit increases specified by the plan (for example, automatic cost-of-living increases) that are expected to occur shall be included in measurements of the projected, accumulated, and vested benefit obligations, and the service cost component required by this Subtopic. Also, retroactive plan amendments shall be included in the computation of the projected and accumulated benefit obligations once they have been contractually agreed to, even if some provisions take effect only in future periods. For example, if a plan amendment grants a higher benefit level for employees retiring after a future date, the higher benefit level shall be included in current-period measurements for employees expected to retire after that date. ##### [715-30-35-36](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-36) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:03.442Z to 2026-09-10T01:00:03.442Z Record version: sha256:c17e2f65d99f4f34c2ab18592caf17cf88caad7fb5284f15ea6caf7c524e5405 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For purposes of this Subtopic, pension benefits ordinarily shall be attributed to periods of employee service based on the plan's benefit formula to the extent that the formula states or implies an attribution. For example, if a plan's formula provides for a pension benefit of $10 per month for life for each year of service, the benefit attributed to each year of an employee's service is $10 times the number of months of life expectancy after retirement, and the cost attributable to each year is the actuarial present value of that benefit. For plan benefit formulas that define benefits similarly for all years of service, that attribution is a [benefit-years-of-service approach](https://asc.understandingaccounting.org/glossary/b/#benefit-years-of-service-approach "One of three benefit approaches. Under this approach, an equal portion of the total estimated benefit is attributed to each year of service. The actuarial present value of the benefits is derived after the benefits are attributed to the periods.") because it attributes the same amount of the pension benefit to each year of service. For final-pay and career-average-pay plans, that attribution is also the same as the projected unit credit or unit credit with service prorate actuarial cost method. For a flat-benefit plan, it is the same as the unit credit actuarial cost method. ##### [715-30-35-37](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-37) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:03.442Z to 2026-09-10T01:00:03.442Z Record version: sha256:f0020bf583046ca7b0f4105498f6b6e8b57adf835f0e3bd7b34e661209cafa9d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Some plans define different benefits for different years of service. For example, a step-rate plan might provide a benefit of 1 percent of final pay for each year of service up to 20 years and 1½ percent of final pay for years of service in excess of 20. Another plan might provide 1 percent of final pay for each year of service but limit the total benefit to no more than 20 percent of final pay. For such plans the attribution called for by this Subtopic will not assign the same amount of pension benefit to each year of service. ##### [715-30-35-38](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-38) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:03.442Z to 2026-09-10T01:00:03.442Z Record version: sha256:95b3272030933d5706f1023c1d06b3686be5525aaa3c0d795ee2a1443613933a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Some plans may have benefit formulas that attribute all or a disproportionate share of the total benefits provided to later years of service, thereby achieving in substance a delayed vesting of benefits. For example, a plan that provides no benefits for the first 19 years of service and a vested benefit of $10,000 for the 20th year is substantively the same as a plan that provides $500 per year for each of 20 years and requires 20 years of service before benefits vest. For such plans the total projected benefit shall be considered to accumulate in proportion to the ratio of the number of completed years of service to the number that will have been completed when the benefit is first fully vested. If a plan's benefit formula does not specify how a particular benefit relates to services rendered, the benefit shall be considered to accumulate in either of the following manners: 1. a For benefits of a type includable in [vested benefits](https://asc.understandingaccounting.org/glossary/v/#vested-benefits "Benefits for which the employee's right to receive a present or future pension benefit is no longer contingent on remaining in the service of the employer. (Other conditions, such as inadequacy of the pension fund, may prevent the employee from receiving the vested benefit.) Under graded vesting, the initial vested right may be to receive in the future a stated percentage of a pension based on the number of years of accumulated credited service; thereafter, the percentage may increase with the number of years of service or of age until the right to receive the entire benefit has vested.")(for example, a supplemental early retirement benefit that is a vested benefit after a stated number of years), in proportion to the ratio of the number of completed years of service to the number that will have been completed when the benefit is first fully vested 2. b For benefits of a type not includable in vested benefits (for example, a death or disability benefit that is payable only if death or disability occurs during active service), in proportion to the ratio of completed years of service to total projected years of service. ##### [715-30-35-39](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-39) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:03.442Z to 2026-09-10T01:00:03.442Z Record version: sha256:a07d5327ce3fcbda242747d555bf777cf0bda9d28c56d300aa5eba9836d708d8 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Under the attribution approach described in paragraphs [715-30-35-36 through 35-38](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-36) , the projected benefit obligation will always equal or exceed the accumulated benefit obligation. ##### [715-30-35-40](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-40) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:03.442Z to 2026-09-10T01:00:03.442Z Record version: sha256:aa07a3a6c16224d13f00c528109dabb89b45f3af16648fe1e8a2b669eb8d7097 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Under some defined benefit pension plans (typically foreign plans), the actuarial present value of benefits to which an employee is entitled if the employee terminates immediately may exceed the actuarial present value of benefits to which the employee is entitled at the expected date of separation based on service to date. For example, at one point in time, the provisions of one country's severance pay statute required that, in most cases, the benefit an employee had accrued for service to date was payable immediately upon separation. The undiscounted value of that benefit payable currently would exceed the actuarial present value of that benefit if payment was estimated to occur at the employee's expected termination date. Another example arises in another country where legislation required that deferred vested benefits of terminated employees be statutorily revalued from date of separation to normal retirement age. If the vested benefit obligation was determined assuming employee termination at the measurement date, that vested benefit obligation could exceed the accumulated benefit obligation if that obligation was measured giving consideration to a statutory revaluation only after the employee's expected date of termination. ##### [715-30-35-41](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-41) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:03.442Z to 2026-09-10T01:00:03.442Z Record version: sha256:80fef6567ecdf77c4b51d3afb907234529341ec2048731ab6768ab9c40c238aa Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The vested benefit obligation in the situations addressed in the preceding paragraph may be determined as either the actuarial present value of the vested benefits to which the employee is entitled if the employee separates immediately or the actuarial present value of the vested benefits to which the employee is currently entitled but based on the employee's expected date of separation or retirement. Either approach is acceptable for situations not otherwise addressed by this Subtopic in which the facts and circumstances are analogous to those in the preceding paragraph. #### Assumptions ##### [715-30-35-42](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-42) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:03.442Z to 2026-09-10T01:00:03.442Z Record version: sha256:d49f3f75bef8c75f34eaae966c231b85f0b669be749e7efaeb283f0fe4f00684 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subtopic requires an [explicit approach to assumptions](https://asc.understandingaccounting.org/glossary/e/#explicit-approach-to-assumptions "An approach under which each significant assumption used reflects the best estimate of the plan's future experience solely with respect to that assumption. See Implicit Approach to Assumptions."). That is, each significant assumption used shall reflect the best estimate solely with respect to that individual assumption. All assumptions shall presume that the plan will continue in effect in the absence of evidence that it will not continue. Actuarial assumptions reflect the time value of money (discount rate) and the probability of payment (assumptions as to mortality, turnover, early retirement, and so forth). ##### [715-30-35-43](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-43) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:03.442Z to 2026-09-10T01:00:03.442Z Record version: sha256:ddf82585fe358ae285b3a00a7cc193319a2ca957a680cee1661f24d4a10eb068 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Assumed discount rates shall reflect the rates at which the pension benefits could be effectively settled. It is appropriate in estimating those rates to look to available information about rates implicit in current prices of [annuity contracts](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.") that could be used to effect [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 the obligation (including information about available annuity rates published by the Pension Benefit Guaranty Corporation). In making those estimates, employers may also look to rates of return on high-quality fixed-income investments currently available and expected to be available during the period to maturity of the pension benefits. Assumed discount rates are used in measurements of the projected, accumulated, and vested benefit obligations and the service and interest cost components of net periodic pension cost. ##### [715-30-35-44](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-44) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:03.442Z to 2026-09-10T01:00:03.442Z Record version: sha256:9a3e5c97ef882464f13355bb62ff1a45c987247d72c297e7caae11c48d84672c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Paragraph [715-30-35-43](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-43) permits an employer to look to rates of return on high-quality fixed-income investments in determining assumed discount rates. The objective of selecting assumed discount rates using that method is to measure the single amount that, if invested at the measurement date in a portfolio of high-quality debt instruments, would provide the necessary future cash flows to pay the pension benefits when due. Notionally, that single amount, the projected benefit obligation, would equal the fair value of a portfolio of high-quality zero coupon bonds whose maturity dates and amounts would be the same as the timing and amount of the expected future benefit payments. Because cash inflows would equal cash outflows in timing and amount, there would be no reinvestment risk in the yields to maturity of the portfolio. However, in other than a zero coupon portfolio, such as a portfolio of long-term debt instruments that pay semiannual interest payments or whose maturities do not extend far enough into the future to meet expected benefit payments, the assumed discount rates (the yield to maturity) need to incorporate expected reinvestment rates available in the future. Those rates shall be extrapolated from the existing yield curve at the measurement date. The determination of the assumed discount rate is separate from the determination of the expected rate of return on plan assets whenever the actual portfolio differs from the hypothetical portfolio described in this paragraph. Assumed discount rates shall be reevaluated at each measurement date. If the general level of interest rates rises or declines, the assumed discount rates shall change in a similar manner. ##### [715-30-35-45](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-45) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:03.442Z to 2026-09-10T01:00:03.442Z Record version: sha256:e646804304363276333d4d8d1f4df2314cd02c85a17e313f0a9449d4b6b12595 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Interest rates vary depending on the duration of investments; for example, U.S. Treasury bills, 7-year bonds, and 30-year bonds have different interest rates. Thus, the weighted-average discount rate (interest rate) inherent in the prices of annuities (or a dedicated bond portfolio) will vary depending on the length of time remaining until individual benefit payment dates. A plan covering only retired employees would be expected to have significantly different discount rates from one covering a work force of 30-year-olds. The disclosures required by Subtopic 715-20 regarding components of the pension benefit obligation will be more representationally faithful if individual discount rates applicable to various benefit deferral periods are selected. A properly weighted average rate can be used for aggregate computations such as the interest cost component of net pension cost for the period. ##### [715-30-35-46](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-46) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:03.442Z to 2026-09-10T01:00:03.442Z Record version: sha256:6d8f33b02fc78528bfb143a23ad2b3ec6f4107c2db9b77848371284ac8eab214 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An insurance entity deciding on the price of an annuity contract will consider the rates of return available to it for investing the premium received and the rates of return expected to be available to it for reinvestment of future cash flows from the initial investment during the period until benefits are payable. That consideration is indicative of a relationship between rates inherent in the prices of annuity contracts and rates available in investment markets. Therefore, it is appropriate for employers to consider that relationship and information about investment rates in estimating the discount rates required for application of this Subtopic. Thus a current settlement rate best meets that objective and is consistent with measurement of plan assets at fair value for purposes of recognizing as a net asset or a net liability, and disclosing the plan's funded status. Each year the discount rates shall be reevaluated to determine whether they reflect the best estimate of the current effective settlement rates. As established in paragraph [715-30-35-44](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-44), if interest rates generally decline or rise, the assumed discount rates shall change. ##### [715-30-35-47](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-47) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:03.442Z to 2026-09-10T01:00:03.442Z Record version: sha256:a9596a14dd38f4da73238d63c5b9eab1346c42e9bdb90cb1446a8949bcfa6416 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The [expected long-term rate of return on plan assets](https://asc.understandingaccounting.org/glossary/e/#expected-long-term-rate-of-return-on-plan-assets "An assumption about the rate of return on plan assets reflecting the average rate of earnings expected on existing plan assets and expected contributions to the plan during the period.") shall reflect the average rate of earnings expected on the funds invested or to be invested to provide for the benefits included in the projected benefit obligation. In estimating that rate, appropriate consideration shall be given to the returns being earned by the plan assets in the [fund](https://asc.understandingaccounting.org/glossary/f/#fund "Used as a verb, to pay over to a funding agency (as to fund future pension benefits or to fund pension cost). Used as a noun, assets accumulated in the hands of a funding agency for the purpose of meeting pension benefits when they become due.") and the rates of return expected to be available for reinvestment. The expected long-term rate of return on plan assets is used (with the market-related value of assets) to compute the expected return on assets. In the context of its use in this paragraph, funds to be invested refers only to the reinvestment of returns on existing plan assets. ##### [715-30-35-48](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-48) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:03.442Z to 2026-09-10T01:00:03.442Z Record version: sha256:57ab499cbd899695284e0f9d55ebb910c5a08aa2c3093d84ba595a4da7cbcec1 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The expected return on plan assets shall take into consideration the availability of all plan assets for investment throughout the year. Therefore, the amount and timing of pension plan contributions and benefit payments expected to be made during the year shall be considered in determining the expected return on plan assets for that year. For example, if the employer's pension plan contribution for the year is expected to be made two months before the next measurement date, then the expected return on plan assets shall include an amount related to the expected return on that contribution only for those two months. ##### [715-30-35-49](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-49) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:03.442Z to 2026-09-10T01:00:03.442Z Record version: sha256:2907c2650b2f016f893a32b37f5c8c87ab64673ec7f0fae6160c0bb50dd81e5e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. However, the expected return on future years' contributions to a pension plan shall not be considered in determining the expected long-term rate of return on plan assets. The expected long-term rate of return on plan assets shall reflect long-term earnings expectations only on existing plan assets and those contributions expected to be received during the current year. #### Measurement of Plan Assets ##### [715-30-35-50](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-50) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:03.442Z to 2026-09-10T01:00:03.442Z Record version: sha256:eb4c4ff1adeb0ca6ab4696234331597c073128c84a4464e58f06547389381fad Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For purposes of applying the [plan-asset-related](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.") provisions of paragraph [715-30-25-1](https://asc.understandingaccounting.org/asc/715/30/#715-30-25-1) and for purposes of the disclosures required by paragraphs [715-20-50-1](https://asc.understandingaccounting.org/asc/715/20/#715-20-50-1) and [715-20-50-5](https://asc.understandingaccounting.org/asc/715/20/#715-20-50-5), plan investments, whether equity or debt securities, real estate, or other, shall be measured at their fair value as of the measurement date. The fair value of an investment shall be reduced by brokerage commissions and other costs normally incurred in a sale if those costs are significant (similar to fair value less cost to sell). ##### [715-30-35-51](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-51) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:03.442Z to 2026-09-10T01:00:03.442Z Record version: sha256:6755ae23fdab132b874b19ba349c3b443cd4d6fc506cdcc846bc035adc9d2e4e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For purposes of determining the expected return on plan assets and accounting for asset gains and losses pursuant to paragraphs [715-30-35-18 through 35-26](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-18) , a [market-related asset value](https://asc.understandingaccounting.org/glossary/m/#market-related-value-of-plan-assets "A balance used to calculate the expected return on plan assets. The market-related value of plan assets is either fair value or a calculated value that recognizes changes in fair value in a systematic and rational manner over not more than five years. Different ways of calculating market-related value may be used for different classes of assets (for example, an employer might use fair value for bonds and a five-year-moving-average value for equities), but the manner of determining market-related value is required to be applied consistently from year to year for each asset class. For a method to meet the criteria of being systematic and rational, it must reflect only the changes in the fair value of plan assets between various dates.") is used. ##### [715-30-35-52](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-52) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:03.442Z to 2026-09-10T01:00:03.442Z Record version: sha256:46203b7e6e645cda6ba77207e5e281d4b9d7b6694f9d5aeaeac79466e6edd602 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Plan assets used in plan operations (for example, buildings, equipment, furniture and fixtures, and leasehold improvements) shall be measured at cost less accumulated depreciation or amortization for all purposes. #### Annuity and Other Contracts ##### [715-30-35-53](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-53) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:03.442Z to 2026-09-10T01:00:03.442Z Record version: sha256:f37cd897f3dd13b8d653b2c4232a944a8e65e2375182ae9c83c31e35524f3714 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Paragraph [715-30-25-7](https://asc.understandingaccounting.org/asc/715/30/#715-30-25-7) provides that 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](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.") when participating annuity contracts are used (see paragraph [715-30-35-57](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-57)). That is, if all the benefits attributed by the plan's benefit formula to service in the current period are covered by nonparticipating annuity contracts, the cost of the contracts determines the service cost component of net pension cost for that period. Benefits covered by annuity contracts shall be excluded from the projected benefit obligation and the accumulated benefit obligation. Except for participation rights, annuity contracts shall be excluded from plan assets. ##### [715-30-35-54](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-54) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:03.442Z to 2026-09-10T01:00:03.442Z Record version: sha256:2245457764aece4e5a9fda2f3319d546ea36283f3a3cdf495d4ba3a272431506 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If the insurance entity obligated under an annuity contract is a [captive insurer](https://asc.understandingaccounting.org/glossary/c/#captive-insurer "An insurance entity that does business primarily with related entities."), or if there is any reasonable doubt that the insurance entity will meet its obligations under the contract, the contract is not an annuity contract for purposes of this Subsection. ##### [715-30-35-55](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-55) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:03.442Z to 2026-09-10T01:00:03.442Z Record version: sha256:52a1a8d2eb1ce6d9dfd7345408aeb25e042cd7591bc3af30465acbe8d5ab3de2 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Benefits provided by the pension benefit formula beyond benefits provided by annuity contracts (for example, benefits related to future compensation levels) shall be accounted for according to the provisions of this Subtopic applicable to plans not involving insurance contracts. ##### [715-30-35-56](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-56) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:03.442Z to 2026-09-10T01:00:03.442Z Record version: sha256:9fb01dc32fd2dd4ad547ace81b390addb5d1e6dfcdf188bf0e938f0c108b78a0 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Some contracts provide for a refund of premiums if an employee for whom an annuity is purchased does not render sufficient service for the benefit to vest under the terms of the plan. Such a provision shall not by itself preclude a contract from being treated as an annuity contract for purposes of this Subtopic. ##### [715-30-35-57](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-57) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:03.442Z to 2026-09-10T01:00:03.442Z Record version: sha256:e86779c8ad3317e497812ccf9a88383ede2df0136cb14e655e31ec6ca7951b4f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Participating annuity contracts provide that the purchaser (either the plan or the employer) may participate in the experience of the insurance entity. Under those contracts, the insurance entity ordinarily pays dividends to the purchaser, the effect of which is to reduce the cost of the plan. The purchase price of a [participating annuity contract](https://asc.understandingaccounting.org/glossary/p/#participating-annuity-contract "An annuity contract that provides for the purchaser to participate in the investment performance and possibly other experience (for example, mortality experience) of the insurance entity. Under a participating annuity contract, the insurance entity ordinarily pays dividends to the purchaser.") ordinarily is higher than the price of an equivalent contract without participation rights. The difference is the cost of the participation right. ##### [715-30-35-58](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-58) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:03.442Z to 2026-09-10T01:00:03.442Z Record version: sha256:c278ab980e4a4f12a3e75e38c6a9c3cf97ebfa0bf59ad641749688208c821099 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In subsequent periods, the participation right shall be measured at its fair value if the contract is such that fair value is reasonably estimable. Otherwise, the participation right shall be measured at its amortized cost (not in excess of its net realizable value), and the cost shall be amortized systematically over the expected dividend period under the contract. ##### [715-30-35-59](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-59) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:03.442Z to 2026-09-10T01:00:03.442Z Record version: sha256:81632fb4b9d60cd05812833f845aa80b8d64af540946805f5968a38d93107c38 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If the substance of a [participating insurance](https://asc.understandingaccounting.org/glossary/p/#participating-insurance "Insurance in which the policyholder is entitled to participate in the earnings or surplus of the insurance entity. The participation occurs through the distribution of dividends to policyholders.") contract is such that the employer remains subject to all or most of the risks and rewards associated with the benefit obligation covered and the assets transferred to the insurance entity, that contract is not an annuity contract for purposes of this Subtopic. ##### [715-30-35-60](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-60) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:03.442Z to 2026-09-10T01:00:03.442Z Record version: sha256:f7533d837586734361a07463dc18899e2fb1d441faff4f9022818e305e8da145 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Insurance contracts that are in substance equivalent to the purchase of annuities shall be accounted for as such. Other contracts with insurance entities shall be accounted for as investments and measured at fair value. For some contracts, the best available evidence of fair value may be contract value. If a contract has a determinable cash surrender value or conversion value, that is presumed to be its fair value. ##### [715-30-35-61](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-61) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:03.442Z to 2026-09-10T01:00:03.442Z Record version: sha256:cec3afd019748d98a9980f19ab3f1a82fbf1db83879fdb17b074e6f24fc14bf2 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Paragraph [715-30-35-54](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-54) identifies attributes related to the issuers of annuity contracts that preclude accounting for the contracts as annuity contracts. The Settlements, Curtailments, and Certain Termination Benefits Subsections of this Subtopic define attributes related to annuity contracts differently for purposes of accounting for them as annuity contracts. The effect of the difference is that paragraph [715-30-35-85](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-85) excludes from settlement accounting those annuity contracts purchased from an entity that is controlled by the employer, whereas this Subsection excludes from annuity contracts those purchased from a captive insurer. #### Timing of Measurement ##### [715-30-35-62](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-62) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:03.442Z to 2026-09-10T01:00:03.442Z Record version: sha256:46093a990975b0f73f40f6eaa3082c6b4d9ec58c81598ebf559bb00ffb63527e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The measurements of plan assets and benefit obligations required by this Subtopic shall be as of the date of the employer's fiscal year-end statement of financial position except in both of the following cases: 1. a The plan is sponsored by a subsidiary that is consolidated using a fiscal period that differs from its parent's, as permitted by paragraph [810-10-45-12](https://asc.understandingaccounting.org/asc/810/10/#810-10-45-12). 2. b The plan is sponsored by an investee that is accounted for using the equity method of accounting under paragraph [323-10-35-6](https://asc.understandingaccounting.org/asc/323/10/#323-10-35-6), using financial statements of the investee for a fiscal period that is different from the investor's, as permitted by that Subtopic. ##### [715-30-35-63](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-63) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:03.442Z to 2026-09-10T01:00:03.442Z Record version: sha256:f4789191da946fd1206efba8a47f909a4bb7d43fa71451d44c3d529966467805 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If the exceptions in the preceding paragraph apply, the employer shall measure the subsidiary's plan assets and benefit obligations as of the date used to consolidate the subsidiary's statement of financial position and shall measure the investee's plan assets and benefit obligations as of the date of the investee's financial statements used to apply the equity method. For example, if a calendar year-end parent consolidates a subsidiary using the subsidiary's September 30 financial statements, the funded status of the subsidiary's benefit plan included in the consolidated financial statements shall be measured as of September 30. ##### [715-30-35-63A](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-63A) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:03.442Z to 2026-09-10T01:00:03.442Z Record version: sha256:71454be469a3ffc2ee6a7296990b963cec63d203e551c445d19ca0fac4969279 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If an employer's fiscal year-end does not coincide with a month-end, the employer may measure plan assets and benefit obligations using the month-end that is closest to the employer's fiscal year-end. That election shall be applied consistently from year to year. The election shall be applied consistently to all of its defined benefit plans if an employer has more than one defined benefit plan. ##### [715-30-35-63B](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-63B) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:03.442Z to 2026-09-10T01:00:03.442Z Record version: sha256:dd49879692452b76ae73230fd9f1c9ea0b440588e6fe13701a5c4d136d900b45 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If an employer measures plan assets and benefit obligations in accordance with paragraph [715-30-35-63A](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-63A) and a contribution or significant event caused by the employer (such as a plan amendment, settlement, or curtailment that calls for a remeasurement) occurs between the month-end date used to measure plan assets and benefit obligations and the employer's fiscal year-end, the employer shall adjust the fair value of plan assets and the actuarial present value of benefit obligations so that those contributions or significant events are recognized in the period in which they occurred. An employer shall not adjust the fair value of plan assets and the actuarial present value of benefit obligations for other events occurring between the month-end date used to measure plan assets and benefit obligations and the employer's fiscal year-end that may be significant to the measurement of defined benefit plan assets and obligations, but are not caused by the employer (for example, changes in market prices or interest rates). ##### [715-30-35-64](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-64) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:03.442Z to 2026-09-10T01:00:03.442Z Record version: sha256:b484755685efbd0a93ad4ccaf9ec5472bacf06e7464f20dcb37e44bbc5f2beb0 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Requiring that the pension measurements be as of a particular date is not intended to require that all procedures be performed after that date. As with other financial statement items requiring estimates, much of the information can be prepared as of an earlier date and projected forward to account for subsequent events (for example, employee service). ##### [715-30-35-65](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-65) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:03.442Z to 2026-09-10T01:00:03.442Z Record version: sha256:10749e937bd273ef101d123780b29e9db794f8a9e68f8566a659952d0dc74937 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Unless an entity remeasures both its plan assets and benefit obligations during the fiscal year, the funded status it reports in its interim-period statement of financial position shall be the same asset or liability recognized in the previous year-end statement of financial position adjusted for both of the following: 1. a Subsequent accruals of net periodic pension cost that exclude the amortization of amounts previously recognized in other comprehensive income (for example, subsequent accruals of service cost, interest cost, and return on plan assets) 2. b Contributions to a funded plan, or benefit payments. ##### [715-30-35-66](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-66) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:03.442Z to 2026-09-10T01:00:03.442Z Record version: sha256:9677cf7ddba40f6c4840bb2900c1e12f9670236ee90bb57dbf22fdfad76dd93f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Paragraph [715-30-25-5](https://asc.understandingaccounting.org/asc/715/30/#715-30-25-5) notes that, sometimes, an entity remeasures both plan assets and benefit obligations during the fiscal year, for example, when a significant event such as a plan amendment, settlement, or curtailment occurs that calls for a remeasurement. ##### [715-30-35-66A](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-66A) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:03.442Z to 2026-09-10T01:00:03.442Z Record version: sha256:89bbdccdf969746c6d4b7007d553daa4f6dcc5fa39a1fdf2af72280a0264a8fb Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If a significant event caused by the employer (such as a plan amendment, settlement, or curtailment) that requires an employer to remeasure both plan assets and benefit obligations does not coincide with a month-end, the employer may remeasure plan assets and benefit obligations using the month-end that is closest to the date of the significant event. ##### [715-30-35-66B](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-66B) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:03.442Z to 2026-09-10T01:00:03.442Z Record version: sha256:6362d1bf2197ed371f2e9a436fd4375cab8213f0bb977af922fd1f59579f36ee Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If an employer remeasures plan assets and benefit obligations during the fiscal year in accordance with paragraph [715-30-35-66A](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-66A), the employer shall adjust the fair value of plan assets and the actuarial present value of benefit obligations for any effects of the significant event that may or may not be captured in the month-end measurement (for example, if the closest month-end is before the date of a partial settlement, then the measurement of plan assets may include assets that are no longer part of the plan). An employer shall not adjust the fair value of plan assets and the actuarial present value of benefit obligations for other events occurring between the month-end date used to measure plan assets and benefit obligations and the employer's fiscal year-end that may be significant to the measurement of defined benefit plan assets and obligations, but are not caused by the employer (for example, changes in market prices or interest rates). ##### [715-30-35-67](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-67) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:03.442Z to 2026-09-10T01:00:03.442Z Record version: sha256:15c814d43a76a02b9141d39ba38bf369549390df08dfc337dd14c0c312a6050f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. As required by paragraph [715-30-25-5](https://asc.understandingaccounting.org/asc/715/30/#715-30-25-5), upon remeasurement, an 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. ##### [715-30-35-68](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-68) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:03.442Z to 2026-09-10T01:00:03.442Z Record version: sha256:026fb0ec484a9e20f290db214063aa0ab96f29130955224f3b2d59c9bbbd2fd7 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Measurements of net periodic pension cost for both interim and annual financial statements shall be based on the assumptions used for the previous year-end measurements unless more recent measurements of both plan assets and obligations are available or a significant event occurs, such as a plan amendment, that would ordinarily call for such measurements. #### Employers with Two or More Plans ##### [715-30-35-69](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-69) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:03.442Z to 2026-09-10T01:00:03.442Z Record version: sha256:59f7cb6a7536c156d88fe0c0be82e93eeedad39de19a92cc8c5f775e0ffee095 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Net periodic pension cost, liabilities, and assets are determined on a plan-by-plan basis. Paragraph [715-30-25-6](https://asc.understandingaccounting.org/asc/715/30/#715-30-25-6) requires that an employer that sponsors two or more separate defined benefit pension plans determine net periodic pension cost, liabilities, and assets by separately applying the provisions of this Subtopic to each plan. #### Multiple-Employer Plans ##### [715-30-35-70](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-70) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:03.442Z to 2026-09-10T01:00:03.442Z Record version: sha256:274bb8f374412e89b00609e4579163a2237b98daeb793441b23a3eb5059b3d5a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Some pension plans to which two or more unrelated employers contribute are not multiemployer plans. Rather, they are in substance aggregations of [single-employer plans](https://asc.understandingaccounting.org/glossary/s/#single-employer-plan "A pension plan or other postretirement benefit plan that is maintained by one employer. The term also may be used to describe a plan that is maintained by related parties such as a parent and its subsidiaries.") combined to allow participating employers to pool their assets for investment purposes and to reduce the costs of plan administration. Those [multiple-employer plans](https://asc.understandingaccounting.org/glossary/m/#multiple-employer-plan "A pension plan or other postretirement benefit plan maintained by more than one employer but not treated as a multiemployer plan. Multiple-employer plans are generally not collectively bargained and are intended to allow participating employers, commonly in the same industry, to pool their plan assets for investment purposes and to reduce the cost of plan administration. A multiple-employer plan maintains separate accounts for each employer so that contributions provide benefits only for employees of the contributing employer. Multiple-employer plans may have features that allow participating employers to have different benefit formulas, with the employer's contributions to the plan based on the benefit formula selected by the employer.") ordinarily do not involve collective-bargaining agreements. They may also have features that allow participating employers to have different benefit formulas, with the employer's contributions to the plan based on the benefit formula selected by the employer. Such plans shall be considered single-employer plans rather than multiemployer plans for purposes of this Subtopic, and each employer's accounting shall be based on its respective interest in the plan. #### Cash Balance Plans ##### [715-30-35-71](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-71) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:03.442Z to 2026-09-10T01:00:03.442Z Record version: sha256:875fd96252fd8e7d76efda7ea51df577e5cd27065ab24e2a8932e4d660d9071e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2020-10](https://asc.understandingaccounting.org/updates/asu-2020-10/) ##### [715-30-35-72](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-72) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:03.442Z to 2026-09-10T01:00:03.442Z Record version: sha256:d382741e4badc7b5a09f86aeb0d84cae8bdbc6e47ad2554ea1c9392f58a16a68 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2020-10](https://asc.understandingaccounting.org/updates/asu-2020-10/) #### Transfer of Excess Pension Assets to a Retiree Health Care Benefits Account ##### [715-30-35-73](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-73) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:03.442Z to 2026-09-10T01:00:03.442Z Record version: sha256:501e797b9614edf8cf93c3d41b7a4764035821fbb859d3a99693043a6b2c9982 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The transfer of excess pension assets to a retiree health care account or plan (whether or not the transfer of assets is made pursuant to applicable laws or regulations) shall be recognized as a negative contribution to (withdrawal of funds from) the pension plan and a positive contribution to the retiree health care plan. No gain or loss arises from the transfer of the excess pension assets. ### Settlements, Curtailments, and Certain Termination Benefits #### Relationship of Settlements and Curtailments to Other Events ##### [715-30-35-74](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-74) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:03.442Z to 2026-09-10T01:00:03.442Z Record version: sha256:00a25c2d9ef5fdaf45706c1665cba8a3375149b305b314181a91c6346cc89880 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A [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.") and a [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.") may occur separately or together. ##### [715-30-35-75](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-75) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:03.442Z to 2026-09-10T01:00:03.442Z Record version: sha256:99298e2deb5245c174fcea308dbe3846e466214745e82f3268d59dd6bc1ea0ed Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subsection does not establish a proper sequence of events to follow in measuring the effects of a settlement and a curtailment that are to be recognized at the same time. Although the sequence selected can affect the determination of the aggregate [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.") recognized, the selection of the event to be measured first (settlement or curtailment) is an arbitrary decision and neither order is demonstrably superior to the other. However, an employer shall consistently apply the same sequence of events in determining the effects of all settlements and curtailments that are to be recognized at the same time. ##### [715-30-35-76](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-76) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:03.442Z to 2026-09-10T01:00:03.442Z Record version: sha256:685f16449a153a3b8f23a1a8d2fa2f9a639d36a05c6a4467d910656c6151181b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If [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.") to be accumulated in future periods are reduced (for example, because half of a work force is dismissed or a plant is closed) but the plan remains in existence and continues to pay benefits, to invest assets, and to receive contributions, a curtailment has occurred but not a settlement. ##### [715-30-35-77](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-77) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:03.442Z to 2026-09-10T01:00:03.442Z Record version: sha256:9357a2d0ce3e30927d30aff9a502f675f5883a603076e2fb234572f85ed06bea Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If an employer purchases nonparticipating annuity contracts for [vested benefits](https://asc.understandingaccounting.org/glossary/v/#vested-benefits "Benefits for which the employee's right to receive a present or future pension benefit is no longer contingent on remaining in the service of the employer. (Other conditions, such as inadequacy of the pension fund, may prevent the employee from receiving the vested benefit.) Under graded vesting, the initial vested right may be to receive in the future a stated percentage of a pension based on the number of years of accumulated credited service; thereafter, the percentage may increase with the number of years of service or of age until the right to receive the entire benefit has vested.") and continues to provide defined benefits for future [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."), either in the same plan or in a successor plan, a settlement has occurred but not a curtailment. ##### [715-30-35-78](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-78) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:03.442Z to 2026-09-10T01:00:03.442Z Record version: sha256:45330aa94f42951c1cbddd12df121da6eac1a4278810d1775ec22ca36f1a38c6 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If a plan is terminated (that is, the obligation is settled and the plan ceases to exist) and not replaced by a successor defined benefit plan, both a settlement and a curtailment have occurred (whether or not the employees continue to work for the employer). See Example 1 (paragraph [715-30-55-198](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-198)) for an illustration of this situation. #### Settlements ##### [715-30-35-79](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-79) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:03.442Z to 2026-09-10T01:00:03.442Z Record version: sha256:dbeb107bc30d536744592b966350d77b83f76f6e7225355bf073b6433a54eb22 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The maximum gain or loss subject to recognition in earnings when a pension obligation is settled is the net gain or loss remaining in accumulated other comprehensive income plus any transition asset remaining in accumulated other comprehensive income from initial application of this Subtopic. That maximum amount includes any gain or [loss](https://asc.understandingaccounting.org/glossary/l/#loss "See Gain or Loss.") first measured at the time of settlement. The maximum amount shall be recognized in earnings if the entire [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).") is settled. If only part of the projected benefit obligation is settled, the employer shall recognize in earnings a pro rata portion of the maximum amount equal to the percentage reduction in the projected benefit obligation. If the purchase of a [participating annuity contract](https://asc.understandingaccounting.org/glossary/p/#participating-annuity-contract "An annuity contract that provides for the purchaser to participate in the investment performance and possibly other experience (for example, mortality experience) of the insurance entity. Under a participating annuity contract, the insurance entity ordinarily pays dividends to the purchaser.") constitutes a settlement under the guidance in paragraphs [715-30-35-85 through 35-89](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-85) , the maximum gain (but not the maximum loss) shall be reduced by the cost of the [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.") before determining the amount to be recognized in earnings. ##### [715-30-35-80](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-80) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:03.442Z to 2026-09-10T01:00:03.442Z Record version: sha256:6bedda7857fbc63565a3e135dbd0ec3fc17a924e498bd6544396f54cd36ed02e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See Example 2 (paragraph [715-30-55-202](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-202)) for illustrations of the settlement related guidance presented in this Subsection. ##### [715-30-35-81](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-81) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:03.442Z to 2026-09-10T01:00:03.442Z Record version: sha256:00d44bfb10c6e8a0a399b7fa7775014f497d0205fbe0da9373adf06fcef04b7c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [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.") and the projected benefit obligation shall be measured as of the date the settlement occurs (that is, as of the date that the criteria for a settlement are met and settlement accounting becomes appropriate) to determine the maximum gain or loss subject to pro rata recognition in earnings and the percentage reduction in the projected benefit obligation. The effects of a settlement can be reliably measured only if based on measures of plan assets and the projected benefit obligation as of the date of the settlement because intervening events (such as investment gains or losses, or gains or losses from changes in interest rates) after a prior measurement date could change the relevant amounts. ##### [715-30-35-82](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-82) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:03.442Z to 2026-09-10T01:00:03.442Z Record version: sha256:157c3762671e4ac23d87964b6a9c3623676c37b1b070f0d9b57c274ac358af58 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Recognition in earnings of gains or losses from settlements is required if the cost of all settlements during a year is greater than the sum of the service cost and interest cost 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.") for the pension plan for the year. However, if the cost of all settlements in a year is less than or equal to the sum of the service cost and interest cost components of net periodic pension cost for the plan for the year, gain or loss recognition in earnings is permitted but not required for those settlements. The accounting policy adopted for recognition in earnings of gains or losses from settlements shall be applied consistently from year to year. ##### [715-30-35-83](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-83) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:03.442Z to 2026-09-10T01:00:03.442Z Record version: sha256:a15cad444d1a252e6c04a977004178d5acd2fe52ccf4f1faaea411054e422e4d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The cost of a settlement is determined as follows for each of the different settlement types: 1. a For a cash settlement, the amount of cash paid to employees 2. b For a settlement using nonparticipating annuity contracts, the cost of the contracts 3. c For a settlement using participating annuity contracts, the cost of the contracts less the amount attributed to participation rights. See paragraph [715-30-35-57](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-57). ##### [715-30-35-84](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-84) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:03.442Z to 2026-09-10T01:00:03.442Z Record version: sha256:99ea69c6da8dbe176ef656e505b99d4e57f3de5407b5edb44e9f429fa2c908e3 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The intent of the guidance in this Subsection is that if the substance of an insurance contract is such that the employer remains subject to all or most of the risks and rewards associated with the covered pension benefit obligation or the assets transferred to the insurance entity, the purchase of the contract does not constitute a settlement. The circumstances under which an employer shall recognize in earnings the net gain or loss included in accumulated other comprehensive income are limited and such recognition shall not occur if the settlement transaction is between an employer and an entity that it controls because such a transaction merely shifts the risks from one part of the entity to another part of the same entity. ##### [715-30-35-85](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-85) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:03.442Z to 2026-09-10T01:00:03.442Z Record version: sha256:2e15bf38c03ca114dab109a06d4b32d42bbb8021b06aad2ab51d0494c98bf026 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Annuity contracts](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.") purchased from an entity that is controlled by the employer are excluded from settlement accounting. Therefore, an employer that purchases annuity contracts from an insurance entity that it controls shall not recognize any settlement gain or loss associated with the transaction (that is, the transaction does not qualify for settlement accounting). ##### [715-30-35-86](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-86) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:03.442Z to 2026-09-10T01:00:03.442Z Record version: sha256:704b01a73688b6faa2cb0d29e0582a63e8002a432b0ebbcb2940ff8f405ff5d8 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If there is any reasonable doubt that the insurance entity will meet its obligations under the annuity contract, the purchase of the contract does not constitute a settlement. ##### [715-30-35-87](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-87) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:03.442Z to 2026-09-10T01:00:03.442Z Record version: sha256:e67cfb820c7dd222953ee7996e4f1ceb39e95998332c13304306266d08530792 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If the substance of a [participating annuity contract](https://asc.understandingaccounting.org/glossary/p/#participating-annuity-contract "An annuity contract that provides for the purchaser to participate in the investment performance and possibly other experience (for example, mortality experience) of the insurance entity. Under a participating annuity contract, the insurance entity ordinarily pays dividends to the purchaser.") is such that the employer remains subject to all or most of the risks and rewards associated with the benefit obligation covered or the assets transferred to the insurance entity, the purchase of the contract does not constitute a settlement. ##### [715-30-35-88](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-88) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:03.442Z to 2026-09-10T01:00:03.442Z Record version: sha256:c7c41ec636fb34bf6af79b761aa08f70c74578d0039d3280015577b61c687bcf Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. It may be difficult to determine the extent to which a participating annuity contract exposes the purchaser to the risk of unfavorable experience, which would be reflected in lower than expected future dividends. Additionally, under some annuity contracts described as participating, the purchaser might remain subject to all or most of the same risks and rewards related to future experience that would have existed had the contract not been purchased. Some [participating insurance](https://asc.understandingaccounting.org/glossary/p/#participating-insurance "Insurance in which the policyholder is entitled to participate in the earnings or surplus of the insurance entity. The participation occurs through the distribution of dividends to policyholders.") contracts may require or permit payment of additional premiums if experience is unfavorable. Accordingly, if a participating insurance contract requires or permits payment of additional premiums because of experience losses, or if the substance of the contract is such that the purchaser retains all or most of the related risks and rewards, the purchase of that contract does not constitute a settlement. ##### [715-30-35-89](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-89) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:03.442Z to 2026-09-10T01:00:03.442Z Record version: sha256:a1d1cf609588d0183a121331c1fcaae1796c621d0d5b48a14c87f10dd6195692 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An employer may decide to make up a deficiency in annuity contract payments following a settlement and subsequent insolvency by the insurance entity. The following guidance addresses how the employer shall account for the cost of making up the deficiency in annuity payments to the retirees. ##### [715-30-35-90](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-90) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:03.442Z to 2026-09-10T01:00:03.442Z Record version: sha256:8b41f087c453f36b7144fcd6e01fbbbf0b6bc6a2f3177da1e5ac87aab8b5f183 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following circumstances identify the fact pattern to which the required accounting would apply. An employer sponsors 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.)"). The employer settles its pension obligation through the purchase of insurance annuity contracts from an insurance entity. The employer may or may not terminate the defined benefit pension plan. The employer appropriately applies the guidance in this Subsection. Subsequently, the insurance entity becomes insolvent and is unable to meet all of its obligations under the annuity contracts. The employer decides to make up some portion or all of any deficiency in annuity payments to the retirees. ##### [715-30-35-91](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-91) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:03.442Z to 2026-09-10T01:00:03.442Z Record version: sha256:91edc3c46a737f5c836a6718f3f88ef7b6f0ee51a305cba936ec3f332314a9a2 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The employer shall recognize a loss in the circumstances described in the preceding paragraph at the time the deficiency is assumed by the employer if any gain was recognized on the original settlement. The loss recognized would be the lesser of any gain recognized on the original settlement or the amount of the benefit obligation assumed by the employer. The excess of the obligation assumed by the employer over the loss recognized shall be accounted for as a [plan amendment](https://asc.understandingaccounting.org/glossary/p/#plan-amendment "A change in the existing terms of a plan or the initiation of a new plan. A plan amendment may increase benefits (a positive plan amendment), or reduce or eliminate benefits (a negative plan amendment), including those benefits attributed to years of service already rendered.") or plan initiation in accordance with paragraphs [715-30-35-10 through 35-17](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-10) . Subsequent accounting shall be in accordance with the provisions of this Subtopic. #### Curtailments ##### [715-30-35-92](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-92) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:03.442Z to 2026-09-10T01:00:03.442Z Record version: sha256:e3ed9aeae8517d7ec40533c09a85a28e3ef4ada454406f8531d504eeca784ee6 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The [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.") included in accumulated other comprehensive income associated with years of service no longer expected to be rendered as the result of a [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.") is a loss. For example, if a curtailment eliminates half of the estimated remaining future years of service of those who were employed at the date of a prior plan amendment and were expected to receive benefits under the plan, then the loss associated with the curtailment is half of the prior service cost included in accumulated other comprehensive income related to that amendment that has not been amortized as a component of net periodic pension cost. For purposes of applying the provisions of this paragraph, prior service cost includes the cost of retroactive plan amendments (see paragraphs [715-30-35-10 through 35-11](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-10) ) and any transition obligation remaining in accumulated other comprehensive income from initial application of this Subtopic. The calculation of prior service cost associated with services of terminated employees is illustrated in Example 3 (see paragraph [715-30-55-212](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-212)). ##### [715-30-35-93](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-93) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:03.442Z to 2026-09-10T01:00:03.442Z Record version: sha256:c690bdcfd42ddc0d4012f2bda77c373b05c7f9148978ca73f4bfbac1175117cd Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The projected benefit obligation, exclusive of increases that reflect termination benefits that are excluded from the scope of this paragraph (see paragraphs [715-30-25-9 through 25-13](https://asc.understandingaccounting.org/asc/715/30/#715-30-25-9) ), may be decreased (a gain) or increased (a loss) by a curtailment. To the extent that such a gain exceeds any net loss included in accumulated other comprehensive income (or the entire gain, if a net gain exists), it is a curtailment gain. To the extent that such a loss exceeds any net gain included in accumulated other comprehensive income (or the entire loss, if a net loss exists), it is a curtailment loss. For purposes of applying the provisions of this paragraph, any transition asset remaining in accumulated other comprehensive income from initial application of this Subtopic shall be treated as a net gain and shall be combined with the net gain or loss arising thereafter. See Example 4 (paragraph [715-30-55-216](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-216)) for an illustration of a curtailment if there is a remaining transition asset included in accumulated other comprehensive income. ##### [715-30-35-94](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-94) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:03.442Z to 2026-09-10T01:00:03.442Z Record version: sha256:b3e2ce1a9d17e257c1a922dbc5d5ea1a0b9b35a377c63b53f6c78bcf06024945 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If the sum of the effects identified in the preceding two paragraphs is a net loss, it shall be recognized in earnings when it is probable that a curtailment will occur and the effects described are reasonably estimable. If the sum of those effects is a net gain, it shall be recognized in earnings when the related employees terminate or the [plan suspension](https://asc.understandingaccounting.org/glossary/p/#plan-suspension "An event in which the pension plan is frozen and no further benefits accrue. Future service may continue to be the basis for vesting of nonvested benefits existing at the date of suspension. The plan may still hold assets, pay benefits already accrued, and receive additional employer contributions for any unfunded benefits. Employees may or may not continue working for the employer.") or amendment is adopted. ##### [715-30-35-95](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-95) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:03.442Z to 2026-09-10T01:00:03.442Z Record version: sha256:19649db60f857d53c39d9a63a39caeb5bd2574d2acbd726c053a9d83aa09b389 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If a situation also involves termination benefits, the change in the projected benefit obligation due to the curtailment is the difference between the projected benefit obligation for the respective employees before their acceptance of the offer of termination benefits and the projected benefit obligation determined for those employees by applying the normal pension plan formula and assuming no future service because of their termination. See Examples 5 through 6 (paragraphs [715-30-55-222 through 55-230](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-222) ) for an illustration of this guidance. ##### [715-30-35-96](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-96) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:03.442Z to 2026-09-10T01:00:03.442Z Record version: sha256:d9515990ee956e760ab4d00810e1c712dacabdda85b72ed7b92c62401ef91f89 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See also Example 7 (paragraph [715-30-55-231](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-231)) for more illustrations of the curtailment-related guidance presented in this Subsection. Source downloaded (UTC): 2026-09-10T01:00:07.182Z to 2026-09-10T01:00:07.182Z Record version: sha256:99e5cab3cd42f86168f518261beedd00ef7559369241320ca4ca4e8505b0392d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 715-30-45: 45 Other Presentation Matters [Read section](https://asc.understandingaccounting.org/asc/715/30/#45-other-presentation-matters) SEC content: no ##### [715-30-45-1](https://asc.understandingaccounting.org/asc/715/30/#715-30-45-1) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:07.182Z to 2026-09-10T01:00:07.182Z Record version: sha256:45e492bfd0613468b1ea5e2cbe5040ca529d6bcd181eb99d19ad4e138ec9ffe0 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See paragraph [715-30-25-4](https://asc.understandingaccounting.org/asc/715/30/#715-30-25-4) for guidance on reporting changes in a plan's funded status and the effect of certain [amortization](https://asc.understandingaccounting.org/glossary/a/#amortization "The process of reducing a recognized liability systematically by recognizing gains or by reducing a recognized asset systematically by recognizing losses. In accounting for pension benefits or other postretirement benefits, amortization also means the systematic recognition in net periodic pension cost or other postretirement benefit cost over several periods of amounts previously recognized in other comprehensive income, that is, gains or losses, prior service cost or credits, and any transition obligation or asset.") 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.") in other comprehensive income. Source downloaded (UTC): 2026-09-10T01:00:09.560Z to 2026-09-10T01:00:09.560Z Record version: sha256:040081ac80b363b281e831c04a52dc0a0b41d25702695f259b649e1d4b66c54a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 715-30-50: 50 Disclosure [Read section](https://asc.understandingaccounting.org/asc/715/30/#50-disclosure) SEC content: no ##### [715-30-50-1](https://asc.understandingaccounting.org/asc/715/30/#715-30-50-1) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:09.560Z to 2026-09-10T01:00:09.560Z Record version: sha256:020ca6cc6381f328942306d41174e85ee5ee7fd88639fb5937becaaa7c8a08f2 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See Section 715-20-50 for disclosure requirements applicable to matters in the scope of this Subtopic. ### Settlements, Curtailments, and Certain Termination Benefits ##### [715-30-50-2](https://asc.understandingaccounting.org/asc/715/30/#715-30-50-2) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:09.560Z to 2026-09-10T01:00:09.560Z Record version: sha256:65956c059857022c78824a578a4bba99fa4654269b950140b896947657cd3609 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See Section 715-20-50 for disclosure requirements applicable to matters in the scope of this Subtopic. Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:cac4fc1378e8db87314f8a80ea70960921d3741a26f2f54de4578355d2ad9c73 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 715-30-55: 55 Implementation Guidance and Illustrations [Read section](https://asc.understandingaccounting.org/asc/715/30/#55-implementation-guidance-and-illustrations) SEC content: no ##### [715-30-55-1](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-1) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:3e2f2d2c1678e8c5a4b5d694025605aa87a09b978bbcc7848964682f0b13e9cc Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subsection is an integral part of the requirements of this Subtopic. This Subsection provides additional guidance and illustrations that address the application of accounting requirements to specific aspects of accounting for matters related to defined benefit pension plans. The guidance and illustrations that follow may be based on provisions of law that are subject to change. These assumptions about the law are for illustrative purposes only. #### Implementation Guidance ##### [715-30-55-2](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-2) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:37fd3e3f63319ed8af75bcd74a9b8e191cef38f3285c7a84e110664ae1f689a2 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This implementation guidance is organized into the following categories: 1. a Net periodic pension cost 2. b Attribution 3. c Substantive commitment 4. d Assumptions 5. e Selection of discount rates 6. f Plan assets 7. g Insurance contracts 8. h Amounts included in accumulated other comprehensive income 9. i Timing of measurements 10. j Multiemployer, multiple-employer, and single-employer plans 11. k Pension arrangements outside the United States 12. l Combining and dividing plans. ##### [715-30-55-3](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-3) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:82a5e7213939ea28ff8d39a5c19ac2fbedc5020bba060a3531afa726437e26ee Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Paragraph [715-30-35-4](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-4) provides that [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.") is an aggregation of various pension cost components, some of which are expenses or losses (which increase net periodic pension cost) and some of which are revenues or gains (which decrease net periodic pension cost). It is possible for the revenue or gain components to exceed the expense or [loss](https://asc.understandingaccounting.org/glossary/l/#loss "See Gain or Loss.") components, resulting in net periodic pension income. For example, a pension plan may have an [expected return on plan assets](https://asc.understandingaccounting.org/glossary/e/#expected-return-on-plan-assets "An amount calculated as a basis for determining the extent of delayed recognition of the effects of changes in the fair value of plan assets. The expected return on plan assets is determined based on the expected long-term rate of return on plan assets and the market-related value of plan assets.") or [amortization](https://asc.understandingaccounting.org/glossary/a/#amortization "The process of reducing a recognized liability systematically by recognizing gains or by reducing a recognized asset systematically by recognizing losses. In accounting for pension benefits or other postretirement benefits, amortization also means the systematic recognition in net periodic pension cost or other postretirement benefit cost over several periods of amounts previously recognized in other comprehensive income, that is, gains or losses, prior service cost or credits, and any transition obligation or asset.") of a transition asset remaining in accumulated other comprehensive income that exceeds the other net periodic pension cost components. ##### [715-30-55-4](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-4) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:599b1b43b3393f2bfdbe837a60fc0a317458958752f5fbe0874e099c22fa1fac Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An employer sponsoring a pension plan that is overfunded may have net periodic pension cost that is a net credit (that is, net periodic pension income) and the employer may make no contribution to the pension plan because it cannot currently deduct that amount for tax purposes. In this situation, the difference between net periodic pension income and the tax-deductible amount is a temporary difference as discussed in paragraphs [740-10-25-18 through 25-20](https://asc.understandingaccounting.org/asc/740/10/#740-10-25-18) . The difference between net periodic pension income and the tax-deductible amount represents the origination or reversal of a portion of the overall temporary difference related to a pension plan for which deferred taxes should be provided. Ultimately, the employer's cost of providing [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 employees equals the net amount funded, which is equal to the total [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.") paid less earnings on plan assets. Thus, cumulative pension cost for accounting purposes will equal the cumulative amount recognized for tax purposes. ##### [715-30-55-5](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-5) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:b7d1e11924143591e0a099697433c444f544101c306dc6f834e81dccea976771 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The overall temporary difference discussed in the preceding paragraph will reverse in one of two ways. First, at some future time the pension plan may not be so overfunded because of poor investment performance or because of increases in the obligation due to a decline in interest rates, additional pension benefits earned for future 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."), or amendments to the pension plan that increase pension benefits. In this case, net periodic pension cost for future years would eventually exceed amounts funded in those years. Second, if the pension plan remains overfunded and continually generates investment returns in excess of increases in the pension obligation, the employer may terminate the pension plan to recapture excess assets. In this case, the gain for accounting purposes from the pension [plan termination](https://asc.understandingaccounting.org/glossary/p/#plan-termination "An event in which the pension plan or postretirement benefit plan ceases to exist and all benefits are settled by the purchase of insurance contracts (for example, annuities) or by other means. The plan may or may not be replaced by another plan. A plan termination with a replacement plan may or may not be in substance a plan termination for accounting purposes.") would be less than the taxable amount resulting from that event. Although the reversal of the temporary difference may be far in the future and may be somewhat under the employer's control, there is a temporary difference for which deferred taxes should be provided. ##### [715-30-55-6](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-6) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:a1faf77d70cf6790339821501d0c7bdfb23f724591a2d0da3a208b961cd57e67 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An employer may withdraw excess plan assets (cash) from a pension plan, not be required to settle a pension benefit obligation as part of an asset reversion transaction, and, as provided for in paragraph [715-30-55-145](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-145), no 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.") included in accumulated other comprehensive income would be immediately recognized in earnings. However, the withdrawal of excess plan assets shall be recorded as a negative contribution. That is, the employer shall record a debit to cash and a credit to the net pension asset or liability, as appropriate. ##### [715-30-55-7](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-7) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:4f95d154add09742e91204d417c7a5711633b58ccb625bfd88148dec359e0d0d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following attribution-related implementation guidance illustrates the application of the guidance in paragraph [715-30-35-36](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-36) that establishes that pension benefits ordinarily shall be attributed to periods of employee service based on the [plan's benefit formula](https://asc.understandingaccounting.org/glossary/p/#plan-s-benefit-formula "See Pension Benefit Formula.") to the extent that the formula states or implies an [attribution](https://asc.understandingaccounting.org/glossary/a/#attribution "The process of assigning pension or other postretirement benefits or costs to periods of employee service."). ##### [715-30-55-8](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-8) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:8f6544c09d4ce357f3bf6e189b803b1abdea4b287a87d3342d20b09f8a9a1c03 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Under the paragraph [715-30-35-36](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-36) guidance, if a pension plan's formula provides an annual pension benefit equal to 1 percent of each year's salary (that is, it does not base pension benefits for the current year on any future salary level), the projected unit credit method should be used to attribute the service cost component of net periodic pension cost over employees' service periods because a pension plan that describes the pension benefits earned as 1 percent of current pay for each year of service is the same as a pension plan that describes the pension benefits earned as 1 percent of total career pay. Both are, in effect, a career-average-pay pension plan. Because similar pension benefits could be provided by a final-pay pension plan that includes almost the entire service period (for example, service period minus the first year) in determining the average final pay on which pension benefits are based, the line between career-average-pay and final-pay pension plans would need to be an arbitrary one if the two types of formulas were to be treated differently. ##### [715-30-55-9](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-9) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:00e34a93ff8599c06173b47bdfe5758c78059b53ba19cf5bbd59d3591ce6bb68 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A career-average-pay pension plan may have a formula that provides pension benefits equal to 1 percent of each year's salary for that year's service with, for example, prospective (flat-benefit) plan amendments granted every 3 years as part of union negotiations (for example, a negotiated increase may provide that additional benefits of $360 per year are earned for each of the following 3 years of service). In such a plan, the projected unit credit method should not be used for both the career-average-pay and the flat-benefit portions of the pension benefits provided under the pension plan. Rather, the projected unit credit method should be used to attribute the career-average-pay portion of the pension benefits over employees' service periods, and the unit credit method should be used for the flat-benefit portion for the limited service period, which, in this example, is three years. ##### [715-30-55-10](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-10) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:644c0e2e5ea053d6f67bb8feb2f29a12b4c66c52139b6b8dc5430eb6f0bc34ff Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In a pension plan that provides a pension benefit of 1 percent of final pay for each year of service up to a maximum of 20 years of service with, for example, final pay frozen at the 20th year, the employer should not attribute the total projected benefits under the pension plan for an employee over the employee's expected service period even if that service period is anticipated to exceed the 20-year limitation. Although total projected benefits ordinarily should be attributed to years of service based on the pension plan's formula, paragraph [715-30-35-38](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-38) explains that some pension plans have formulas that attribute a disproportionate share of those pension benefits to later years of service and requires attribution of those pension benefits ratably over the service period (which would be faster than the pension plan formula). However, no basis exists for attribution of pension benefits to years of service more slowly than the pension plan's formula. In this example, the service cost component of net periodic pension cost for the employee should be zero after Year 20. However, interest cost should continue to accrue on 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)."). If the pension plan's formula in this example provided a pension benefit of 1 percent of final pay for each year of service up to a maximum of 20 years of service and final pay is not frozen at the 20th year, the result is the same except that gains or losses will occur after the 20-year period if experience is different from that assumed regarding the final level of compensation. ##### [715-30-55-11](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-11) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:96fa4a396e21d6dd919c74e23c90bc5150781494ded1ea81c38d10a5d33b33eb Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A pension plan may have more than one formula with an employee's pension benefits determined based on the formula that provides the greatest pension benefit at the time the employee terminates or retires. For example, if the employee terminates in Year 10, the pension plan's [flat-benefit formula](https://asc.understandingaccounting.org/glossary/f/#flat-benefit-formula "A benefit formula that bases benefits on a fixed amount per year of service, such as $20 of monthly retirement income for each year of credited service. A flat-benefit plan is a plan with such a formula.") provides a greater pension benefit than does the pension plan's pay-related formula, while if the employee terminates in Year 11, the pension plan provides that same employee with a greater benefit under its pay-related formula than under its flat-benefit formula. In a pension plan that effectively has a formula that defines different benefits for different years of service, an attribution approach that does not assign the same amount of pension benefit to each year of an employee's service may be required. ##### [715-30-55-12](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-12) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:902c4e8999ec5b92fc812c3c1bfc5deae2c3ebd4086cbb9f722a8ac26fbd53b9 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If a pension plan has more than one formula, the [accumulated benefit obligation](https://asc.understandingaccounting.org/glossary/a/#accumulated-benefit-obligation "The actuarial present value of benefits (whether vested or nonvested) attributed, generally by the pension benefit formula, to employee service rendered before a specified date and based on employee service and compensation (if applicable) before that date. The accumulated benefit obligation differs from the projected benefit obligation in that it includes no assumption about future compensation levels. For plans with flat-benefit or non-pay-related pension benefit formulas, the accumulated benefit obligation and the projected benefit obligation are the same.") shall be based on the greatest of the pension benefits determined by applying each of the plan's formulas to service to date. The projected benefit obligation shall be determined based on the same formula until an allocation of incremental pension benefits for the remaining expected service period using another formula provides a greater pension benefit allocated to service in the current year. As indicated in the preceding paragraph, that may result in differing levels of benefits attributed to different years of an employee's service. ##### [715-30-55-13](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-13) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:db0a4bea2f843d7bf9a03beb936035bdec7873cb0ec7216499d1cb18b7fe634c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See Example 3 (paragraph [715-30-55-108](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-108)) for an illustration of how an employer would determine the accumulated and projected benefit obligations for a pension plan that has more than one benefit formula. ##### [715-30-55-14](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-14) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:5990ea3445093576d3c42c17b2b62489442fb25345a80b388a10c3639995bd5f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An employer may sponsor both a qualified pension plan (for tax purposes) and an excess benefit plan (sometimes referred to as a top-hat pension plan) during an employee's service period and the employee may be expected to receive a pension benefit under the excess benefit pension plan (that is, the employee's pension benefit at retirement is expected to exceed the limitations imposed by the U.S. Internal Revenue Code). In this situation, the projected benefit obligation should be attributed to the qualified pension plan (for tax purposes) until it equals the assumed benefit limitations imposed by the U.S. Internal Revenue Code. See paragraph [715-30-55-21](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-21) for considerations of future changes in limitations. Any incremental projected benefits for subsequent years of service should then be attributed to the excess benefit pension plan. Until an employee's projected benefits for service already rendered reach the benefit limitations of the underlying qualified pension plan, the employee is not eligible for benefits under an excess benefit pension plan and no cost or obligation should be attributed to that pension plan. ##### [715-30-55-14A](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-14A) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:c353ae3228849ffd54229ac03fcf2fdb7b6d46945a51cb12cfc6707208712033 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In most circumstances involving excess benefit pension plans, the plan assets of a qualified pension plan (for tax purposes) are segregated and restricted to provide pension benefits only under that pension plan. Therefore, unless an employer clearly has a legal right to use the plan assets of the qualified pension plan to pay directly the pension benefits of the nonqualified pension plan (a right that generally does not exist), the determination of net periodic pension cost, including amortization periods and patterns for recognition in earnings of the cost of retroactive plan amendments and gains or losses should be on a plan-by-plan basis. Also, the disclosures required by paragraph [715-20-50-2](https://asc.understandingaccounting.org/asc/715/20/#715-20-50-2) may need to be made separately for each plan. ##### [715-30-55-14B](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-14B) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:1fe497f5a66ca3a78db25807999e545e1252108156772cf532ca57a1de81ac7a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The fact that an employer could fund less to the qualified pension plan and use those withheld funds to pay the benefits of the nonqualified pension plan or engage in an asset reversion transaction of the qualified pension plan and use those withdrawn funds to pay the pension benefits of the nonqualified pension plan does not, in itself, allow the pension plans to be reported as a single pension plan. An additional reason that excess benefit pension plans should be viewed as separate pension plans is that sometimes those pension plans cover employees of several different qualified pension plans, in which case it would not be possible to sustain a one-plan view. ##### [715-30-55-15](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-15) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:e76c324c844d14980d36f9edc304ce481e7b96a641bf1cca07578cd4e31afcbd Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See Example 4 (paragraph [715-30-55-118](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-118)) for an illustration of attribution of pension benefits to a qualified pension plan (for tax purposes) and an excess benefit pension plan. ##### [715-30-55-16](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-16) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:bcf4f903151018a54a653b7541bed24afc7c805f4bece17003f54d3cc516dc31 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Paragraph [715-30-35-34](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-34) describes circumstances under which a substantive commitment is the basis for accounting beyond the written terms of a pension plan. ##### [715-30-55-17](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-17) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:a5eb041309fca1ef171c1af2857b95b321b047cc2ab73879c42e419575e57a59 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The determination of whether a substantive commitment exists to provide pension benefits for employees beyond the written terms of the pension plan's formula requires careful consideration of all the facts and circumstances surrounding the pension plan. Actions of the employer, including communications to the employees, can demonstrate the existence of that commitment. ##### [715-30-55-18](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-18) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:64da7d60cc59c8d59da940a0ea830ed868b946e581c42c8205016aa7526a5599 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. However, a history of retroactive [plan amendments](https://asc.understandingaccounting.org/glossary/p/#plan-amendment "A change in the existing terms of a plan or the initiation of a new plan. A plan amendment may increase benefits (a positive plan amendment), or reduce or eliminate benefits (a negative plan amendment), including those benefits attributed to years of service already rendered.") is not enough, in isolation, to establish a substantive commitment. Absent other evidence of a substantive commitment, such a history should be considered in determining the appropriate amortization periods for [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.") as discussed in paragraph [715-30-35-14](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-14). An employer's accounting for its pension plan should not anticipate a retroactive plan amendment that is not part of a series of retroactive plan amendments necessary to effect a substantive commitment to have a formula greater than its written form. ##### [715-30-55-19](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-19) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:d4e6e1ba48573dba512357b0550bce4ed0a797f79fd452055aedfd2079b4fa7f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An employer may have a substantive commitment to have a formula greater than the pension plan's written formula. There may be a difference between the effects of a retroactive plan amendment that were anticipated as part of that substantive commitment and the effects of the actual retroactive plan amendment. If that difference results from an intended modification of the formula for which there is a substantive commitment, the accounting shall be that prescribed in paragraphs [715-30-35-10 through 35-17](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-10) for a retroactive plan amendment. Otherwise, that difference is a gain or loss subject to the accounting specified in paragraphs [715-30-35-18 through 35-27](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-18) . ##### [715-30-55-20](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-20) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:c0f0f0206972c46bf36a2ef21a62a81b06651154367c3fb7e8bf02486b5109ab Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Paragraph [715-30-35-31](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-31) provides guidance on how the service cost component of net periodic pension cost shall reflect estimates of future compensation levels. It is not always necessary for assumed compensation levels to change each time assumed discount rates (and expectations of future inflation rates inherently contained in the assumed discount rates) change. Rather, that paragraph requires consistency based on the incorporation of expectations of the same future economic conditions. That paragraph does not require that both assumptions contain the same future inflation component unless that would be appropriate under the circumstances to reflect the best estimate of the pension plan's future experience. For example, an employer that competes with significant foreign entities may not increase its assumed compensation levels even though assumed discount rates increase because the employer expects that it could not successfully compete in the future if its labor costs increased at a rate greater than that already assumed. Another employer would increase its assumed compensation levels if assumed discount rates increased because changes in that employer's labor costs over time have been highly correlated with changes in inflation rates and the employer expects that correlation to continue. ##### [715-30-55-21](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-21) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:a942ae871f215d41c7b249c5ad82a6ac843ea776ba41b36d725028f6f1b06ad6 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Changes under existing law in benefit limitations, for example, such as those imposed by Section 415 of the U.S. Internal Revenue Code, that would affect benefits provided by a pension plan should be anticipated in measuring the service cost component of net periodic pension cost and the projected benefit obligation. If the existing law provides for indexing or has a schedule of changes inherent in it, those effects should be considered in determining the service cost component of net periodic pension cost and the projected benefit obligation to the extent consistent with other assumptions (that is, salary and inflation). ##### [715-30-55-22](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-22) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:f7e1dd3a1d12320ad7dd1dcbccaf8a1d386c3fe02124ca52e3f77ad90612336e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Provisions of a law, for example, Section 415 of the U.S. Internal Revenue Code, may be incorporated by reference into a pension plan's formula thereby limiting certain participants' accumulated benefits. In such cases, the determination of the pension plan's accumulated benefit obligation should not reflect the current limitation of the law if the pension plan's formula requires automatic increases in accumulated benefits as each change in the limitation under existing law occurs and future service is not a prerequisite for participants to receive those increases. The determination of the pension plan's accumulated benefit obligation should reflect those increases in the limitation under existing law that would be consistent with the pension plan's other assumptions. As described, the pension plan formula incorporates the type of automatic benefit increases addressed in paragraph [715-30-35-35](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-35). However, if employees would not automatically receive those pension benefit increases should they retire or terminate their service, then that paragraph would proscribe anticipating those increases and, therefore, the current limitation would be used in determining the accumulated benefit obligation in that situation. ##### [715-30-55-23](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-23) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:0d03b48ea10107e327172fe20dfb25845d4eb5fbd03f5bcc96cfe700fae2d9eb Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Paragraphs [715-30-35-43 through 35-46](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-43) establish the requirements for discount rates to be used in measurements of the vested, accumulated, and projected benefit obligations and the service and interest cost components of net periodic pension cost. ##### [715-30-55-24](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-24) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:e077fa78a9ccac2aca7e772775df7bb8abd8262cf13d895b0537ee81f5640554 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The assumed discount rates used to discount the vested, accumulated, and projected benefit obligations may be different if the employer can justify such differences in terms of the paragraph [715-30-35-46](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-46) requirement to make the best estimate of the assumed discount rates. For example, different rates should be used to measure the pension obligations for active and retired employees if necessary to reflect differences in the maturity and duration of pension benefit payments. The assumed discount rates for pension benefits that mature in a particular year shall not differ, however, regardless of whether the obligation for those pension benefits is presently classified as a vested, accumulated, or projected benefit obligation. ##### [715-30-55-25](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-25) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:dc9d6a6cacee84e50b949da9793cd5b25f671c9184d994ddab8c0a8c19e31b33 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An employer shall not select arbitrarily the assumed discount rates from within a range but shall select the best estimate of the interest rates at which the pension benefits could be effectively settled at that point in time. ##### [715-30-55-26](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-26) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:b2049f4f52bd97218f8f69344b5aaf930457acb3b497cd1f99156bbd3bc3bca0 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A change in the basis of estimating assumed discount rates, for example, by using high-quality bond rates for one year and annuity rates for the following year, is not a change in method of applying an accounting principle because of the objective of selecting assumed discount rates to determine the interest rates inherent in the price at which the pension benefits could be effectively settled—currently. ##### [715-30-55-27](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-27) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:beab784d42e2cb2ec602b4ed21a5453bc31b3acf4cbbe2a5b06efd5dfb8acbc5 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If an employer that previously used AA bond rates believes in a subsequent year that, in consideration of its pension plan's particular facts and circumstances, the interest rates that would be inherent in an effective [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 the pension benefits are now more closely reflected by the rates implicit in current prices of annuity contracts, then those rates should be used and the change is viewed as a change in estimate; the estimate being the determination of the effective settlement rates. The key is that the employer is using the rates implicit in current prices of annuity contracts as the basis to determine the best estimate of the effective settlement rates. The decision to use a particular methodology in a particular year does not mean that the employer must use that methodology in subsequent years. A change in the facts and circumstances may warrant the use of a different source that better reflects the rates at which the obligation could be effectively settled—currently. A position that holds such a change as a change in accounting principle would lend credence to the view that there are two or more acceptable alternatives. That is not the case. The objective is to select the best estimate of the effective settlement rates. ##### [715-30-55-28](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-28) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:222594fc05e77c4c3caf680d29a956cc6ac6231da9113d9e0b39aeda80e52019 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Another aspect of this estimation issue is determining when to change the basis of estimation from one particular methodology to another, for example, AA bond rates to rates implicit in current prices of annuity contracts. There is no prescribed mathematical formula for making that decision. As indicated in the preceding paragraph, the emphasis in selecting assumed discount rates shall be the use of the best estimate. Changes in the methodology used to determine that best estimate should be made when facts or circumstances change, for example, a general decline or rise in interest rates that has not yet been reflected in the rates implicit in the current prices of annuity contracts. If the facts and circumstances do not change from year to year, it would be inappropriate to change the basis of selection, particularly if the intent in changing the basis is to avoid a change in the assumed discount rates. ##### [715-30-55-29](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-29) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:6af598748455ce7ae099820218e11686122e0f640fe68ea90f6c8e99a3242a8b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A pension plan may have a bond portfolio that was dedicated at a yield significantly higher or lower than current interest rates. The historical rates of return as of the dedication date are not acceptable for use in discounting the projected and accumulated benefit obligations to their present value. Although it is acceptable for an employer to look to rates of return on high-quality fixed-income investments in selecting the assumed discount rates, it is the current rates of return on those investments, not the historical rates of return as of the dedication date, that are relevant. ##### [715-30-55-30](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-30) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:2dc8b218b6c6f1dbf007a6497279d08b5a4b2d3fce9bc3a1b2decc21a7063def Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Use of assumed discount rates based on historical rates of return is inconsistent with the paragraph [715-30-35-50](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-50) requirement to value plan assets at fair value. If interest rates decline or rise, the effect of the requirement to use current rates is to increase or decrease the present value of the projected benefit obligation. That increase or decrease in the obligation is a loss or gain that would be offset to the extent of the gain or loss in the fair value of the plan's dedicated portfolio of fixed-income investments. Any net gain or loss is subject to amortization as a component of net periodic pension cost. ##### [715-30-55-31](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-31) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:ce335f52552cebb297181aa43658fac43dfa95e19c6a80b966cff0753beba2f6 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Ordinarily, an employer would not want to purchase annuities for that portion of the pension benefit obligation related to future compensation levels and an insurance entity would be unwilling to undertake an unconditional obligation based on future compensation levels without charging increased premiums for the additional risk. Even though a current settlement of the portion of the projected benefit obligation that relates to future compensation levels is unlikely, an employer shall not use those interest rates implicit in current prices of annuity contracts to determine the accumulated benefit obligation, and use interest rates expected to be implicit in future prices of annuity contracts to determine the pension obligation in excess of the accumulated benefit obligation. The use of rates implicit in future annuity prices is not consistent with the requirements of paragraph [715-30-35-46](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-46) to use current settlement rates. ##### [715-30-55-32](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-32) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:bda256f76296df23bd392ed3b6657a4a2d0b0c6f6580f6878ebba868dfbedefc Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Those factors that are relevant for determining the timing and amount of estimated future annuity payments shall not be reflected by an implicit approach to selecting discount rates. Once the estimated future annuity payments are determined, the discounting process using an explicit approach does not consider anything other than the time value of money for purposes of determining the single sum that, if invested at the measurement date, would generate the necessary cash flows to pay the pension benefits when due (the sum necessary to settle effectively the pension obligation assuming no future experience gains or losses). ##### [715-30-55-33](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-33) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:2da57db68d2403723f8b6c3b7cae03415fac2d030a30b04245892efb68ee0c4e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. As required by paragraph [715-30-35-43](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-43), the assumed discount rates used to determine the projected, accumulated, and vested benefit obligations shall reflect the interest rates inherent in the price at which the pension benefits could be effectively settled—currently. However, how the accumulated benefit obligation or the projected benefit obligation (before discounting) is determined, that is, whether assumptions as to future inflation or compensation levels are considered, is not relevant in selecting discount rates. ##### [715-30-55-34](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-34) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:92a7b5f4dc1e2664c01fce5e3fd5e3967ad8ab90b43691a83c2ffaf66fb4f1d4 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See paragraph [715-60-55-4](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-4) for a discussion of the relationship of discount rates used to measure a pension benefit obligation to discount rates used to measure an other postretirement benefit obligation. ##### [715-30-55-35](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-35) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:c080c42ac0055e3721feee762805a9419744d10abb7446f9e4331719544e8f36 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The definition 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.") excludes amounts accrued by the employer but not yet paid to the plan if the exclusion is intended to relate to a recognized pension liability. However, if transferable securities issued by the employer are included in plan assets, the measurement of plan assets should also include the interest accrued but not yet received on those securities. ##### [715-30-55-36](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-36) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:df7d7c08cf35db7ce634cbaf1b2afa84c17b0aebf98b4b85e42dae91844b9d71 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An employer may have a nonqualified pension plan (for tax purposes) that is funded with life insurance policies owned by the employer. The cash surrender value of life insurance policies, if the employer is the owner or beneficiary, do not qualify as plan assets and the accounting for those policies should be in accordance with Subtopic 325-30. ##### [715-30-55-37](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-37) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:216225c19d082f30e214225807c86bab647b4f7a51345261708754c36f19efeb Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An employer may have several pension plans with similar plan assets and may elect to use a market-related value approach to value those plan assets. While paragraph [715-30-35-69](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-69) provides for the separate application of the guidance in this Subtopic to each plan, an employer should use different asset valuation methods for similar plan assets only if the pension plans' inherent facts and circumstances justify the difference in methodology. Otherwise, the use of a variety of asset valuation methods for similar plan assets is inconsistent with the objective of enhancing the comparability of reported pension information. ##### [715-30-55-38](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-38) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:e6e86257a94c3741b62de458e5d74dcd3bd885443c9d17b3ef5575ca1d165f82 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The asset valuation method selected for each class of plan assets should accomplish the objective of recognizing changes in the fair value of those plan assets in a systematic and rational manner over not more than five years. Once that method is selected, it should be applied consistently for that class of plan assets as should the method for dividing plan assets into classes. There is no limitation on the number of classes into which plan assets may be divided for purposes of selecting asset valuation methods for determining the [market-related value of plan assets](https://asc.understandingaccounting.org/glossary/m/#market-related-value-of-plan-assets "A balance used to calculate the expected return on plan assets. The market-related value of plan assets is either fair value or a calculated value that recognizes changes in fair value in a systematic and rational manner over not more than five years. Different ways of calculating market-related value may be used for different classes of assets (for example, an employer might use fair value for bonds and a five-year-moving-average value for equities), but the manner of determining market-related value is required to be applied consistently from year to year for each asset class. For a method to meet the criteria of being systematic and rational, it must reflect only the changes in the fair value of plan assets between various dates."). ##### [715-30-55-39](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-39) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:ec74ba65068d31b53c88f05f7f980e56ebda3aaa15477e630702e47d72d9ff11 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The use of a market-related value of plan assets affects the determination of net periodic pension cost in two ways. First, the market-related value of plan assets is the basis on which the expected return on plan assets is computed. Second, to the extent that gains or losses based on the fair value of plan assets are not yet reflected in the market-related value of plan assets, such amounts are excluded from the net gain or loss included in accumulated other comprehensive income that is subject to amortization beginning in the following year. Although those excluded gains or losses eventually affect net periodic pension cost, their impact is delayed through use of a market-related value of plan assets. ##### [715-30-55-40](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-40) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:8fb1bed3b6245333dceb2245f29c92b15c30c06c5661a5ca553a06c047fb144a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The definition of market-related value of plan assets contemplates the use of systematic and rational methodology that reflects only the changes in fair value of plan assets between various dates. An example of an unacceptable method for determining the market-related value of plan assets follows. It is not acceptable because it introduces a factor (see layer \[b\]) that can be unrelated to the change in the fair value of plan assets. This example of an unacceptable market-related value of plan assets is determined with a total return-on-plan asset component consisting of three layers: 1. a An expected return-on-plan asset component based on the beginning-of-year market-related value of plan assets, cash flow during the year, and the [expected long-term rate of return on plan assets](https://asc.understandingaccounting.org/glossary/e/#expected-long-term-rate-of-return-on-plan-assets "An assumption about the rate of return on plan assets reflecting the average rate of earnings expected on existing plan assets and expected contributions to the plan during the period.") 2. b An amount equal to the change in the accumulated benefit obligation that resulted from any change during the year in the assumed discount rates used to determine the accumulated benefit obligation (The amount is reduced pro rata if plan assets are less than the accumulated benefit obligation.) 3. c A variance component equal to a percentage (for example, 20 percent if a 5-year-averaging period is used) of the difference between the [actual return on plan assets](https://asc.understandingaccounting.org/glossary/a/#actual-return-on-plan-assets-component-of-net-periodic-pension-cost "For a funded plan, the actual return on plan assets is determined as the difference between the fair value of plan assets at the end of the period and the fair value at the beginning of the period, adjusted for contributions and payments of benefits during the period.") based on the fair values of those plan assets and the expected return on plan assets derived from component layers (a) and (b). ##### [715-30-55-41](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-41) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:5a594e6c0bb829484f5b14ae4480d93b5f26e38ec1c24c73c10757ef48b37929 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Paragraph [715-30-35-60](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-60) provides guidance on accounting for insurance contracts and distinguishes between insurance contracts that are in substance the equivalent purchases of annuities and other contracts. Paragraph [715-30-35-61](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-61) explains that certain attributes of annuity contracts result in accounting that is different in this Subsection from the accounting specified in the Settlements, Curtailments, and Certain Termination Benefits Subsections in this Subtopic. ##### [715-30-55-42](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-42) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:2aa13fdb28d7fcdcc3b85901783cfbeb5b3ef326e825106383db6dba69719f08 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Guaranteed investment contracts are not annuity contracts because they transfer only investment risk to the insurer. The insurer does not unconditionally undertake a legal obligation to provide specified pension benefits to specific individuals. For a guaranteed investment contract with a specified maturity date and for which there is no intent to liquidate the contract before that date, evidence of the fair value of the guaranteed investment contract might be obtained by looking to current yields on fixed-maturity securities having similar risk characteristics and duration. ##### [715-30-55-43](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-43) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:2e32daa44d55109a5c3d61feb769e9137731ddc64060904a96d85cd1641f585e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In an immediate participation guarantee investment contract, the market value adjustment should be considered in determining its fair value because, in effect, the contract value adjusted for any such market value adjustment represents the cash surrender value referred to in paragraph [715-30-35-60](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-60). If an immediate participation guarantee investment contract can be converted into 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."), the conversion value of the contract should be considered in determining its fair value. The evidence of fair value noted for guaranteed investment contracts in the preceding paragraph should also be considered for immediate participation guarantee investment contracts. ##### [715-30-55-44](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-44) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:8d615fb071b8184b2b9f58de1f83896e95419a7b478aa2b0756c61b3c554ba77 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following implementation guidance addresses issues related to amounts that are included in accumulated other comprehensive income. ##### [715-30-55-45](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-45) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:01654de0311aab8ed2ffc3679051e930f7d19494a474c7a5c82b4cf36648bc44 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The future service periods of employees expected to receive benefits is one of the inputs into amortization calculations specified in paragraphs [715-30-35-4 through 35-26](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-4) . ##### [715-30-55-46](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-46) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:efda7abe8ced86f962681c4311054593fbbeb1b896605919fc40d723c1e2d4e0 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In determining the periods for amortization of prior service cost included in accumulated other comprehensive income, minimum amortization of net gain or loss included in accumulated other comprehensive income, or amortization of the transition asset or obligation remaining in accumulated other comprehensive income, an employer shall not include the service periods of employees who are expected to receive only a return of their contributions (plus interest, if applicable) to a contributory [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.)") in determining the future service periods of employees expected to receive benefits under that pension plan. Only the future service periods of those employees who are expected to receive an employer-provided benefit shall be included. ##### [715-30-55-47](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-47) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:b2470efa3a90087676090247fc996e65edba4277ed8ba38cd4091d562702190a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The service periods of employees expected to terminate before their benefits are vested shall also not be included in the determination of the average remaining service period of employees expected to receive benefits under the pension plan. Only the service periods of those employees working as of the date for which the determination is made and who are expected to actually receive employer-provided benefits are included. ##### [715-30-55-48](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-48) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:bed0124cd8c4b330257d65ac11392e2f72a3b37203f20afd1523d4639ebf6b0c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If all or almost all of a plan's participants are inactive, paragraphs [715-30-35-11](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-11) and [715-30-35-24](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-24) provide for the average remaining life expectancy of the inactive participants to be used instead of average remaining service periods. There is no specific threshold for determining if a pension plan has almost all inactive participants for purposes of selecting the amortization period for certain components of net periodic pension cost. The threshold for using the average life expectancy of inactive participants requires judgment based on the facts and circumstances of the particular pension plan. ##### [715-30-55-49](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-49) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:fccd5e69613b84a6361bcdf9e632a1a0eedef990352e070a54ec309e9bc40e71 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In the event that all or almost all of a pension plan's participants are inactive due to a temporary suspension of the pension plan (that is, for a limited period of time, employees will not earn additional defined benefits), the minimum amortization of a net gain or loss included in accumulated other comprehensive income shall not be determined based on the average remaining life expectancy of the temporarily inactive participants. Instead, the minimum amortization of a net gain or loss included in accumulated other comprehensive income shall be determined based on the average remaining service period of the temporarily inactive participants expected to receive benefits under the pension plan. ##### [715-30-55-50](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-50) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:f7593e173e4159717bff918fbaecc459a16b0dfc8bebaf0dd14ed816bee47fc6 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In the event that all employees covered by a pension plan are terminated but not retired, the minimum amortization of a net gain or loss included in accumulated other comprehensive income shall be determined based on the average remaining life expectancy of the inactive participants. The situation described could arise, for example, if a division with its own pension plan is sold by the employer thus terminating the related employees, but the pension plan remains in existence and it retains the obligation for benefits accrued to the date of sale. In that situation, the minimum amortization of a net gain or loss included in accumulated other comprehensive income should be determined based on the average remaining life expectancy of the inactive participants. ##### [715-30-55-51](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-51) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:33b60409f8668d83815ad6f6a326ae039e541f46b816146683e75c24d6108371 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Paragraph [715-30-35-14](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-14) identifies the need to assess the individual circumstances and the substance associated with regular plan amendments. If an employer has a history of granting retroactive plan amendments every three years, for example, as part of union negotiations, the period benefited may be three years. If employees expect the pattern to continue, the future economic benefits to be obtained from a retroactive plan amendment may not continue if the pattern is broken; effectively, the future economic benefit of each retroactive plan amendment may expire over the period of the union contract (in this case, three years). In that situation, amortization of prior service cost included in accumulated other comprehensive income over a three-year period would be appropriate. Whether three years is the appropriate amortization period for a retroactive plan amendment that is part of a three-year amendment pattern shall be determined based on the facts and circumstances of the particular situation. ##### [715-30-55-52](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-52) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:9f7183071f98287b74494ec2791a9c2ce44ae4af57c058078564b9b7ffa40cf4 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. There may be a transition asset remaining in accumulated other comprehensive income that is reduced when a settlement gain is recognized. Similarly, a transition asset or obligation remaining in accumulated other comprehensive income may be reduced as part of the accounting for a [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."). The balance of the transition asset remaining in accumulated other comprehensive income after a settlement gain or the balance of the transition asset or obligation remaining in accumulated other comprehensive income after a curtailment, shall be amortized on a straight-line basis over the remainder of the amortization period determined at transition. ##### [715-30-55-53](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-53) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:25ebe9b045da1b53d66a573c93729c496bd45fc1030f342fc68d402a68ed1a7a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In the event that a pension plan curtailment occurs causing almost all of the pension plan's participants to become inactive, the employer shall continue to amortize any transition asset or obligation remaining in accumulated other comprehensive income (the amount remaining after the employer accounts for the curtailment as required by paragraphs [715-30-35-92 through 35-93](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-92) ) using the same amortization period determined at transition. ##### [715-30-55-54](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-54) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:bae1686d9ad745f74dd72b96cc0cb77f8d61d5641454b6bd1a4975969716225c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An employer may grant a retroactive plan amendment that reduces the projected benefit obligation (a negative retroactive plan amendment). Paragraph [715-30-35-17](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-17) indicates that the reduction in benefits shall be used first to reduce any prior service cost included in accumulated other comprehensive income. If several prior retroactive plan amendments in the aggregate have resulted in prior service costs included in accumulated other comprehensive income that exceed the effects of the negative retroactive plan amendment, unless the retroactive plan amendment that reduces benefits can be specifically related to a prior retroactive plan amendment, any systematic and rational method (for example, last-in, first-out \[LIFO\]; first-in, first-out \[FIFO\]; or pro rata), applied on a consistent basis, is acceptable for use to apply the guidance. ##### [715-30-55-55](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-55) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:f9c1ce309cb950b91e50c8460cd86c358797efe3db777c66810cbe1d00f563a9 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An employer may amend a pension plan to delete a provision that a percentage of the employee's accumulated benefits be paid to the employee's spouse upon death of the employee before a specified age. Such a reduction in benefits shall be accounted for as a retroactive plan amendment. ##### [715-30-55-56](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-56) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:97c4ddb82602a7169cd3a95ac63f72ded01d5c0a5f6bacec5690b1e5db3fed66 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Paragraph [715-30-35-68](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-68) provides guidance on measuring net periodic pension cost when measurements more recent than the previous year-end are available and establishes that the measurement of net periodic pension cost shall be based on the most recent measurements of plan assets and obligations. ##### [715-30-55-57](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-57) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:f4934f513222a18ecf0355a8751ffb7ee53a744725de1b5744ed53159e43e983 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. It may be necessary to have an actuarial valuation as of the employer's fiscal year-end (for example, December 31) in addition to the actuarial valuation made as of the pension plan's preceding year-end (for example, June 30). In such an example, net periodic pension cost for the year should be the sum of two six-month measurements (January 1-June 30, determined as of the preceding December 31; July 1-December 31, determined as of the preceding June 30). ##### [715-30-55-58](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-58) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:80d1c735cbdd1a630d27ee0a453b046428745cddc34547e0cb9efec0810937e7 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If an employer that has a December 31 financial report date measures its plan assets and obligations as of an interim date during its fiscal year, for example, because of a significant retroactive plan amendment, net periodic pension cost for the remainder of the fiscal year should be based on the most recent pension measurements. Net periodic pension cost for the preceding interim periods should not be adjusted. ##### [715-30-55-59](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-59) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:3f7bf27813ed386ef503434578d1aac399232296d89ff59ea916285b0960cd32 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An employer may use a measurement date of December 31 but not complete the actual measurements until some time later, for example, in January. In this situation, the determination of the pension obligations should not be based on the assumed discount rates and other actuarial assumptions as of January. The employer should use the actuarial assumptions, including assumed discount rates, that were appropriate as of the measurement date of December 31 because the objective is to determine the various pension measurements, including plan assets, as of that date. ##### [715-30-55-60](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-60) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:c6187fa05052a8c30d43ecc884389c926f094cc3fb0a0a840aa962d79fa854fc Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The projected benefit obligation reflects 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 all benefits attributed to employee service rendered before the date of the employer's fiscal year-end statement of financial position, with limited exceptions as addressed in paragraphs [715-30-35-62 through 35-68](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-62) . The measurement of that obligation shall be based on actuarial assumptions appropriate for the date of the employer's fiscal year-end statement of financial position (for example, [turnover](https://asc.understandingaccounting.org/glossary/t/#turnover "Termination of employment for a reason other than death or retirement."), [mortality](https://asc.understandingaccounting.org/glossary/m/#mortality-rate "The proportion of the number of deaths in a specified group to the number living at the beginning of the period in which the deaths occur. Actuaries use mortality tables, which show death rates for each age, in estimating the amount of pension benefits that will become payable."), [discount rates](https://asc.understandingaccounting.org/glossary/d/#discount-rate "A rate or rates used to reflect the time value of money. Discount rates are used in determining the present value as of the measurement date of future cash flows currently expected to be required to satisfy the pension obligation or other postretirement benefit obligation. See Actuarial Present Value."), and so forth) and census data as of that date. ##### [715-30-55-61](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-61) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:61a8293952d22912fe2ab6d8755ace5d38d2a9aec51e39ecaaa5f83dbb5d9016 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If an actuarial valuation is made as of a pension plan's year-end and that date precedes the date of the employer's fiscal year-end statement of financial position, it is, however, not always necessary to have another actuarial valuation made as of that date. If an employer is assured that the reliability of the measurement of that obligation determined by rolling forward data based on a valuation before the date of the employer's fiscal year-end statement of financial position is sufficiently high so that the amount of the pension obligation is substantially the same as would be determined by an actuarial valuation as of that date, then another actuarial valuation is not required. This is analogous to the acceptability of having an annual physical inventory taken as of a date before the financial report date if it has been demonstrated that reliance can be placed on perpetual records or another system that reflects subsequent events. ##### [715-30-55-62](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-62) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:03539ceead1ace01fe5fdbb28302bdd6236094edd90f18d9385e54aaeb054709 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Subtopic 715-80 provides guidance on multiemployer plans. Paragraph [715-30-35-70](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-70) provides guidance on [multiple-employer plans](https://asc.understandingaccounting.org/glossary/m/#multiple-employer-plan "A pension plan or other postretirement benefit plan maintained by more than one employer but not treated as a multiemployer plan. Multiple-employer plans are generally not collectively bargained and are intended to allow participating employers, commonly in the same industry, to pool their plan assets for investment purposes and to reduce the cost of plan administration. A multiple-employer plan maintains separate accounts for each employer so that contributions provide benefits only for employees of the contributing employer. Multiple-employer plans may have features that allow participating employers to have different benefit formulas, with the employer's contributions to the plan based on the benefit formula selected by the employer.") that distinguishes multiemployer from multiple-employer plans and requires that multiple-employer plans be viewed as in-substance aggregations of [single-employer plans](https://asc.understandingaccounting.org/glossary/s/#single-employer-plan "A pension plan or other postretirement benefit plan that is maintained by one employer. The term also may be used to describe a plan that is maintained by related parties such as a parent and its subsidiaries."). The following example illustrates the guidance in that paragraph. ##### [715-30-55-63](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-63) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:f09f5a7adc04eeddd9d17e1f86135b75398c83a68c2970456ffdd1ed8d7eaede Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Assume a not-for-profit entity (NFP) has a defined benefit pension plan that covers employees at the national and all local chapters and each chapter is required to contribute to the pension plan based on a predetermined formula (for example, on a percentage-of-salary basis), plan assets are not segregated or restricted on a chapter-by-chapter basis, and if a chapter withdraws from the pension plan, the pension obligations for its employees are retained by the pension plan as opposed to being allocated to the withdrawing chapter. This arrangement should be accounted for as a single-employer pension plan in the NFP's financial statements. However, in each chapter's separate financial statements (if issued) the arrangement should be accounted for as a multiemployer pension plan. It is unclear how an allocation of net periodic pension cost or the overfunded or underfunded status of the defined benefit pension plan would be made if each chapter were to view its respective participation as a single-employer pension plan because the assets are not segregated or restricted by chapter and obligations are not assumed by a withdrawing chapter. Accounting for the pension plan as a multiemployer pension plan requires that a chapter's contribution for the period (in this example, the amount required to be contributed to the pension plan based on a percentage of its employees' salaries) be recognized as net periodic pension cost. A liability would be recognized for any contributions due and unpaid. The disclosures required by Section 715-80-50 do not apply in this situation. Instead, each chapter should disclose the name of the plan in which it participates and the amount of contributions it made in each annual period for which a statement of income (statement of activities for [not-for-profit entities](https://asc.understandingaccounting.org/glossary/n/#not-for-profit-entity "An entity that possesses the following characteristics, in varying degrees, that distinguish it from a business entity: Contributions of significant amounts of resources from resource providers who do not expect commensurate or proportionate pecuniary return Operating purposes other than to provide goods or services at a profit Absence of ownership interests like those of business entities. Entities that clearly fall outside this definition include the following: All investor-owned entities Entities that provide dividends, lower costs, or other economic benefits directly and proportionately to their owners, members, or participants, such as mutual insurance entities, credit unions, farm and rural electric cooperatives, and employee benefit plans.")) is presented, as well as any related-party disclosures required by Subtopic 850-10. ##### [715-30-55-64](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-64) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:b7c23a2519b631dcf145e63046b34df5152f3dd226002c01c889265bf4eaa992 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The conclusions in the preceding paragraph would also be true in a similar parent-subsidiary arrangement if the subsidiaries issue separate financial statements. In a similar arrangement, each subsidiary should account for its participation in the overall single-employer pension plan as a participation in a multiemployer pension plan. The disclosures required by Section 715-80-50 do not apply in this situation. Instead, each subsidiary should disclose the name of the plan in which it participates and the amount of contributions the subsidiary made in each period for which a statement of income or statement of activities is presented. The parent entity should, of course, account for the pension plan as a single-employer pension plan in its consolidated financial statements. ##### [715-30-55-65](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-65) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:81ab0179e35500133539476c7eb6b6c0d2ac1fe9e006e6ce04ee25573603766f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Paragraphs [715-10-15-6 through 15-7](https://asc.understandingaccounting.org/asc/715/10/#715-10-15-6) establish that there are no special provisions applicable to plans or arrangements outside the United States and specifies that, to the extent that those arrangements are in substance similar to plans in the United States, they are subject to the provisions of this Topic. ##### [715-30-55-66](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-66) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:a4f48701ec610982b18c916059632510d86805f978c1740bbeae417fd38e036d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A non-U.S. pension plan may provide death and disability benefits that are greater than the incidental death and disability benefits allowed in U.S. tax-qualified pension plans. The relative level of death and disability benefits paid by a plan that provides primarily pension benefits should not, in itself, cause the pension plan to be in substance different from a U.S. pension plan. ##### [715-30-55-67](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-67) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:f2c365cb71229cb3ff2e57f55b4b27048804d4b0c04b9683126122a54a55b31d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Under certain plans (typically non-U.S. plans) the actuarial present value of the benefits to which an employee is entitled if the employee terminates immediately may exceed the actuarial present value of the benefits to which the employee is entitled at the employee's expected date of separation based on service to date. In those situations, to determine the [vested benefit obligation](https://asc.understandingaccounting.org/glossary/v/#vested-benefit-obligation "The actuarial present value of vested benefits."), the employer may record either the actuarial present value of [vested benefits](https://asc.understandingaccounting.org/glossary/v/#vested-benefits "Benefits for which the employee's right to receive a present or future pension benefit is no longer contingent on remaining in the service of the employer. (Other conditions, such as inadequacy of the pension fund, may prevent the employee from receiving the vested benefit.) Under graded vesting, the initial vested right may be to receive in the future a stated percentage of a pension based on the number of years of accumulated credited service; thereafter, the percentage may increase with the number of years of service or of age until the right to receive the entire benefit has vested.") to which the employee is entitled if the employee separates or the actuarial present value of the vested benefits to which the employee is currently entitled based on the employee's expected date of separation or retirement as provided for in paragraphs [715-30-35-40 through 35-41](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-40) . ##### [715-30-55-68](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-68) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:57a5db10883b3725ab6a3ea6256a570de295ed695af7e5ff40b084392a389496 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following guidance addresses the accounting for certain arrangements in Japan and Germany. ##### [715-30-55-69](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-69) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:223f635ebe4196493295535d211d9f78290afa2cbb873af9cdc843190f9c72c7 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following guidance refers to provisions of the Japanese Welfare Pension Insurance Law; however, it shall not be considered a definitive interpretation of that law for any purpose. ##### [715-30-55-70](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-70) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:dea84d9d0310e57e4f0968869d8917ba362400b2259686b487f085496e1ff80f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In Japan, many large entities have Employees' Pension Fund plans, which are defined benefit pension plans established under the Japanese Welfare Pension Insurance Law. These plans are composed of both of the following components: 1. a A substitutional portion based on the pay-related part of the old-age pension benefits prescribed by Japanese Welfare Pension Insurance Law (similar to social security benefits in the United States) 2. b An entity portion based on a contributory defined benefit pension arrangement established at the discretion of each employer. ##### [715-30-55-71](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-71) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:4dd395491e94e6bbc55ec4c9834cd7514edc1f6b2937f7d0e29a04525dd0ec6c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An employer with an Employees' Pension Fund and its employees are exempted from contributions to Japanese Pension Insurance that would otherwise be required if they had not elected to fund the substitutional portion of the benefit through an Employees' Pension Fund arrangement. The Employees' Pension Fund, in turn, pays both the entity and the substitutional pension benefits to retired beneficiaries out of its plan assets. Benefits of the substitutional portion are based on a standard remuneration schedule as determined by Japanese Welfare Pension Insurance Law, but the benefits of the entity portion are based on a formula determined by each employer or Employees' Pension Fund. The plan assets of an Employees' Pension Fund are managed and invested as a single portfolio for the entire Employees' Pension Fund and are not statutorily attributed to the substitutional and entity portions. The significance of the substitutional portion to the entire Employees' Pension Fund varies. In some plans, the substitutional portion may account for as little as 10 percent of the total projected benefit obligation, while in others it may account for as much as 60 percent of the total projected benefit obligation. ##### [715-30-55-72](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-72) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:092c1c16078416eb56b8f47c6bdd7fd1a35958c557905fb2f485849852a68342 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Employees' Pension Fund arrangements shall be accounted for as single-employer defined benefit plans using a single plan approach. ##### [715-30-55-73](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-73) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:a1642e7a72229c161cc7aaf1ccb91ccc2ab09f905540e85dc8cda440046b3a16 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In June 2001, the Japanese Welfare Pension Insurance Law was amended to permit each employer/Employees' Pension Fund to separate the substitutional portion from its Employees' Pension Fund and transfer the obligation and related assets to the government. Upon completion of the separation, the remaining substitutional obligation and related plan assets, determined pursuant to a government formula, are transferred to a government agency, and the employer/Employees' Pension Fund is released from paying the remaining substitutional portion of the benefits to Employees' Pension Fund beneficiaries. After the separation, both the employer and the employees are required to make periodic contributions to Japanese Pension Insurance, and the Japanese government is responsible for all benefit payments earned under Japanese Welfare Pension Insurance Law. The remaining portion of the Employees' Pension Fund (that is, the entity portion) continues to exist exclusively as a defined benefit pension plan, although, from a legal or regulatory perspective, the Employees' Pension Fund is deemed to have been dissolved and a defined benefit pension plan is deemed newly established when the separation process is completed. After the separation process, an employer may transfer the remaining entity portion of an Employees' Pension Fund into a defined contribution plan. ##### [715-30-55-74](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-74) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:a57a8de9197445c725eadee65ee14de5c69c10b188eedd1587a7a7a162ff2da2 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The process of separating the substitutional portion from the entity portion occurs in four phases, but the employer/Employees' Pension Fund may not complete only certain parts of the separation process. Essentially, once an employer/Employees' Pension Fund obtains Phase 2 approval, it must complete the entire separation process. Likewise, assuming the employer/Employees' Pension Fund has obtained the requisite approval from the employees' representative, the separation is subject only to administrative processing by the government. The four phases are as follows: 1. a Phase 1—An employer/Employees' Pension Fund makes an application to the Japanese government for an exemption from the obligation to pay benefits for future employee service related to the substitutional portion. As a prerequisite to making that application, the representative of the employees covered by the plan must agree to the separation. 2. b Phase 2—On or after April 1, 2002 (when the June 2001 amendment to the Japanese Welfare Pension Insurance Law became effective), the Japanese government gives each employer/Employees' Pension Fund an approval of exemption from the obligation for benefits related to future employee service under the substitutional portion. Once that approval is obtained, the employer begins making Japanese Pension Insurance payments directly to the government. 3. c Phase 3—After obtaining an approval of exemption from the obligation for benefits related to future employee service under the substitutional portion, the employer/Employees' Pension Fund must make another application for separation of the remaining substitutional portion (that is, the benefit obligation related to past services). 4. d Phase 4—Within two and a half years from the enactment date of the Japanese Welfare Pension Insurance Law amendment (June 15, 2001), the Japanese government will grant each employer/Employees' Pension Fund the final approval of separation. On obtaining that approval, the remaining benefit obligation of the substitutional portion (that amount earned by past services) as well as the related government-specified portion of the plan assets of the Employees' Pension Fund will be transferred to Japanese Pension Insurance. ##### [715-30-55-75](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-75) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:bb11e2f1c66267a400e2b12711bc241d718ee337e7fb338603434053f735a664 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The entire separation process shall be accounted for upon completion of the transfer to the government of the substitutional portion of the benefit obligation and related plan assets (Phase 4) as the culmination of a series of steps in a single settlement transaction. This guidance is limited to the accounting for the separation of the substitutional portion of the benefit obligation from the entity portion of the benefit obligation in a Japanese Employees' Pension Fund arrangement and the transfer of the substitutional portion and related assets to the Japanese government pursuant to the June 2001 Japanese Welfare Pension Insurance Law amendment. ##### [715-30-55-76](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-76) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:9482144e65722992983444df1e306a0ac31f3a3276c7352438a12553a226a88c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. At the time the assets are transferred to the government in an amount sufficient to complete the separation process, the transaction is considered to be complete and the elimination of the entire substitutional portion of the benefit obligation shall be accounted for as a settlement at that time. Immediately before the separation, in accordance with the guidance in the Settlements, Curtailments, and Certain Termination Benefits Subsections in this Subtopic, the entire projected benefit obligation would be remeasured at fair value, including the effects of anticipated future salary increases. That remeasurement would include the effects of any changes in actuarial assumptions as well as actual experience since the previous measurement date. The obligation would be measured at current market rates of interest that could be obtained in a transaction with a third-party, nongovernmental entity to settle the obligation. On the basis that the government had accepted responsibility for all substitutional benefits earned after Phase 2 approval, the remeasurement of the projected benefit obligation shall include only benefits earned under the substitutional arrangement before Phase 2 approval. ##### [715-30-55-77](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-77) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:7e62c47acce9f348df8402de412dd5bce6226d26faeaa02b47dc5f89de38bef1 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In accounting for the settlement of the substitutional portion of the obligation, a proportionate amount of the net gain or loss included in accumulated other comprehensive income related to the entire Employees' Pension Fund would be recognized as a settlement gain or loss. The proportionate amount of the net gain or loss to be recognized would be determined based on the proportion of the projected benefit obligation settled to the total projected benefit obligation, both of which would exclude the previously accrued salary progression for purposes of that calculation. After the separation, the remaining assets and obligation of the Employees' Pension Fund, along with the prior service costs included in accumulated other comprehensive income and gains and losses included in accumulated other comprehensive income would continue to be accounted for pursuant to the requirements of this Subtopic. ##### [715-30-55-78](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-78) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:1ab16d6d73bfd1a3cc2fde5d00558f5a45602d59b975fac238307727289928b8 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The difference between the obligation settled and the assets transferred to the government, determined pursuant to the government formula, shall be accounted for as a subsidy from the government pursuant to applicable generally accepted accounting principles (GAAP). The derecognition of previously accrued salary progression at the time of settlement, discussed in the preceding paragraph, shall be accounted for separately from the government subsidy. ##### [715-30-55-79](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-79) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:e0625ec172eccefb6065c90787af4d13a162ac5504b2a7d7a6d323bddf70a97a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See Example 5 (paragraph [715-30-55-121](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-121)) for an illustration of the application of this guidance on a transfer to the Japanese government of the substitutional portion of employee pension fund liabilities. ##### [715-30-55-80](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-80) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:808bb9638c04b0e5bb7edf7658ec817e34892ba5b7ba42193d6748a9c3320fd9 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following guidance refers to provisions of German legislation related to an early retirement program; however, it shall not be considered a definitive interpretation of that legislation for any purpose. ##### [715-30-55-81](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-81) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:ee67397eded7146a656a78dabea8e6c6b3f9a89b67d8e44208c11f1c6fe7bf18 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The Altersteilzeit arrangement is an early retirement program in Germany designed to create an incentive for employees, within a certain age group, to transition from (full- or part-time) employment into retirement before their legal retirement age. The program was created by legislation in 1996 and through subsequent extensions is now scheduled to expire in 2009. Employers taking advantage of this legislation must sign a contract under the legal framework outlined in the legislation with the workers' council or unions or with the individual employees (for employees not within a workers' council or union) to qualify for subsidies from the government. The German government provides a subsidy (reimbursement) to an employer for the bonuses paid to the employee and the additional contributions paid into the German government pension scheme under an Altersteilzeit arrangement for a maximum of six years. To receive this subsidy, an employer must meet certain criteria (typically, an employer must hire replacement employees from currently registered unemployed persons or former trainees). ##### [715-30-55-82](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-82) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:a6e9e93c096f91ac186b53fe5434dfdaef396d9db72470f91a98a599dec78c52 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This guidance addresses specific features in Altersteilzeit arrangements. This guidance may also apply to other types of benefit arrangements with the same or similar terms. ##### [715-30-55-83](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-83) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:2b2df1c90f26d312c3fba74e4b70fef0a419a49d145f8db0f76c99a6774ef2cf Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Typical features of an Altersteilzeit arrangement include the following: 1. a To enroll in an Altersteilzeit arrangement, an employee must sign an Altersteilzeit contract with the employer. The employee can sign the Altersteilzeit contract before being eligible to begin working under the Altersteilzeit arrangement. An employee may begin working under the Altersteilzeit arrangement only upon attaining the age such that upon completion of the Altersteilzeit period he or she will be eligible for the normal government retirement benefits (typically 63 years old for men and 62 years old for women). The Altersteilzeit period consists of the period from when the employee begins to work under the Altersteilzeit arrangement until the employee is no longer under a legal work arrangement with the employer (terminated from the entity). This period is generally one to six years, depending on the specific Altersteilzeit arrangement and the age of the [participant](https://asc.understandingaccounting.org/glossary/p/#participant "Any employee or former employee, or any member or former member of a trade or other employee association, or the beneficiaries of those individuals, for whom there are pension plan benefits or other accumulated plan benefits."). 2. b An employer is required to allow participation in the Altersteilzeit arrangement without restriction until participation reaches 5 percent of the total work force. After 5 percent participation is achieved, an employer has, at its discretion, the right to determine whether employees are accepted into the Altersteilzeit arrangement. However, in some situations, a lower mandatory participation cap is agreed to between an employer and the workers' council. 3. c In most cases, an employee is required to work for a minimum period of time with any employer before being eligible for the Altersteilzeit arrangement; prior employment with the present employer is not necessary. 4. d The arrangement typically offers two alternative arrangements for participating employees: 1. 1 Type I: participant works 50 percent of the normal full-time schedule for each year of the entire Altersteilzeit period and receives 50 percent of his or her salary each year. 2. 2 Type II: participant works full-time for half of the Altersteilzeit period, the active period, and then does not work for the remaining half, the inactive period, and receives 50 percent of his or her salary each year during the entire Altersteilzeit period. Under both alternatives, participants receive an annual bonus, which varies by employer, but will generally equal 10-15 percent of their most recent regular pay before the start of the Altersteilzeit period; thus, the regular combined paid compensation will normally equal about 60-65 percent of the participant's most recent regular pay before the start of the Altersteilzeit period. The employer also will make additional contributions into the German government pension scheme for participants (to compensate for the fact that the employee has not been working at his or her previous level during the Altersteilzeit period) during the entire Altersteilzeit period. Contributions into the German government pension scheme (as well as length of service) determine the amount of pension benefits the employee will receive from that scheme. Therefore, by making additional contributions into the German government pension scheme during the entire Altersteilzeit period, the pension benefits paid to the employees will be higher than they would have been had the contributions been based solely on the employees' active service during the Altersteilzeit period. 5. e Employees must provide service to the employer for the required portion of the Altersteilzeit period (the active period) to receive the full bonus. If a participant dies, voluntarily leaves the entity, or is otherwise terminated before fulfilling the service period requirement, the Altersteilzeit contract will be unwound and the total compensation received by the participant will be adjusted to the amount that the participant would have received if he or she had not participated in the Altersteilzeit arrangement (salary is contractually set at the amount the employee earned just before the Altersteilzeit period). For example, if an employee enters into a four-year Type II Altersteilzeit arrangement and leaves the entity after one year, the employee will receive (for the one year worked) all of his or her pre-Altersteilzeit period annual salary and will not receive any Altersteilzeit bonus. 6. f During the inactive period under the Type II Altersteilzeit arrangement, participants are legally under a work contract with the employer (considered employees); however, an employee is not permitted to return to active work. Otherwise, the employer would lose any government subsidy. 7. g Under the Type I arrangement, the employer can claim the subsidy for a replacement worker hired during the entire Altersteilzeit period. Under the Type II arrangement, an employer could only claim the subsidy for a replacement worker hired during the inactive Altersteilzeit period. Therefore, under the Type II arrangement, the reimbursement each year during the inactive period would be equivalent to two years of bonus payments and additional contributions made into the German government pension scheme. ##### [715-30-55-84](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-84) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:82b54330fcd82c39b372fb96e44f7d0361bc465177545dd656500210c1398db6 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The salary components of Type I and Type II Altersteilzeit arrangements (excluding the bonus and additional contributions into the German government pension scheme) shall be recognized over the period from the point at which the Altersteilzeit period begins until the end of the active service period. Additionally, the portion of the salary that is deferred under a Type II arrangement shall be discounted if payment is expected to be deferred for a period longer than one year. ##### [715-30-55-85](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-85) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:21838ddb97b4873a1baa6a0142a8bd87751264e1a86f56d1e24f2bb2e4e71220 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The bonus feature and the additional contributions into the German government pension scheme (collectively, the additional compensation) under a Type II Altersteilzeit arrangement shall be accounted for as a postemployment benefit under the guidance in Topic 712. An entity shall recognize the additional compensation over the period from the point at which the employee signs the Altersteilzeit contract until the end of the active service period. ##### [715-30-55-86](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-86) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:3dea5572074480f51de19985fd29726a83d5e6bc4f8185d8716fee859ebdb1fc Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The employer shall recognize the government subsidy when it meets the necessary criteria and is entitled to the subsidy. ##### [715-30-55-87](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-87) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:1a17f0f758f037303cc9e700f1b677dffa134414f0f79647abd26f6f09b87c67 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following implementation guidance addresses issues relating to either the combination of two or more of an employer's pension plans into one plan, or the division of one pension plan into two or more separate pension plans. ##### [715-30-55-88](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-88) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:4833c86484db37a177ec29634994427bee0cfebdc401859d649581f5b8bdcd47 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An employer may combine several of its pension plans resulting in the assets of each predecessor pension plan being available to satisfy the previously existing obligations of the other. Except for prior service costs included in accumulated other comprehensive income, similar amounts of the predecessor pension plans shall be aggregated, and a single amortization schedule for each of the combined amounts shall be used in this situation. That is, the amortization of the transition asset or obligation remaining in accumulated other comprehensive income shall reflect a reasonably weighted average of the remaining amortization periods used by the separate pension plans for that item and the minimum amortization of the aggregate net gain or loss included in accumulated other comprehensive income shall reflect the average remaining service period of the combined employee group. The prior service cost included in accumulated other comprehensive income of each pension plan at the time of the combination shall continue to be amortized as previously determined based on specific employee groups covered. ##### [715-30-55-89](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-89) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:b2e1cdc7631a1f46667893bfd90116ab6d4d728874be021d49651307c19fe28b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See Example 6 (paragraph [715-30-55-122](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-122)) for an illustration of the accounting when two plans are combined. ##### [715-30-55-90](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-90) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:3916f5cc67a63bf513dd7293d57153765eb0d916b9c0c704153a12ae5cdb2551 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An employer may divide a pension plan into two or more separate pension plans. Using paragraph [715-30-35-79](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-79) as guidance, an employer shall allocate the transition asset or obligation remaining in accumulated other comprehensive income and the net gain or loss included in accumulated other comprehensive income, in proportion to the projected benefit obligations of the two surviving plans. Prior service cost included in accumulated other comprehensive income shall be allocated to the surviving plans based on the applicable individuals included in the employee groups covered. ##### [715-30-55-91](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-91) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:f1cd0f2514332cfe097c0bd815ae80a51af1f24bc6dbfe58906941ab4d2f4956 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See Example 7 (paragraph [715-30-55-124](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-124)) for an illustration of the division of one pension plan into separate pension plans. ##### [715-30-55-92](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-92) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:69896efc40a99207734b5f1632627c9aeb11b6b120c39ae6761f2e0306f942db Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An employer may incorporate a division of its operations, subsequently spin it off to owners of the entity, and transfer to the new entity's pension plan either a pension benefit obligation related to the employees transferred as part of the spinoff or plan assets. Paragraph [845-10-55-1](https://asc.understandingaccounting.org/asc/845/10/#845-10-55-1) provides guidance on the accounting for such a transaction in a spinoff of nonmonetary assets to owners. #### Illustrations ##### [715-30-55-93](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-93) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:aaffdaa62d4d18c3b557486ffe09ee1ee1d37364b8b1fe9e86d1f1306fd09e5d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Example illustrates the prior service cost amortization guidance in paragraphs [715-30-35-11](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-11) and [715-30-35-13](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-13) and is based on the expected future years of service of participants active at the date of the amendment. ##### [715-30-55-94](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-94) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:1859d845eec6d5ea6f7d506f93ba9412d3d75e0ace68f0c5f9566da9143c8acc Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following Cases illustrate: 1. a Assignment of equal amounts of cost to future years of service (Case A) 2. b Use of straight line amortization to assign costs over average remaining service period (Case B). ##### [715-30-55-95](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-95) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:5d8986097da58be5bc9d36859a060aea2e5399b8f2ee5a7ef4ba2f6b2046bc55 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Cases A and B share all of the following calculations and assumptions. ##### [715-30-55-96](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-96) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:13714b2dbc77a67bddb939dddb29a27a004fcbc0256d42efdb23f7bc31f98e90 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. On January 1, 20X0, Entity A grants retroactive credit for prior service pursuant to a plan amendment. The amendment generates prior service cost of $750,000 that is recognized as an increase in the pension liability and a corresponding charge to other comprehensive income. The prior service cost resulting from the plan amendment is subsequently amortized as a component of net periodic pension cost based on the expected future years of service of active participants. Other comprehensive income is adjusted each period as prior service cost is amortized. ##### [715-30-55-97](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-97) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:986c380258d8539d9c3ddeb9cdd713e6e8a16407a5b26c28fa9668ce6ea11f64 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following table illustrates the calculation of the expected future years of service for the defined benefit plan of Entity A. At the date of the amendment (January 1, 20X0), the entity has 100 employees who are expected to receive benefits under the plan. Five percent of that group (5 employees) are expected to leave (either retire or quit) in each of the next 20 years. Employees hired after that date do not affect the amortization. Initial estimates of expected future years of service related to each amendment are subsequently adjusted only for a curtailment. - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-B7EF85AD-265F-43C5-957E-11A19B9B6A62-low.gif) Determination of Expected Years of Service Service Years Rendered in Each Year Year Individuals Future Service Years 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 A1-A5 5 5 B1-B5 10 5 5 C1-C5 15 5 5 5 D1-D5 20 5 5 5 5 E1-E5 25 5 5 5 5 5 F1-F5 30 5 5 5 5 5 5 G1-G5 35 5 5 5 5 5 5 5 H1-H5 40 5 5 5 5 5 5 5 5 I1-I5 45 5 5 5 5 5 5 5 5 5 J1-J5 50 5 5 5 5 5 5 5 5 5 5 K1-K5 55 5 5 5 5 5 5 5 5 5 5 5 L1-L5 60 5 5 5 5 5 5 5 5 5 5 5 5 M1-M5 65 5 5 5 5 5 5 5 5 5 5 5 5 5 N1-N5 70 5 5 5 5 5 5 5 5 5 5 5 5 5 5 O1-O5 75 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 P1-P5 80 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 Q1-Q5 85 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 R1-R5 90 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 S1-S5 95 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 T1-T5 100 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 "1,050" Service Years Rendered 100 95 90 85 80 75 70 65 60 55 50 45 40 35 30 25 20 15 10 5 100 95 90 85 80 75 70 65 60 55 50 45 40 35 30 25 20 15 10 5 Amortization Fraction "1,050" "1,050" "1,050" "1,050" "1,050" "1,050" "1,050" "1,050" "1,050" "1,050" "1,050" "1,050" "1,050" "1,050" "1,050" "1,050" "1,050" "1,050" "1,050" "1,050" ##### [715-30-55-98](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-98) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:04be1ea704c456a2b5a65d907636f07a3de5c05ce51a676c1b151c6e5749862f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Calculation of the expected future years of service considers population decrements based on the actuarial assumptions and is not weighted for benefits or compensation. ##### [715-30-55-99](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-99) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:f7cbb895d8400389fa93083c00fdbb9756d7f19968426dfed3ee660cbf5d01ab Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In this Case, each expected future service year is assigned an equal share of the initially determined prior service cost. The portion of prior service cost to be recognized in net periodic pension cost in each of the future years is determined by the service years rendered in that year. - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-240FBDC8-7477-4B7F-857C-FEAF9A2BE76B-low.gif) Employers' Accounting for Pensions Amortization of Prior Service Cost Year Beginning- of-Year Balance Amortization Rate Amortization End- of-Year Balance 20X0 " $750,000 " 100/1050 " $71,429 " " $678,571 " 20X1 " 678,571 " 95/1050 " 67,857 " " 610,714 " 20X2 " 610,714 " 90/1050 " 64,286 " " 546,428 " 20X3 " 546,428 " 85/1050 " 60,714 " " 485,714 " 20X4 " 485,714 " 80/1050 " 57,143 " " 428,571 " 20X5 " 428,571 " 75/1050 " 53,571 " " 375,000 " 20X6 " 375,000 " 70/1050 " 50,000 " " 325,000 " 20X7 " 325,000 " 65/1050 " 46,429 " " 278,571 " 20X8 " 278,571 " 60/1050 " 42,857 " " 235,714 " 20X9 " 235,714 " 55/1050 " 39,286 " " 196,428 " 20Y0 " 196,428 " 50/1050 " 35,714 " " 160,714 " 20Y1 " 160,714 " 45/1050 " 32,143 " " 128,571 " 20Y2 " 128,571 " 40/1050 " 28,571 " " 100,000 " 20Y3 " 100,000 " 35/1050 " 25,000 " " 75,000 " 20Y4 " 75,000 " 30/1050 " 21,429 " " 53,571 " 20Y5 " 53,571 " 25/1050 " 17,857 " " 35,714 " 20Y6 " 35,714 " 20/1050 " 14,286 " " 21,428 " 20Y7 " 21,428 " 15/1050 " 10,714 " " 10,714 " 20Y8 " 10,714 " 10/1050 " 7,143 " " 3,571 " 20Y9 " 3,571 " 5/1050 " 3,571 " - ##### [715-30-55-100](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-100) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:3e4482f2f914faee388ce1c25d9cec90fda9c529bacbd1d5e6dfce78194f90d0 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. To reduce the complexity and detail of the computations shown in Case A, alternative amortization approaches that recognize the cost of retroactive amendments as a component of net periodic pension cost more quickly may be consistently used under the guidance in paragraph [715-30-35-13](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-13). In this Case, Entity A elects to use straight-line amortization over the average remaining service period of employees expected to receive benefits (1,050 future service years/100 employees = 10.5 years), resulting in the following amortization. - ![](https://asc.understandingaccounting.org/asc-img/GUID-BF2228C6-CE2F-44B4-9CFE-C63A59ED5503-low.gif) Amortization of Prior Service Cost Year Beginning-of-Year Balance Amortization (a) End-of-Year Balance 20X0 " $750,000 " " $71,429 " " $678,571 " 20X1 " 678,571 " " 71,429 " " 607,142 " 20X2 " 607,142 " " 71,429 " " 535,713 " 20X3 " 535,713 " " 71,429 " " 464,284 " 20X4 " 464,284 " " 71,429 " " 392,855 " 20X5 " 392,855 " " 71,429 " " 321,426 " 20X6 " 321,426 " " 71,429 " " 249,997 " 20X7 " 249,997 " " 71,429 " " 178,568 " 20X8 " 178,568 " " 71,429 " " 107,139 " 20X9 " 107,139 " " 71,429 " " 35,710 " 20Y0 " 35,710 " " 35,710 " - (a) "750,000 ÷ 10.5 = 71,429" ##### [715-30-55-101](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-101) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:26f3fb7fc44707d93e6e34676fc1b40c92dd843fdb5e15324c2e049b7fb62eeb Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Example illustrates the guidance in paragraphs [715-30-35-18 through 35-27](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-18) applicable to gains and losses. This Subtopic provides for delayed recognition in net periodic pension cost of the effects of a number of types of events that change the measures of the projected benefit obligation and the fair value of plan assets. Those events include retroactive plan amendments and gains and losses. Gains and losses include the effects of changes in assumptions. ##### [715-30-55-102](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-102) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:5cc31fee18fd60cf468a90d4f87e06df23bc1de95573b3c621a19c1573f3fb9f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following Cases illustrate the accounting for different types of gains and losses: 1. a Liability loss (Case A) 2. b Asset gain (Case B) 3. c Asset loss and liability gain (Case C). ##### [715-30-55-103](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-103) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:f9a01c01d79c67b6f71f850818592996a996152a57658a1924823b65c9dbd924 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Each of the following Cases starts with an assumed beginning-of-the-year funded status and shows how a series of events changes the projected benefit obligation or the plan assets and how the effects of those events are recognized in the financial statements. Any change in the projected benefit obligation or the plan assets (other than contributions and benefit payments) either is initially recognized in other comprehensive income or is included in net periodic pension cost for the period. Employer contributions to a funded plan decrease a recognized pension liability or increase a recognized pension asset. Benefit payments from a funded plan reduce the pension obligation and the plan assets equally, with no effect on the employer's statement of financial position. ##### [715-30-55-104](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-104) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:e6095afadcb660d85fa60930b80adad8156c8423504d6967c546cd857e642583 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For simplicity, all illustrations ignore the effects of income taxes, and all contributions and benefit payments are assumed to occur on the last day of the year. Also, assumed discount rates and expected long-term rates of return are included for illustrative purposes only and are not meant to represent assumptions that would be appropriate at any given time. In all Cases, the service cost component is assumed as an input rather than calculated as part of the illustration. ##### [715-30-55-105](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-105) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:8fd0ce51f442d2a42c06fbb4b43182291a8a2da31c766dc3a3a3ec9097dc9499 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. When Entity B's plan assets and obligations were measured at December 31, 20X1, the amount of the projected benefit obligation was not equal to the expected amount. Because the discount rate had declined to 9 percent and for various other reasons not specifically identified, the projected benefit obligation was higher than had been projected (a loss had occurred). The results were as follows. - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-0CDEDAD3-EC9C-4643-A66A-0D1F6106719E-low.gif) Projected for 20X1 Actual for 20X1 and Projected for 20X2 Assumptions: Discount rate 10.00% 9.00% Expected long-term rate of return on plan assets 10.00% 10.00% Average remaining service 10 years 10 years - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-9A39555D-D204-42FE-B1CD-0F327BE5A47C-low.gif) Actual 12/31/X0 For 20X1 Projected 12/31/X1 Actual 12/31/X1 For 20X2 Projected 12/31/X2 (Amounts in thousands) Projected benefit obligation " $(1,000)" " $(1,060)" " $(1,200)" " $(1,266)" (a) Plan assets at fair value 800 880 880 968 (b) Funded status and recognized liability $(200) $(180) $(320) $(298) Amounts recognized in accumulated other comprehensive income: Transition obligation $200 $180 $180 $160 Prior service cost - - - - Net (gain) or loss - - 140 138 $200 $180 $320 $298 Service cost component $60 $72 Interest cost component 100 108 Expected return on assets (80) (88) Market-related value of assets $800 $880 "Actual return on assets— (increase) decrease" (80) Amortization of: Transition obligation 20 20 Prior service cost - - Net (gain) or loss - (c) 2 (c) Net periodic pension cost $100 $114 Contribution $100 $114 Benefits paid $100 $114 (a) "(Actual projected benefit obligation at December 31, 20X1) + (service component) + (interest component) − (benefits paid)." (b) "(Actual plan assets at December 31, 20X1) + (expected return on assets) + (contributions) − (benefits paid)." (c) The minimum amortization of the net gain or loss included in beginning accumulated other comprehensive income (see paragraph 715-30-35-24) is calculated as follows. 20X1 20X2 Net (gain) or loss included in beginning accumulated other comprehensive income $- $140 Plus asset gain or less asset loss not yet in market-related value of assets at 1/1--(fair value of plan assets) - (market-related value of plan assets) - - Net (gain) or loss included in beginning accumulated other comprehensive income subject to amortization - 140 Corridor = 10% of the greater of projected benefit obligation or market-related value of assets at 1/1 100 120 Net (gain) or loss included in beginning accumulated other comprehensive income outside corridor - 20 x 1/average remaining service 0.10 0.10 Amortization recognized in net periodic pension cost $- $2 ##### [715-30-55-106](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-106) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:b446d0d8e580513b2f3b266a09c3fc097366a5df90788dda25a43049d800836a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. When Entity B's plan assets and obligations were measured at December 31, 20X2, the amount of plan assets was not equal to the expected amount because of market performance better than the expected or assumed 10 percent. The results were as follows. - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-BE2163DE-1C74-4196-9A33-081C005B1793-low.gif) Projected for 20X2 Actual for 20X2 and Projected for 20X3 Assumptions: Discount rate 9.00% 9.00% Expected long-term rate of return on plan assets 10.00% 10.00% Average remaining service 10 years 10 years - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-D2BF5C2A-7AF9-44AD-AEE0-CA035D428380-low.gif) Actual 12/31/X1 For 20X2 Projected 12/31/X2 Actual 12/31/X2 For 20X3 Projected 12/31/X3 (Amounts in thousands) Projected benefit obligation " $(1,200)" " $(1,266)" " $(1,266)" " $(1,345)" Plan assets at fair value 880 968 " 1,068 " " 1,167 " Funded status and recognized liability $(320) $(298) $(198) $(178) Amounts recognized in accumulated other comprehensive income: Transition obligation $180 $160 $160 $140 Prior service cost - - - - Net (gain) or loss 140 138 38 38 $320 $298 $198 $178 Service cost component $72 $76 Interest cost component 108 114 Expected return on assets (88) (99) (a) Market-related value of assets $880 $988 (b) Actual return on assets—(increase) decrease (80) (188) Amortization of: Transition obligation 20 20 Prior service cost - - Net (gain) or loss 2 (c) - (c) Net periodic pension cost $114 $111 Contribution $114 $111 Benefits paid $114 $111 (a) "Expected return on plan assets = (expected long-term rate of return on plan assets) × (market-related value of plan assets). If contributions occurred other than at the end of the year, market-related value would consider those amounts." (b) Market-related asset values may be calculated in a variety of ways. This Case uses an approach that adds in 20 percent of each of the last 5 years' gains and losses. The only objective of the market-related calculation is to reduce the volatility of net periodic pension cost. Market-related value of assets at 1/1 $880 Expected return on assets 88 Contributions 114 Benefits paid (114) 20% of last five years' asset gains and (losses) 20 Market-related value of assets at 12/31 $988 (c) The minimum amortization of the net gain or loss included in beginning accumulated other comprehensive income (see paragraph 715-30-35-24) is calculated as follows. 20X2 20X3 Net (gain) or loss included in beginning accumulated other comprehensive income $140 $38 Plus asset gain or less asset loss not yet in market-related value of assets at 1/1--(fair value of plan assets) - (market-related value of plan assets) - 80 Net (gain) or loss included in beginning accumulated other comprehensive income subject to amortization 140 118 Corridor = 10% of the greater of projected benefit obligation or market-related value of assets at 1/1 120 127 Net (gain) or loss included in beginning accumulated other comprehensive income outside corridor 20 - x 1/average remaining service 0.10 0.10 Amortization recognized in net periodic pension cost $2 $- ##### [715-30-55-107](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-107) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:39f82d1a86c1474416edfd228fe3988aa3ceba94781f4c2a0155e32fae97bb4b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. When Entity B's plan assets and obligations were measured at December 31, 20X3, both an asset loss and a liability gain were discovered. - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-E73E17E5-634F-4B68-BF6D-C073F33DAEBC-low.gif) Projected for 20X3 Actual for 20X3 and Projected for 20X4 Assumptions: Discount rate 9.00% 9.25% Expected long-term rate of return on plan assets 10.00% 10.00% Average remaining service 10 years 10 years - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-04C128BB-010F-4476-9191-D4DF2268A62A-low.gif) Actual 12/31/X2 For 20X3 Projected 12/31/X3 Actual 12/31/X3 For 20X4 Projected 12/31/X4 (Amounts in thousands) Projected benefit obligation " $(1,266)" " $(1,345)" " $(1,320)" " $(1,409)" Plan assets at fair value " 1,068 " " 1,167 " " 1,097 " " 1,206 " Funded status and recognized liability (198) (178) (223) (203) Amounts recognized in accumulated other comprehensive income: Transition obligation 160 140 140 120 Prior service cost - - - - Net (gain) or loss 38 38 83 83 $198 $178 $223 $203 Service cost component $76 $79 Interest cost component 114 122 Expected return on assets (99) (109) Market-related value of assets $988 " $1,093 " (a) Actual return on assets—(increase) decrease (188) (29) Amortization of: Transition obligation 20 20 Prior service cost - - Net (gain) or loss - (b) - (b) Net periodic pension cost $111 $112 Contribution $111 $112 Benefits paid $111 $112 (a) Market-related asset values may be calculated in a variety of ways. This Case uses an approach that adds in 20 percent of each of the last 5 years' gains and losses. The only objective of the market-related calculation is to reduce the volatility of net periodic pension cost. Market-related value of assets at 1/1 $988 Expected return on assets 99 Contributions 111 Benefits paid (111) 20% of last five years' asset gains and (losses) = .20 (100 - 70) 6 Market-related value of assets at 12/31 " $1,093 " (b) The minimum amortization of the net gain or loss included in beginning accumulated other comprehensive income (see paragraph 715-30-35-24) is calculated as follows. 20X3 20X4 Net (gain) or loss included in beginning accumulated other comprehensive income $38 $83 Plus asset gain or less asset loss not yet in market-related value of assets at 1/1— (fair value of plan assets) - (market-related value of plan assets) 80 4 Net (gain) or loss included in beginning accumulated other comprehensive income subject to amortization 118 87 Corridor = 10% of the greater of projected benefit obligation or market-related value of assets at 1/1 127 132 Net (gain) or loss included in beginning accumulated other comprehensive income outside corridor x 1/average remaining service - - 0.10 0.10 Amortization recognized in net periodic pension cost $- $- ##### [715-30-55-108](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-108) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:31d9f38e76efc65064437aa4c12bc1f02d292d7ec8437afdb1b282525ff87034 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Example illustrates the determination of benefits for a pension plan with a flat-benefit and a pay-related formula following the guidance in paragraphs [715-30-55-11 through 55-12](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-11) . ##### [715-30-55-109](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-109) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:407d3730f4373b74a1b92079afe405aecbbf17f6256b35027473a9c915f65868 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following Cases illustrate different assumed service periods: 1. a 30-year assumed service period (Case A) 2. b 20-year assumed service period (Case B) 3. c 40-year assumed service period (Case C). ##### [715-30-55-110](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-110) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:faf64c2e626e94d23f7e27c7d3dcacb1650e85ab36fc9bd860237b563efd9c49 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Cases A, B, and C share the following assumptions. An employer has a pension plan that provides a pension benefit that is the greater of two formulas. Formula A provides a flat benefit of $450 for each of the first 20 years of an employee's service, but no additional benefits are earned for years of service beyond 20 years; Formula B provides a benefit equal to 1 percent of final pay for each year of service. It is assumed that an employee starts at a salary of $11,000 in Year 1 and receives a $1,000 increase in salary for each year of service. To simplify the illustration, the actuarial present values of the accumulated benefit obligation and projected benefit obligation have not been determined. Rather, those obligations are expressed in terms of the annual pension benefits that begin when the employee retires. ##### [715-30-55-111](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-111) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:f325ed9a2102fe91bdba506be20824f520cbebbd8e734279662f0e0cd3f6483a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In this Case, it is assumed that an employee will retire at the end of Year 30 with a final salary of $40,000. For that employee, Formula A provides an annual pension benefit of $9,000 for 30 years of service ($450 for each of the first 20 years of service and no additional benefits for Years 21-30); Formula B provides an annual pension benefit of $12,000 for 30 years of service (30 x 1% x $40,000 or $400 for each year of service). The attribution of pension benefits to years of service for Formulas A and B is presented in the following table. - Chart I - Attribution - Formula A versus Formula B - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-855F61B3-AC07-4529-8F3F-F28BE982D226-low.gif) ##### [715-30-55-112](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-112) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:a7d5eadef78a0246ab0481a2c4ca7bd858114316c1ee72a725903100c022c4c0 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following table shows the increase in accumulated and projected benefits for each year of service for the employee under Formulas A and B. As can be seen, Formula A provides a greater accumulated and projected benefit for Years 1-20. In the following table and the table in paragraph [715-30-55-114](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-114), ABO depicts the accumulated benefit obligation and PBO depicts the projected benefit obligation. - Chart II - Accumulated and Projected Benefit Obligation - Formula A versus Formula B - ![](https://asc.understandingaccounting.org/asc-img/GUID-2FA29C7C-25FE-4913-B882-A14269123C99-low.gif) ##### [715-30-55-113](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-113) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:7620a1782a330f7dbad3d5ae828cd0a5ca0c90f368f06550c113feb076656996 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Beginning in Year 21, no additional pension benefits are provided under Formula A. At that point, Formula B begins to provide a portion of the total projected benefit attributed to Years 21-30. The additional pension benefit expected to be provided under Formula B for service in Years 21-30 is $3,000 ($9,000 accumulated benefit at Year 20 under Formula A as compared with $12,000 accumulated benefit at Year 30 under Formula B); that additional pension benefit is attributed to service ratably over Years 21-30 ($300 per year). Note that although no additional pension benefits are earned in Years 21 and 22 (see projected benefit obligation in the preceding table) because the projected benefit under Formula B in those years is less than $9,000, pension benefits are attributed to those years of service based on the total incremental pension benefit for Years 21-30. Attribution of total projected benefits to years of service is illustrated in the following table. - Chart III - Attribution of Benefits over Service - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-58B71389-CB93-436F-92FD-75A55584B285-low.gif) ##### [715-30-55-114](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-114) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:64a2b2ba38b0242862436acaf7c4db6f2f23ea4220bf69dada4a3d54ad408cbc Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Thus, while the accumulated benefit obligation at any point in time represents the greater of the pension benefits determined under Formulas A and B, the projected benefit obligation is determined on the basis of the formula providing the greater pension benefit (Formula A) until an allocation of incremental pension benefits for the remaining service period using another formula provides a greater pension benefit allocated to service in the current year. In this Case, the allocation of $3,000 of incremental benefits to Years 21-30 under Formula B provides a greater benefit allocated to service in those years ($300 per year) than Formula A would allocate ($0). The following table presents the increase in the accumulated benefit obligation and projected benefit obligation when the plan benefits are the greater of those determined under Formulas A and B. - Chart IV - Accumulated and Projected Benefit Obligation - Greater of Benefit under Formulas A and B - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-55EE9B14-3B4F-47A5-98D1-4C125CB9C6C3-low.gif) ##### [715-30-55-115](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-115) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:cafa239a28b674d2fc63151bee75f3736a9c12f35c68d86ebda0a60446bd6439 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The accumulated and projected benefit obligation for Years 1-30 are as follows. - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-87BA01F4-FA4B-434C-8E60-0E010A384E51-low.gif) Year Accumulated Benefit Obligation Projected Benefit Obligation 1-19 (a) (a) 20 " $9,000 " (a) " $9,000 " (a) 21 " 9,000 " (a) " 9,300 " (b) 22 " 9,000 " (a) " 9,600 " (b) 23 " 9,000 " (a) " 9,900 " (b) 24 " 9,000 " (a) " 10,200 " (b) 25 " 9,000 " (a) " 10,500 " (b) 26 " 9,360 " (c) " 10,800 " (b) 27 " 9,990 " (c) " 11,100 " (b) 28 " 10,640 " (c) " 11,400 " (b) 29 " 11,310 " (c) " 11,700 " (b) 30 " 12,000 " (c) " 12,000 " (b) (a) "$450 × years of service, not to exceed 20 years (Formula A)." (b) Formula A benefits earned through Year 20 plus attribution of additional projected benefits under Formula B (for 21-30 years of service) in proportion to the number of completed years of service to the number of years of service that are expected to be completed for the period during which Formula B is applied. (c) One percent of salary for the year noted for each year of service already rendered (Formula B). ##### [715-30-55-116](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-116) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:21937300d53eb6d3d96381a4995201c3522afffb2c66f816e7be4a7de6bf7ef9 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In this Case, it is assumed that an employee will retire at the end of Year 20 with a final salary of $30,000. For that employee, Formula A provides an annual pension benefit of $9,000 ($450 for each year of service); Formula B provides an annual pension benefit of $6,000 (20 x 1% x $30,000 or $300 for each year of service). Since Formula A provides the greater benefit in each year, attribution will be determined under Formula A. The accumulated benefit obligation and projected benefit obligation will be equal in Years 1-20 since Formula A is not pay-related. ##### [715-30-55-117](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-117) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:450906e35745458628ae24000e141e9ecad8ac7c12a8e8a643f2c68649a87c56 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In this Case, it is assumed than an employee will retire at the end of Year 40 with a final salary of $50,000. For that employee, Formula A provides an annual pension benefit of $9,000 for 40 years of service ($450 for each of the first 20 years of service and no additional benefits for service in Years 21-40); Formula B provides an annual pension benefit payable at retirement of $20,000 for 40 years of service (40 x 1% x $50,000 or $500 for each year of service). Since Formula B provides the greater pension benefit in each year, attribution of the projected benefit obligation will be determined under Formula B for all years of service. The accumulated benefit obligation, however, continues to be determined for each year of service by the formula that provides the greater accumulated benefit. ##### [715-30-55-118](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-118) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:2442322112dd0028ec32acf54aa15052c73bacab5bbe2e2b52fd5a3159d5ddf6 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Example illustrates the guidance in paragraph [715-30-55-14](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-14) relating to attribution of pension benefits to a qualified and to an excess benefit pension plan. ##### [715-30-55-119](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-119) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:dcedd5a302e4a31d7890eea15dde4549bf8c109ddac6f021c2fda2f1f57aa1a8 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In this Example, a pension plan's formula is an annual pension benefit of 2 percent of final pay for each year of service. It is assumed than an employee starts at a salary of $200,000 in Year 1, receives annual salary increases of $15,000, and retires at the end of 21 years at a salary of $500,000. It is further assumed that the limitation imposed by the tax law for annual pension benefit payments is $90,000 in Year 1 and that the limitation under the existing law will increase to permit annual pension benefit payments of $120,000 for all the years the employee will receive benefit payments. ##### [715-30-55-120](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-120) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:1a1a691b3e33c33c6b74191880097165fcfed81b9e9d21ea29c490a49ab0f31b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Attribution of the accumulated benefit obligation and projected benefit obligation for the employee is as follows. To simplify the illustration, the actuarial present values of the accumulated and projected benefit obligation have not been determined. Rather, those obligations are expressed in terms of the annual pension benefits that begin when the employee retires. - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-5FB40D67-AECD-460E-A985-5CF2016BB02D-low.gif) Total Qualified Pension Plan Excess Benefit Pension Plan Year of Service Salary Accumulated Benefit Obligation Projected Benefit Obligation Accumulated Benefit Obligation Projected Benefit Obligation Accumulated Benefit Obligation Projected Benefit Obligation 1 " $200,000 " " $4,000 " " $10,000 " " $4,000 " " $10,000 " 2 " 215,000 " " 8,600 " " 20,000 " " 8,600 " " 20,000 " 3 " 230,000 " " 13,800 " " 30,000 " " 13,800 " " 30,000 " 4 " 245,000 " " 19,600 " " 40,000 " " 19,600 " " 40,000 " 5 " 260,000 " " 26,000 " " 50,000 " " 26,000 " " 50,000 " 6 " 275,000 " " 33,000 " " 60,000 " " 33,000 " " 60,000 " 7 " 290,000 " " 40,600 " " 70,000 " " 40,600 " " 70,000 " 8 " 305,000 " " 48,800 " " 80,000 " " 48,800 " " 80,000 " 9 " 320,000 " " 57,600 " " 90,000 " " 57,600 " " 90,000 " 10 " 335,000 " " 67,000 " " 100,000 " " 67,000 " " 100,000 " 11 " 350,000 " " 77,000 " " 110,000 " " 77,000 " " 110,000 " 12 " 365,000 " " 87,600 " " 120,000 " " 87,600 " " 120,000 " 13 " 380,000 " " 98,800 " " 130,000 " " 98,800 " " 120,000 " " $10,000 " 14 " 395,000 " " 110,600 " " 140,000 " " 110,600 " " 120,000 " " 20,000 " 15 " 410,000 " " 123,000 " " 150,000 " " 120,000 " " 120,000 " " $3,000 " " 30,000 " 16 " 425,000 " " 136,000 " " 160,000 " " 120,000 " " 120,000 " " 16,000 " " 40,000 " 17 " 440,000 " " 149,600 " " 170,000 " " 120,000 " " 120,000 " " 29,600 " " 50,000 " 18 " 455,000 " " 163,800 " " 180,000 " " 120,000 " " 120,000 " " 43,800 " " 60,000 " 19 " 470,000 " " 178,600 " " 190,000 " " 120,000 " " 120,000 " " 58,600 " " 70,000 " 20 " 485,000 " " 194,000 " " 200,000 " " 120,000 " " 120,000 " " 74,000 " " 80,000 " 21 " 500,000 " " 210,000 " " 210,000 " " 120,000 " " 120,000 " " 90,000 " " 90,000 " ##### [715-30-55-121](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-121) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:eee0e2238d943f5779710e22a21ef357e81a95e80b92e4ae54f12d21854dd990 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Example illustrates the guidance in paragraphs [715-30-55-69 through 55-78](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-69) relating to a transfer to the Japanese government of the substitutional portion of employee pension fund liabilities. - ![](https://asc.understandingaccounting.org/asc-img/GUID-B8167136-DE5B-4ADE-8D1C-D171CE7B246B-low.gif) Total Employees Pension Fund Before Separation(a) Effect of Separation After Separation Accumulated benefit obligation " $(10,500)" " $5,000 " (b) " $(5,500)" Effects of projected future wage levels " (1,600)" 750 (c) (850) Projected benefit obligation " (12,100)" " 5,750 " " (6,350)" Plan assets at fair value " 6,420 " " (3,000)" (d) " 3,420 " Funded status " (5,680)" " 2,750 " (e) " (2,930)" Changes in plan assets and benefit obligations recognized in accumulated other comprehensive income: Transition obligation 50 - 50 Prior service cost (credit) (540) - (540) Net (gain) loss " 4,405 " " (1,941)" (f) " 2,464 " Total amount recognized in accumulated other comprehensive income " $(3,915)" " $1,941 " " $(1,974)" (a) Employee Pension Fund assets and obligations would be remeasured at fair value immediately before the separation transaction. (b) Assumed value of substitutional accumulated benefit obligation for purposes of illustration. (c) Assumed value of future salary levels (salary progression) related to substitutional benefit obligation at time of settlement for purposes of this Example. (d) Assumed value of assets required to be transferred to the government pursuant to the government formula for purposes of this Example. (e) "Difference between the fair value of the obligation "settled" with the government and the assets required to be transferred to the government. That amount, less the effect of the reversal of future salary progression ($750), is the government subsidy that shall be separately accounted for and disclosed." (f) "Calculated as the ratio of the obligation settled ($5,000) to the total Employees' Pension Fund obligation immediately before settlement ($11,350), both of which exclude the effect of future salary progression related to the substitutional portion, times the net gain or loss included in accumulated other comprehensive income immediately before settlement." ##### [715-30-55-122](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-122) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:f941a49a76e772e8e91d528ae918b6ffd5004381ecb0dad5bd63c763a8bd59f9 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Example illustrates the guidance in paragraph [715-30-55-88](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-88) on the combination of two plans. ##### [715-30-55-123](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-123) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:6cc6300a93a555d985b79ba334d785ebf81614acf0afe696541c3c7b818143c5 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In this Example, an employer has two pension plans (Plan A and Plan B) that are combined at December 31, 20X0. The following shows the assumptions and methods of amortizing pension amounts initially recognized in other comprehensive income and the funded status of each pension plan immediately before and after the combination of Plan A and Plan B. - December 31, 20X0—Before Combination of Plan A and Plan B - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-5BFD01F7-7A0B-48E8-91BD-CA88BD9E2D18-low.gif) Plan A Plan B Assumptions: Weighted-average discount rate 10% 9.25% Expected long-term rate of return on plan assets 10% 10% Average remaining service period 17 years 15 years "Number of employees as of December 31, 20X0 expected to receive benefits under the pension plan" 300 420 Amortization method: Prior service cost Straight-line amortization over average remaining service period of employees expected to receive benefits (17 years) Straight-line amortization over average remaining service period of employees expected to receive benefits (15 years) - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-2479F3CD-ECA6-4A4E-B069-9F237F8ABEF4-low.gif) Plan A Plan B Projected benefit obligation $(502) $(640) Plan assets at fair value 804 205 Funded status and recognized asset (liability) $302 $(435) Amounts recognized in accumulated other comprehensive income: Net (gain) loss $(114) $41 Prior service cost (credit) 120 321 $6 $362 - December 31, 20X0—After Combination of Plan A and Plan B - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-BEE15F40-DC89-42B5-AF2F-D24029B3908D-low.gif) Combined Plan AB Assumptions: Weighted-average discount rate 9.6% (a) Expected long-term rate of return on plan assets 10% (b) Average remaining service period 15.8 years (c) "Number of employees as of December 31, 20X0 expected to receive benefits under the pension plan" 720 Amortization method: Prior service cost The existing prior service costs continue to be amortized on the bases applied before the combination Net gain or loss Minimum amortization specified in paragraph 715-30-55-50 (average remaining service period is 15.8 years)(c) Projected benefit obligation " $(1,142)" Plan assets at fair value " 1,009 " Funded status and recognized asset (liability) $(133) Amounts recognized in accumulated other comprehensive income: Net (gain) loss $(73) Prior service (credit) cost 441 $368 (a) "The weighted-average assumed discount rate reflects the rates at which the combined pension benefits could be effectively settled. (For purposes of this Example, 9.6 percent is presumed to be the appropriate rate. It was not actually calculated using any of the data for the previously separate plans.)" (b) The expected long-term rate of return on plan assets does not change because both pension plans used the same rate. (c) The average remaining service period of employees expected to receive benefits under the pension plan is weighted by the number of covered employees from each group as follows: (17 years × 300 ÷ 720) + (15 years × 420 ÷ 720) = 15.8 years (rounded). That should be the same period that would be determined by a new calculation for the combined group. ##### [715-30-55-124](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-124) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:6ce62952518c23dcd588206dad0672829e56c4b425974910bbf504b8654c1c37 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Example illustrates the guidance in paragraph [715-30-55-90](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-90) relating to the division of one pension plan into separate pension plans. ##### [715-30-55-125](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-125) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:2bbcac870a82bd37beb4967c9e263833d2061ea57948bb83714983f7d5c64ebb Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In this Example, an employer has a pension plan that covers employees of the parent entity and its consolidated subsidiaries (Subsidiaries B and C). The employer divides its pension plan into three separate pension plans (Plan A, Plan B, and Plan C) that are sponsored by the parent entity and Subsidiaries B and C, respectively. ##### [715-30-55-126](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-126) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:4b636543c6363a32e2b7c48d517110806025c28bb443f8157d858462e31becf6 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following shows the funded status of the pension plans immediately before and after the division. - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-EBBC2D5E-EF7C-4760-BE19-6BF1EAA76BCE-low.gif) Before Division After Division "(Parent) Plan ABC" (Parent) Plan A (Subsidiary B) Plan B (Subsidiary C) Plan C Projected benefit obligation " $(90,000)" " $(54,000)" (a) " $(18,000)" (a) " $(18,000)" (a) Plan assets at fair value " 160,000 " " 132,000 " (b) " 15,000 " (b) " 13,000 " (b) Funded status and recognized asset (liability) " $70,000 " " $78,000 " " $(3,000)" " $(5,000)" Amounts recognized in accumulated other comprehensive income: Net gain " $(55,000)" " $(33,000)" (c) " $(11,000)" (c) " $(11,000)" (c) Prior service cost " 25,000 " " 17,500 " (d) " 5,000 " (d) " 2,500 " (d) Transition asset " (40,000)" " (24,000)" (c) " (8,000)" (c) " (8,000)" (c) " $(70,000)" " $(39,500)" " $(14,000)" " $(16,500)" (a) Allocation based on individual employees covered by each plan. (b) Allocation determined by employer. (Example presumes that no regulatory requirements apply.) (c) "Allocation based on percent of total projected benefit obligation ($90,000) assumed by each pension plan. For Plans A, B, and C, that is 60 percent, 20 percent, and 20 percent, respectively." (d) Allocation based on applicable individual employees covered by each plan. (Example presumes prior service cost not allocable on the same percentage basis as projected benefit obligation assumed by each pension plan.) ##### [715-30-55-127](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-127) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:d544557b0c774c09242f44990e87097b5d04560f239a154b67164b859b7aabd6 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The journal entries to account for the division of the pension plan follow. - Parent Entity - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-B3C8E5A0-D1B2-44E9-BC67-6B70B4B54CB2-low.gif) Pension asset " $8,000 " Accumulated other comprehensive income " 30,500 " Investment in Subsidiary B " $17,000 " Investment in Subsidiary C " 21,500 " - To record the transfer of pension assets, obligations, and amounts included in accumulated other comprehensive income from the parent entity to Subsidiaries B and C. - Subsidiary B - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-32782210-9BBA-4C5E-B427-554CF4E5C238-low.gif) Stockholder's equity (a) " $17,000 " Pension liability " $3,000 " Accumulated other comprehensive income " 14,000 " (a) The accounting within the equity section is not addressed in this Example. - To record the receipt of pension assets, obligations, and amounts included in accumulated other comprehensive income from the parent entity. - Subsidiary C - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-9AB6416E-2485-4CC0-97C4-390F2463385D-low.gif) Stockholder's equity (a) " $21,500 " Pension liability " $5,000 " Accumulated other comprehensive income " 16,500 " (a) The accounting within the equity section is not addressed in this Example. - To record the receipt of pension assets, obligations, and amounts included in accumulated other comprehensive income from the parent entity. ##### [715-30-55-127A](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-127A) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:791fbdaa4a7d50dff65edff2bb8a0423e5600f4a0b1d7adc122652de133192ec Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For the purposes of this Example, a cash balance plan has the following characteristics: 1. a A defined principal-crediting rate as a percentage of salary 2. b A defined, noncontingent interest-crediting rate that entitles participants to future interest credits at a stated, fixed rate until retirement. The benefit promise in a cash balance arrangement for a cash balance plan as described in (a) through (b) is not pay-related, and use of a projected unit credit method is neither required nor appropriate for purposes of measuring the benefit obligation and annual cost of benefits earned under this Subtopic. The appropriate cost attribution approach, therefore, is the traditional unit credit method. See paragraphs [715-30-35-36 through 35-39](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-36) and [715-30-55-7 through 55-15](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-7) for guidance on attribution approaches. ### Settlements, Curtailments, and Certain Termination Benefits ##### [715-30-55-128](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-128) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:d49adcda5e35e29823a224118ea9e7602272f74bee5f957d186fa29bd520172e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subsection is an integral part of the requirements of this Subtopic. This Subsection provides additional guidance and illustrations that address the application of accounting requirements to specific aspects of accounting for matters related to [settlements](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."), [curtailments](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."), 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.") related to defined benefit pension plans. The guidance and illustrations that follow may be based on provisions of law that are subject to change. These assumptions about the law are for illustrative purposes only. #### Implementation Guidance ##### [715-30-55-129](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-129) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:7946b0a09456762c13bd570a595ce51582a7b83ba55722d9eca3b60e6c053da5 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This implementation guidance is organized in the following categories: 1. a Relationship of settlements and curtailments to other events 2. b Settlements 3. c Curtailments 4. d Certain termination benefits 5. e Presentation matters. ##### [715-30-55-130](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-130) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:6cf75ee1b710566862decdea79e9beea9cab670d536b884ae07a330a42a94b27 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Paragraphs [715-30-35-74 through 35-78](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-74) establish general guidance on the relationship of settlements and curtailments to other events. That guidance is affected by whether there is a successor pension plan. A new pension plan that is established by an employer, or one or more existing pension plans that are amended by the employer, to provide for the accrual of defined [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.") for the future services of present employees that were previously covered by another pension plan (old plan) sponsored by that employer shall be considered a successor pension plan except under any of the following conditions: 1. a The new plan's pension [benefit formula](https://asc.understandingaccounting.org/glossary/b/#benefit-formula "See Pension Benefit Formula.") or the amendment or amendments to the existing pension plan(s) provide for accrual of only insignificant defined pension benefits for those employees. 2. b The new or existing pension plan or plans cover only an insignificant number of employees previously covered by the old plan. ##### [715-30-55-131](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-131) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:9dd31a007e8ecd1a4a1be16621e1a4a97f58e1db9ddc2d5fca6e28a5421c13d1 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The guidance in the Settlements, Curtailments, and Certain Termination Benefits Subsections of this Subtopic does not apply to an employer's withdrawal from a multiemployer pension plan, and, therefore, if the employer withdraws from a multiemployer pension plan and establishes a pension plan for its employees, that pension plan is not considered to be a successor pension plan. ##### [715-30-55-132](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-132) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:e6e8a48f942fd023ee753d280d291041f99c3d332c70f4caae85f2e5bcc01228 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An employer may terminate its pension plan, settle a pension benefit obligation, withdraw excess [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."), and establish a successor pension plan that has the same pension benefit formula. In this situation, a settlement occurs but a curtailment does not. Although employees no longer accrue pension benefits under the terminated pension plan, they do accrue pension benefits under the successor pension plan. From an accounting viewpoint, those two pension plans are viewed as one pension plan because, in substance, the pension plan has not been terminated. The only transactions requiring accounting recognition in the employer's financial statements are the settlement and the withdrawal of excess plan assets. See paragraphs [715-30-35-74 through 35-78](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-74) for guidance on whether a settlement or curtailment has occurred if defined benefits continue to be provided for future services. If the successor pension plan provides (reduced) increased pension benefits for all years of employees' future [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."), that change in the benefit formula is accounted for as a (negative) pension [plan amendment](https://asc.understandingaccounting.org/glossary/p/#plan-amendment "A change in the existing terms of a plan or the initiation of a new plan. A plan amendment may increase benefits (a positive plan amendment), or reduce or eliminate benefits (a negative plan amendment), including those benefits attributed to years of service already rendered."). See paragraph [715-30-55-54](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-54) for guidance on negative plan amendments. ##### [715-30-55-133](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-133) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:540095ab8df9fd3dfd744ddabbf067f4bd5a961eeda185b4187c61590ac1808b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A settlement of the pension benefit obligation as part of a pension [plan termination](https://asc.understandingaccounting.org/glossary/p/#plan-termination "An event in which the pension plan or postretirement benefit plan ceases to exist and all benefits are settled by the purchase of insurance contracts (for example, annuities) or by other means. The plan may or may not be replaced by another plan. A plan termination with a replacement plan may or may not be in substance a plan termination for accounting purposes.") (with no successor pension plan) may occur in a financial reporting period that differs from the period in which the effects of the curtailment resulting from the pension plan termination ordinarily would be recognized. The effects of the settlement and the effects of the curtailment that result from a pension plan termination shall be recognized in accordance with paragraphs [715-30-35-79 through 35-82](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-79) and [715-30-35-92 through 35-94](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-92) , respectively, which may result in the effects of those events being recognized in different periods. See Example 8 (paragraph [715-30-55-236](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-236)) for an illustration of a termination and a settlement recognized in different periods. ##### [715-30-55-134](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-134) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:34bc088e296e4f6efe967b063526f7458ac7a7882913fd916b36000da9ae4bbe Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If an employer's disposal of a component of an entity (see paragraph [715-30-55-193](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-193)) results in a termination of some employees' services earlier than expected but does not significantly reduce the expected years of future service of present employees covered by the pension plan, the effects of the reduction in the work force on the pension plan should be measured in the same manner as a curtailment (see paragraphs [715-30-35-92 through 35-93](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-92) ) to determine the gain or loss on the disposal pursuant to paragraph [205-20-45-3](https://asc.understandingaccounting.org/asc/205/20/#205-20-45-3). Although the reduction in the work force does not result in a significant reduction in the expected years of future service of present employees covered by the pension plan and, therefore, a curtailment does not occur, measuring the effects of the reduction in the work force in the same manner as a curtailment (see paragraphs [715-30-35-92 through 35-93](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-92) ) is appropriate for purposes of determining the gain or loss on the disposal. ##### [715-30-55-135](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-135) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:34d2f94baa64287c5afc95a7a3a1742166faa62df401df87259adbd5b1c69ad3 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. As part of the sale of a component of an entity there may be a transfer of a pension benefit obligation to the purchaser (that is, the purchaser assumes the pension benefit obligation for specific employees. Whether both a settlement and a curtailment occur depends on the facts and circumstances. ##### [715-30-55-136](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-136) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:0822419aa4907693ee28f5be4a4d45339b57020a67a7e6e188db858b2dc17e93 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A settlement occurs if the criteria in the definition of the term [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.") are satisfied. If there is any reasonable doubt that the purchaser will meet the pension benefit obligation assumed under the sales agreement and the seller remains contingently liable for that pension benefit obligation, a settlement does not occur. ##### [715-30-55-137](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-137) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:37424f4beebd82ae0af94962b12f7f62bea1971763643ac9227db1d4cb7edef1 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A curtailment occurs if the sale significantly reduces the expected years of future service of present employees covered by the employer's pension plan. Even if a curtailment does not occur, the effects of the reduction in the work force should be considered for purposes of determining the gain or loss on the sale. ##### [715-30-55-138](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-138) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:235f3c5f682347c04938c16f585a992a2e8f2963a4bc77f0d11284e3e8f2bbbf Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See paragraph [715-60-55-111](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-111) for a discussion of the interaction of the termination of a postretirement plan with a related increase in an employer's obligation for pension benefits. ##### [715-30-55-139](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-139) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:886920296689e4d87543b0ad481ae566c8350cdb0809c5dae2971fddf7fc5005 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The Settlement, Curtailments, and Special Terminations Subsection of Section 715-30-35 provides the general guidance on settlement transactions. The following settlement related implementation guidance is organized in three categories: 1. a Meeting the criteria for settlement 2. b Settlement measurement issues 3. c Application of accounting policy. ##### [715-30-55-140](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-140) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:c7680205cbece0433d34538a660be85591a12bd5d9b990d518b21bf155e0b0cb Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A transaction that does not meet all of the criteria in the definition of the term [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.") does not constitute a settlement for purposes of applying the guidance in the Settlement, Curtailment, and Certain Termination Benefits Subsections of this Subtopic. One of the criteria is that the transaction is irrevocable. In this context, irrevocable means that a transaction or event cannot be revoked, recalled, or undone; the transaction or event is unalterable. ##### [715-30-55-141](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-141) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:bb21fe3f4fac47b8404b64d95a56903f11d1cd52a6d392ec3dead30ad2cd2032 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For example, investing in a portfolio of high-quality fixed-income securities with principal and interest payment dates similar to the estimated payment dates of benefits may avoid or minimize certain risks. However, that does not constitute a settlement because the investment decision can be reversed and such a strategy does not relieve the employer or the plan of primary responsibility for a pension obligation, nor does it eliminate significant risks related to the obligation. ##### [715-30-55-142](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-142) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:5801871ddcb15ab9de8dadb18d265b8f92552b9c9ab7fbdb5f6349a3c55e62fe Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Another example of a transaction that does not meet the requirements for a settlement involves an employer with a situation in which all of the following occur in a period: 1. a The employer decides to terminate a pension plan and establish a successor pension plan. 2. b A [nonparticipating annuity contract](https://asc.understandingaccounting.org/glossary/n/#nonparticipating-annuity-contract "An annuity contract that does not provide for the purchaser to participate in the investment performance or in other experience of the insurance entity.") for the [vested benefits](https://asc.understandingaccounting.org/glossary/v/#vested-benefits "Benefits for which the employee's right to receive a present or future pension benefit is no longer contingent on remaining in the service of the employer. (Other conditions, such as inadequacy of the pension fund, may prevent the employee from receiving the vested benefit.) Under graded vesting, the initial vested right may be to receive in the future a stated percentage of a pension based on the number of years of accumulated credited service; thereafter, the percentage may increase with the number of years of service or of age until the right to receive the entire benefit has vested.") of all plan participants is purchased but can be rescinded if certain regulatory approvals for the termination of the pension plan are not obtained. 3. c It is determined that the regulatory approvals are probable. ##### [715-30-55-143](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-143) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:47552668566bf17984c0fd0a5545226b69c286d600cefc96b7c586f2d903dbeb Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An employer shall not recognize a settlement gain or loss until all three criteria inherent in the definition of a settlement are satisfied. In the situation described in the preceding paragraph, an irrevocable action has not occurred that relieves the employer or the pension plan of primary responsibility for a pension benefit obligation and eliminates significant risks related to the pension benefit obligation and the plan assets used to effect the settlement. Therefore, recognition of a settlement gain or loss should await completion of the irrevocable action necessary to relieve the employer or the pension plan of the primary responsibility for the pension benefit obligation. The probability of completion of the irrevocable action is not relevant. ##### [715-30-55-144](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-144) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:571eb7e2707e8a34dd15cdb99e7b3bd4a10d4b5c72c61e94443952b9ced00de8 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Another example illustrating the need to meet the criteria inherent in the definition of a settlement is a situation in which an employer decides in 20X1 to terminate its pension plan, withdraw excess plan assets, and establish a successor pension plan, but is unable to effect the transactions, which include the settlement of the [vested benefit obligation](https://asc.understandingaccounting.org/glossary/v/#vested-benefit-obligation "The actuarial present value of vested benefits."), until regulatory approval is obtained. The purchase of nonparticipating annuity contracts occurs in January 20X2 after regulatory approval has been obtained and before the 20X1 financial statements have been issued or are available to be issued (as discussed in Section 855-10-25). A settlement gain or loss is not recognized until all three criteria for a settlement are satisfied. That does not occur until January 20X2. In this situation, adjustment of the 20X1 financial statements would not be appropriate, although disclosure of the event may be required. ##### [715-30-55-145](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-145) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:06dc0f852058d08293cc6d75df78d3bb4eb027e8eb6d13480c5c84ce13599013 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An employer may withdraw excess plan assets (cash) from a pension plan and not be required to settle a pension benefit obligation as part of an asset reversion transaction. Because a settlement has not occurred, none of the net gain or loss included in accumulated other comprehensive income shall be recognized in earnings. See paragraph [715-30-55-6](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-6) for guidance on the accounting required in this situation. ##### [715-30-55-146](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-146) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:0c8c86badfe7e4e2534aef4fd90355918a07f0f3ce65801244a5b21e20269ce6 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If individual nonparticipating annuity contracts are to be used to settle a pension benefit obligation, payment of the premium for the purchase of the individual annuity contracts may be necessary before a settlement gain or loss should be recognized. The timing of the payment of the premium is relevant in assessing the critical issue, which is whether a transaction has occurred that irrevocably relieves the employer or the pension plan of primary responsibility for a pension benefit obligation and eliminates significant risks related to the pension benefit obligation and the plan assets used to effect the settlement. For a settlement gain or loss to be recognized, the insurance entity must have unconditionally undertaken a legal obligation to provide the specified pension benefits. If the premium has not been paid, the purchase of the annuity contracts may be revocable. Further, if plan assets have not been transferred by the pension plan to effect the settlement, they may be at risk. If significant risks related to the pension benefit obligation and the plan assets to be used to effect the settlement have not been eliminated, no gain or loss should be recognized. ##### [715-30-55-147](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-147) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:a09eb1a58e29a8db954636717976e1069147dacad0bddb01068387a7e5a6df81 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If individual nonparticipating annuity contracts are to be used to settle a pension benefit obligation, issuance of the individual annuity contracts may be necessary before a settlement gain or loss should be recognized. The issuance of individual annuity contracts is not the critical event but is relevant in assessing the critical issue, as stated in the preceding paragraph. However, the absence of individual annuity contracts together with an assessment of other relevant information, for example, payment of the premium as in the preceding paragraph, may indicate that only a commitment has been made to purchase annuity contracts. A commitment does not satisfy the criteria for a settlement and does not result in a settlement gain or loss. ##### [715-30-55-148](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-148) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:fd0c734b33d5ac0b536f17df1ce2f6fb29a77704d8ea4f79286f192d1813ad68 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If plan participants have agreed to accept lump-sum cash payments in exchange for their rights to receive specified pension benefits and the amounts of the payments have been fixed, payment of the cash to plan participants may be necessary before a settlement gain or loss should be recognized. As noted in paragraph [715-30-55-146](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-146), the timing of the payment is relevant in assessing whether the criteria for a settlement have been met. If the cash payments have not been made, the agreement may be revocable. Further, if plan assets have not been transferred by the pension plan to effect the settlement, they may be at risk. If significant risks related to the pension benefit obligation and the plan assets to be used to effect the settlement have not been eliminated, no gain or loss shall be recognized. ##### [715-30-55-149](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-149) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:571326877f2519c9e2ccacc21a35c3920cbd29d005d703efb77cec38fd5a1412 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A settlement does not occur if a contract is entered into with an insurance entity that requires the insurance entity to pay only a portion of specific participants' pension benefits, for example, payments due retirees for the next five years. The contract should provide life annuities, not limited-term annuities, for a settlement to occur. A contract for limited-term annuities does not eliminate significant risks related to the pension benefit obligation for the participants, for example, the duration of their pension benefit payments, and, therefore, it does not satisfy the criteria for a settlement. ##### [715-30-55-150](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-150) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:e04a59d15df12443a44471ecbe2c87d73eac8875e3b5ea76ba625362c40021e0 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Another example of a transaction that does not constitute a settlement involves a situation in which all of the following occur: 1. a An employer (or the pension plan) irrevocably purchases an insurance contract that guarantees payment of those pension benefits vested as of the date of the purchase. 2. b The purchase price of the insurance contract significantly exceeds the purchase price of a nonparticipating annuity contract covering the same pension benefits. 3. c The insurance entity receives an annual fee based on a percentage of 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 covered pension benefits to compensate it for the risk of guaranteeing those pension benefits. 4. d If a specified ratio of assets to the covered pension benefit obligation is maintained, the employer (or the pension plan) continues to manage the assets used to effect the purchase; however, the insurance contract requires that a certain percentage of the assets be invested in high-quality bonds or a dedicated bond portfolio, depending on the ratio of assets to the covered pension benefit obligation. 5. e Upon final satisfaction of all of the pension benefit obligation covered by the insurance contract and payment of all of the contract's administrative fees due to the insurance entity, the insurance entity will remit to the employer (or the pension plan) any amounts remaining in the insurance contract's account balance. Interim withdrawals from the account by the employer (or the pension plan) are also permitted with prior notification to the insurance entity unless a withdrawal causes the ratio of assets to the covered pension benefit obligation to drop below a specified percentage. ##### [715-30-55-151](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-151) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:ea360e8f1ed585f6dc03e1288bfae60437a558293f3ca21583271911bd4e2d6d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Under the terms of the contract described in the preceding paragraph, the employer remains subject to those risks and rewards described in paragraph [715-30-35-84](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-84). Accordingly, the insurance contract is a [participating annuity contract](https://asc.understandingaccounting.org/glossary/p/#participating-annuity-contract "An annuity contract that provides for the purchaser to participate in the investment performance and possibly other experience (for example, mortality experience) of the insurance entity. Under a participating annuity contract, the insurance entity ordinarily pays dividends to the purchaser.") that does not satisfy the criteria in paragraphs [715-30-35-84 through 35-88](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-84) for a settlement. ##### [715-30-55-152](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-152) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:7f4819c6fd46f95beabda150ac1826bbf04587689812a620d3b1b695bf80b543 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Delayed recognition of gains or losses in [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.") is permitted under the General Subsections of this Subtopic, because, in part, past gains or losses may be offset by future losses or gains. The Settlements, Curtailments, and Certain Termination Benefits Subsections of this Subtopic require recognition in earnings of gains or losses included in accumulated other comprehensive income when a settlement of a pension benefit obligation occurs because the basis for generating offsetting losses or gains has been altered, that is, a pension benefit obligation and the plan assets used to effect the settlement are eliminated. ##### [715-30-55-153](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-153) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:683c270e3cc0c3d13deac80cce7e27f3c76031e227ba96144c62cf386ec612f6 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The transaction in paragraph [715-30-55-150](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-150) is structured so that the plan assets and the pension benefit obligation have substantially the same ability to generate gains (or losses to the extent of the purchase price for the [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.") and the annual fees paid to the insurance entity for the guarantee of the pension benefit obligation) both before and after the insurance contract is purchased. The employer remains subject to significant risks and rewards related to the pension benefit obligation and the plan assets and, therefore, the purchase does not qualify for settlement accounting. That transaction creates, in substance, a deposit administration contract with a guarantee from the insurance entity to provide for certain pension benefits from the insurance entity's general assets, if necessary. Transactions such as those in this example are addressed in the paragraph [715-30-35-87](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-87) guidance that prohibits settlement accounting for those transactions for which the basis of generating offsetting losses or gains has not been substantially altered. ##### [715-30-55-154](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-154) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:40e1ba85a4bbb67b29843fec403dc83f7356e94672356ba36c1c142cd79389cf Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Paragraph [715-30-35-79](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-79) provides accounting guidance on the use of participating annuity contracts in settlement transactions. Under that guidance, settlement accounting is required for only certain participating annuity contracts as determined under the guidance in paragraphs [715-30-35-84 through 35-88](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-84) . ##### [715-30-55-155](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-155) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:f533b1ec6a61b97762aa4336bdfb737bc4dc5bd54e375bec4a3f017201e54c9f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. One reason for requiring settlement accounting for certain participating annuity contracts is to preclude a potential abuse. If settlement accounting was required for only nonparticipating annuity contracts, then an employer could avoid settlement accounting by purchasing what was essentially a nonparticipating annuity contract and paying a small premium for a de minimis participation right. ##### [715-30-55-156](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-156) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:e8e61a5873399c16b6ce3c7e303aca6316b832207ebb4ba63229c0f465e86d7d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Another reason is that paying a premium for a contract including a participation right rather than purchasing a nonparticipating annuity contract might be a sound economic decision that should not otherwise disqualify a transaction from settlement accounting, providing the transaction transferred the requisite level of risks and rewards from the employer to the insurance entity. However, if the terms of the participating annuity contract are such that the employer has the same or much of the same exposure to gains or losses with regard to the pension benefit obligation or the plan assets before and after the transaction, then settlement accounting is not permitted. ##### [715-30-55-157](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-157) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:8bc44f9cf8530f1e4e2c773f204d1d56a4e9f0580b952e250b649ad232a29bf6 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Example 2, Case C (see paragraph [715-30-55-209](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-209)) presents an illustration of a settlement in which participating annuities were concluded to qualify for settlement accounting. The relative cost of the participation right (10 percent) used in that Case is not intended to be an indication of a criterion that could be used to determine whether the purchase of a participating annuity contract qualifies for settlement accounting. Rather, the facts assumed in the Case were selected only to illustrate the application of paragraph [715-30-35-79](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-79). No other purpose was intended. There are no quantitative criteria that can be used to determine whether the purchase of a participating annuity contract qualifies for settlement accounting. Whether the purchase of a participating annuity contract qualifies for settlement accounting depends on the particular facts and circumstances. There are no generic, quantitative criteria that can be used. Each transaction shall be evaluated on its own merits given the general criteria provided in paragraphs [715-30-35-84 through 35-88](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-84) . ##### [715-30-55-158](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-158) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:6f2224e8afc445b0b3b8c5ab60355321e647a814823605f40ec2179d01fb0bca Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A transaction may qualify for settlement accounting in the separately issued financial statements of a subsidiary, yet not qualify in the parent entity's consolidated financial statements. For example, if a parent entity's wholly owned subsidiaries, Subsidiaries A and B, have separate pension plans and Subsidiary B purchases nonparticipating annuity contracts from Subsidiary A (which is an insurance entity) to provide the vested pension benefits under Subsidiary B's pension plan, that transaction does not constitute a settlement in the parent entity's consolidated financial statements. It does not qualify because the guidance in paragraph [715-30-35-84](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-84) excludes annuity contracts purchased from an entity that is controlled by the employer from settlement accounting as such a transaction merely shifts the risk from one part of the entity to another part of the same entity. Since significant risks related to a pension benefit obligation and the plan assets remain with the employer, which is the economic entity comprising the parent entity and its subsidiaries, a settlement does not occur. ##### [715-30-55-159](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-159) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:276e0f53bcb7e6e325a3ec420596b8fc8664ec98e7819112593beca549d73613 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Assuming the other criteria for a settlement are satisfied, the purchase of the nonparticipating annuity contracts discussed in the preceding paragraph does constitute a settlement in the separately issued financial statements of Subsidiary B, because significant risks related to a pension benefit obligation and the plan assets used to effect the settlement have been assumed by another entity that is not controlled by Subsidiary B. Disclosure of the related party nature of the settlement should be made pursuant to Section 850-10-50. ##### [715-30-55-160](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-160) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:600c4724c5f800e8d624127b87657544d5fbd361ebdcaced8c5550dc6e7280bb Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A pension plan may use a [market-related value of plan assets](https://asc.understandingaccounting.org/glossary/m/#market-related-value-of-plan-assets "A balance used to calculate the expected return on plan assets. The market-related value of plan assets is either fair value or a calculated value that recognizes changes in fair value in a systematic and rational manner over not more than five years. Different ways of calculating market-related value may be used for different classes of assets (for example, an employer might use fair value for bonds and a five-year-moving-average value for equities), but the manner of determining market-related value is required to be applied consistently from year to year for each asset class. For a method to meet the criteria of being systematic and rational, it must reflect only the changes in the fair value of plan assets between various dates.") other than fair value for purposes of determining the [expected return on plan assets](https://asc.understandingaccounting.org/glossary/e/#expected-return-on-plan-assets "An amount calculated as a basis for determining the extent of delayed recognition of the effects of changes in the fair value of plan assets. The expected return on plan assets is determined based on the expected long-term rate of return on plan assets and the market-related value of plan assets.") under the guidance in paragraph [715-30-35-51](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-51). That basis shall not be used in determining the maximum gain or loss subject to pro rata recognition in earnings when a pension benefit obligation is settled. The fair value of plan assets as of the date of settlement shall be used. ##### [715-30-55-161](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-161) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:a5a15becbec4be5dc13bc154d9bea0d62b2097776b15ed7571d2051c6ec062d7 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An employer may settle a pension benefit obligation and withdraw excess plan assets as part of terminating its pension plan. The settlement gain or loss determined pursuant to paragraph [715-30-35-79](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-79) should not be adjusted to eliminate any gains or losses included in accumulated other comprehensive income relating to securities issued by the employer if those securities are included in the plan assets withdrawn. In this situation, the settlement of a pension benefit obligation, not the withdrawal of plan assets, is the event that requires the employer to recognize in earnings any of the net gain or loss included in accumulated other comprehensive income. Further, withdrawal of plan assets does not affect the determination of the settlement gain or loss. Likewise, the nature of the plan assets withdrawn does not affect that determination. Whether the securities are sold by the pension plan and the employer repurchases them in the market with cash withdrawn from the pension plan or whether the securities are withdrawn should not affect the determination of the settlement gain or loss. ##### [715-30-55-162](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-162) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:ef0be6286362dc4b1a56c0eacbba95c8bd9b0557efcd4218a40a8ef18377fa32 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If nonparticipating annuity contracts are purchased from a less-than-majority-owned investee that is not controlled by the employer and the criteria for a settlement are satisfied, the resulting settlement gain or loss is not subject to partial recognition (that is, it should not be reduced to reflect the employer's ownership). The employer's noncontrolling ownership interest in the insurance entity that issues the nonparticipating annuity contracts does not affect the accounting for the settlement. Therefore, the entire settlement gain or loss should be recognized in earnings. The treatment of this intra-entity transaction is acknowledged to be a departure from traditional accounting under the equity method and is not intended to be a precedent for nonpension intra-entity transactions. ##### [715-30-55-163](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-163) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:64915e99bdd412bc048c3fa24d6202ba8a2e0057a542fe1adb6dfe38e09562ae Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The interest rates implicit in the purchase price of nonparticipating annuity contracts used to effect a settlement may be different from the assumed discount rates used to determine net periodic pension cost. If the rates are different, the employer should measure the portion of 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).") being settled and the remaining portion, if appropriate, using the implicit annuity interest rates. Consequently, the measurement of the portion of the projected benefit obligation being settled is the purchase price of the nonparticipating annuity contracts. Any gains or losses resulting from measuring the projected benefit obligation and the plan assets are included in the maximum gain or loss subject to pro rata recognition in earnings before the settlement gain or loss to be recognized is determined. In determining whether it is appropriate to measure the unsettled portion of the projected benefit obligation using the implicit annuity interest rates, consideration should be given to the demographics of the participants related to the settled and unsettled portions of the projected benefit obligation. If the demographics are similar and, therefore, there is a similar length of time until payments are due and the implicit annuity interest rates reflect the best estimate of the rates at which the unsettled portion could be effectively settled (as discussed in paragraphs [715-30-35-43 through 35-46](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-43) ), then it is appropriate to measure the unsettled portion of the projected benefit obligation using those rates. If use of those rates is not appropriate, then rates as of the date of the settlement that do satisfy the requirements of those paragraphs shall be used to measure the unsettled portion of the projected benefit obligation. ##### [715-30-55-164](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-164) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:0eb61cc8cec4265c3e101bb0afd2f1e93bd2f6b788b97f4bf803385bd5ab2418 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Paragraph [715-30-35-79](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-79) provides accounting guidance on the use of participating annuity contracts in settlement transactions. Example 2, Case C (see paragraph [715-30-55-209](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-209)) illustrates a settlement transaction using participating annuity contracts and a method that determines the maximum gain subject to pro rata recognition in earnings by first reducing the net gain included in accumulated other comprehensive income by the cost of the participation right. The allocation method illustrated in that Case is not the only permitted method that may be used. In determining the maximum gain subject to pro rata recognition in earnings, any of the following alternative methods may be used, provided the approach selected is applied consistently from year to year. An amount equal to the cost of the participation right could be allocated in any of the following ways: 1. a Initially to the transition asset remaining in accumulated other comprehensive income 2. b Initially to the net gain included in accumulated other comprehensive income 3. c On a pro rata basis to the transition asset remaining in accumulated other comprehensive income and the net gain included in accumulated other comprehensive income. ##### [715-30-55-165](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-165) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:080cbfd5fdeaa588c406664d5969c6dc8c329c255cf9ab52a7a3692ff1e29fd4 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Because the allocation method can affect the determination of subsequent periods' net periodic pension cost, allocation on a pro rata basis (alternative \[c\] in the preceding paragraph) is recommended because it is an unbiased approach. ##### [715-30-55-166](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-166) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:819f08983367b7a5f64e5b2d9613e0426d3a89c10be50c75d82280b5e32823b2 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Paragraph [715-30-35-82](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-82) requires recognition in earnings of gains or losses from settlements if the cost of all settlements during a year is greater than the sum of the service cost and interest cost components of net periodic pension cost and permits such recognition if the cost of settlements is less, as long as the policy is applied consistently. As an example of an acceptable accounting policy, an employer may adopt a policy that requires recognition in earnings of gains or losses from all settlements during the year for a pension plan if the cost of those settlements exceeds the service cost component of net periodic pension cost for that pension plan for the year. ##### [715-30-55-167](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-167) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:6219fe5d32e80fe9da8fd555c386bcf43499de236cc6d9e609acccafb2980485 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A settlement gain or loss may need to be recognized as a change in accounting estimate following the guidance in Topic 250 as in the following situation. Assume that an employer's accounting policy is not to recognize in earnings a gain or loss from a settlement if the cost of all settlements during the year does not exceed the sum of the service cost and interest cost components of net periodic pension cost for the pension plan for the year and all of the following occur: 1. a It is estimated at the beginning of the year that the cost of all settlements during the year will not exceed the threshold amount described. 2. b A pension benefit obligation is settled during the first quarter and a settlement gain or loss is not recognized. 3. c In the second quarter and after the issuance of the first quarter's interim report, it is determined that the cost of all settlements during the year will exceed the threshold amount. ##### [715-30-55-168](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-168) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:7099835a60320fcf8399e5956da34de2c4d8ee200fcf10463d2380857cd834aa Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In the situation described in the preceding paragraph, the settlement gain or loss should be recognized in the second quarter consistent with the accounting for a change in accounting estimate as required by paragraphs [250-10-45-17](https://asc.understandingaccounting.org/asc/250/10/#250-10-45-17) and [270-10-45-14](https://asc.understandingaccounting.org/asc/270/10/#270-10-45-14). ##### [715-30-55-169](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-169) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:aa235939d5a5d90c4bb5f78fb793f557f2cd08f120613f9840e6f1362dddd56e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The Settlements, Curtailments, and Special Term Benefits Subsection of Section 715-30-35 provides the general guidance on curtailment transactions. The following curtailment-related implementation guidance is organized in two categories: 1. a Meeting the criteria for curtailment 2. b Curtailment measurement issues. ##### [715-30-55-170](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-170) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:c8a7f7acb826e39af4023ed5e3b0946aa80a3c6dc75e4858b6601d030c98c23f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In the definition of the term [plan 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."), there is no specific threshold for determining if an event results in a significant reduction of expected years of future service of present employees covered by a pension plan or an elimination of the accrual of pension benefits for some or all future services of a significant number of employees covered by a pension plan. Judgment shall be applied to determine what is significant for each pension plan (the unit of accounting) based on the facts and circumstances. For example, an employer may have a pension plan covering employees in several divisions. The employer terminates employees in one of those divisions and the expected years of future service of present employees in that division are reduced significantly, but the reduction is not significant in relation to the expected years of future service of all employees covered by the pension plan. Because the event involves an insignificant reduction of expected years of future service of present employees covered by the pension plan, a curtailment does not occur. The results of the event are a gain or loss as described in paragraphs [715-30-35-18 through 35-19](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-18) that is subject to the requirements of paragraphs [715-30-35-24 through 35-25](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-24) . ##### [715-30-55-171](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-171) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:3a3c5a23e90819de9cb6bf011f35779dffad9b6804ab2ab897f75d94abb0f19b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If a layoff significantly reduces the expected years of future service of present employees covered by a pension plan, a curtailment occurs even if the layoff is expected to be temporary. For example, a curtailment occurs in both of the following actions: 1. a The employer temporarily lays off a significant number of present employees covered by a pension plan. 2. b The employer temporarily suspends a pension plan so that employees covered by the pension plan do not earn additional pension benefits for some or all of their future services. ##### [715-30-55-172](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-172) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:4dec716d4717745a3a32da64a80fde3d3507e598b00cf7ead6dfa3d22b9d934c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Likewise, if a pension [plan suspension](https://asc.understandingaccounting.org/glossary/p/#plan-suspension "An event in which the pension plan is frozen and no further benefits accrue. Future service may continue to be the basis for vesting of nonvested benefits existing at the date of suspension. The plan may still hold assets, pay benefits already accrued, and receive additional employer contributions for any unfunded benefits. Employees may or may not continue working for the employer.") eliminates significant pension benefit accruals for some or all of present employees' future services, a curtailment occurs even if the pension plan suspension is expected to be temporary. Unrelated, individually insignificant reductions of expected years of future service of employees covered by a pension plan that accumulate over a single year or more than one year to a significant reduction do not constitute a curtailment. However, each of the reductions results in a gain or loss as described in paragraphs [715-30-35-18 through 35-19](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-18) that is subject to the requirements of paragraphs [715-30-35-24 through 35-25](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-24) . This evaluation is in contrast to the situation in which individually insignificant reductions of expected years of future service of employees covered by a pension plan are caused by one event, such as a strike, or are related to a single plan of reorganization and those reductions accumulate during more than one fiscal year to a significant reduction. The fact that the reductions occur over a period of time in this situation does not affect the determination that an event giving rise to a curtailment has occurred. ##### [715-30-55-173](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-173) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:1ad6be0639f59181c70cc2d803b73db41fd50ca74625cfcf05b9cc74f3a6f932 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Paragraph [715-30-55-130](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-130) points out that the guidance in the Settlements, Curtailments, and Certain Termination Benefits Subsections of this Subtopic on settlements and curtailments is affected by whether there is a successor pension plan. If an employer terminates a pension plan and establishes a successor pension plan that provides additional but reduced pension benefits for all years of employees' future service, a curtailment does not occur. If the successor pension plan provides incremental but reduced pension benefits for all years of employees' future service, the substance of the transactions is to maintain the same pension plan but with reduced pension benefits. Accordingly, the reduction in pension benefits is accounted for as a negative pension plan amendment. See the guidance in paragraph [715-30-55-54](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-54) related to a negative retroactive plan amendment. In this situation, pension benefits are reduced but not eliminated since employees continue to accrue pension benefits for all years of future service. ##### [715-30-55-174](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-174) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:bf41629feff3d6c7ad6ddcf32739b9b6bc66e02d130069c1a75818f9e812d4aa Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A curtailment can occur if a pension plan is terminated and replaced by a successor pension plan under certain conditions. A curtailment occurs if the successor pension plan eliminates for a significant number of employees the accrual of defined pension benefits for some or all of their future services. Two examples follow: 1. a A successor pension plan that covers only half of the employees previously covered by the terminated pension plan. The reference to half of the employees in this example is for illustrative purposes only and is not intended to be indicative of the minimum coverage necessary to qualify a pension plan as a successor pension plan. See paragraph [715-30-55-130](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-130). 2. b A successor pension plan that does not provide for the accrual of additional defined pension benefits for certain years of future services. To illustrate this situation, assume a pension plan provides a flat benefit of $1,500 per year of service. At the end of 20X0, the employer terminates that pension plan and establishes a successor pension plan that provides a flat benefit of $1,000 per year for all years of service, including service under the terminated pension plan. Pension benefits earned under the successor pension plan are reduced by the pension benefits earned under the terminated pension plan. At the end of 20X0, Employee A with 5 years of service has an accumulated pension benefit of $7,500 per year under the terminated pension plan ($1,500 x 5 years of service). For years 20X1, 20X2, and the first half of 20X3, Employee A will accrue no additional pension benefits. The accrual of additional pension benefits will commence in the second half of 20X3. If a significant number of employees will not accrue additional pension benefits for some or all of their future services (as is the situation for Employee A), a curtailment occurs. ##### [715-30-55-175](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-175) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:9408411b972866b3d5c25570abf00b1f347005baa692e6ff12f9ca0e997e18b3 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An employer is permitted to amortize [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.") on a straight-line basis over the average remaining service period of employees expected to receive the related pension benefits under the guidance in paragraph [715-30-35-13](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-13) in order to reduce the complexity and detail of the computations that would otherwise be required by the guidance in paragraph [715-30-35-11](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-11). ##### [715-30-55-176](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-176) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:25cfc8aaae6a361aea28706293adfc469ed18b7ef1841bc4ca30c23fafe26294 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Paragraph [715-30-35-92](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-92) specifies that the prior service cost included in accumulated other comprehensive income associated with years of service no longer expected to be rendered as a result of a curtailment is a loss. Even if the employer uses an [amortization](https://asc.understandingaccounting.org/glossary/a/#amortization "The process of reducing a recognized liability systematically by recognizing gains or by reducing a recognized asset systematically by recognizing losses. In accounting for pension benefits or other postretirement benefits, amortization also means the systematic recognition in net periodic pension cost or other postretirement benefit cost over several periods of amounts previously recognized in other comprehensive income, that is, gains or losses, prior service cost or credits, and any transition obligation or asset.") method permitted by paragraph [715-30-35-13](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-13) (such as straight-line amortization over average remaining service period, as described in the preceding paragraph) rather than the approach described in paragraph [715-30-35-11](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-11), the basic approach in paragraph [715-30-35-92](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-92) should be retained. In that situation, the ability to associate prior service cost included in accumulated other comprehensive income with years of service no longer expected to be rendered is more difficult and the result may be less precise. Use of the percentage reduction of years of service after the curtailment may be necessary. For example, if the future years of service determined as of the immediately preceding measurement date for those employees covered under a prior pension plan amendment are reduced by 50 percent due to a curtailment, the employer would recognize in earnings 50 percent of the prior service cost included in accumulated other comprehensive income. ##### [715-30-55-177](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-177) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:f3c3e771abb448a9aa6cb582302715858e8aee9ab2cd640aa69058a4308607dc Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A curtailment may occur because an employer terminates or suspends a pension plan, so that employees do not earn additional pension benefits for future service, but the employees continue to work for the employer. In such a situation, any prior service cost included in accumulated other comprehensive income associated with the employees affected by the pension plan termination or suspension shall be included in determining the net gain or loss to be recognized for the curtailment. ##### [715-30-55-178](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-178) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:2dcca70db7e0e373c73c767876d50c171af71ca79218dc6cd7b83446a5f2df58 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. One reason that this Subtopic provides for delayed recognition in net periodic pension cost of prior service cost is the likelihood of future economic benefits to the employer as a result of a retroactive pension plan amendment. Those pension benefits are associated with the future services of those employees at the date of the pension plan amendment who are expected to receive pension benefits under the pension plan. Because a pension plan termination (or suspension) eliminates the accrual of pension benefits for all (or some) of those future services, it raises sufficient doubt about the continued existence of the future economic benefits of the retroactive pension plan amendment to justify recognition in earnings of any prior service cost included in accumulated other comprehensive income. Further, upon termination of a pension plan without the establishment of a successor pension plan, all remaining items included in accumulated other comprehensive income are recognized in earnings. ##### [715-30-55-179](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-179) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:cfc866253537c5c4affeccaeb3467dee13d453e5e1a69f2150ef5931b63fdc5c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Paragraph [715-30-55-171](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-171) provides that a curtailment may result even if a layoff or suspension of benefits is temporary. If a curtailment is due to a pension plan suspension that may be only temporary, for example, the pension plan suspension will end as soon as the employer's financial condition sufficiently improves, the net gain or loss from the curtailment shall be determined based on the [probable](https://asc.understandingaccounting.org/glossary/p/#probable "The future event or events are likely to occur.") duration of the pension plan suspension. If that duration is a range of years and no single period in that range is a better estimate than any other period, then the determination shall be based on the estimate of duration within that range that results in the minimum net gain or loss from the curtailment. ##### [715-30-55-180](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-180) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:49a64e4bbadf5206ee6aaecc3a5bb6918984cfec3c60fa68a9856df65bc7aa2d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. There may be a balance remaining of the transition asset or obligation included in accumulated other comprehensive income after the employer accounts for a curtailment as required by the Settlements, Curtailments, and Certain Termination Benefits Subsections of this Subtopic. If a curtailment occurs causing almost all of the pension plan's participants to become permanently inactive, the employer shall continue to amortize any transition asset or obligation remaining in accumulated other comprehensive income using the remainder of the amortization period determined at transition. ##### [715-30-55-181](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-181) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:5bf1ebfe2eb28133476ca893c6d75f1e93306d790b4a4756dc73f952315797c0 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Paragraph [715-30-35-93](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-93) describes the determination of any curtailment gain or loss, including the effect of certain amounts in accumulated comprehensive income. It is possible that both a transition asset remains in accumulated other comprehensive income and a larger (smaller) net loss included in accumulated other comprehensive income exists at the date of a curtailment that decreases (increases) the projected benefit obligation. However, the intent of that paragraph is not to provide a mechanism for offsetting a net loss included in accumulated other comprehensive income against any transition asset remaining in accumulated other comprehensive income or increasing a net loss included in accumulated other comprehensive income. Therefore, the decrease (increase) in the projected benefit obligation that is not recognized as a curtailment gain (loss) shall be offset against the net loss included in accumulated other comprehensive income (transition asset remaining in accumulated other comprehensive income). There shall be no further offsetting. See Example 4 (paragraph [715-30-55-216](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-216)) for an illustration of this guidance. ##### [715-30-55-182](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-182) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:5bbc43531ee6c9365f5de91552872ad57615476bcf67786e352b6e6c5b48fb63 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If both a transition asset remaining in accumulated other comprehensive income and a net gain included in accumulated other comprehensive income exist at the date of a curtailment that increases the projected benefit obligation, the effects of the curtailment shall be offset using any one of the following three approaches, provided it is applied consistently from year to year. However, for the reason noted in paragraph [715-30-55-208](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-208) on settlement accounting, the recommended approach is to offset both on a pro rata basis (alternative \[c\]). The three approaches for offsetting the curtailment are as follows: 1. a Initially against the transition asset remaining in accumulated other comprehensive income 2. b Initially against the net gain included in accumulated other comprehensive income 3. c Against both on a pro rata basis. ##### [715-30-55-183](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-183) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:66f4aa3fd49947170f135d0d3682bffcb821cb2cf037ad191adaac05f2ee1e7c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An employer may adopt a plan to terminate employees that will significantly reduce the expected years of future service of present employees covered by a pension plan and the sum of the effects of the resulting curtailment identified in paragraphs [715-30-35-92 through 35-93](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-92) may be expected to be a net gain. In this situation, the net gain from the curtailment shall be measured and recognized when the related employees terminate. ##### [715-30-55-184](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-184) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:55e03901fa51c22738cdf402b04b70b6d8061afb9fd8110b4c813ccba04e8598 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If an employer amends its pension plan to provide for its termination or suspension and thereby eliminates for a significant number of employees the accrual of all or some of the pension benefits for their future services after a subsequent date (that is, the effective date of the pension plan termination or suspension is after the amendment date) and the sum of the effects of the resulting curtailment identified in paragraphs [715-30-35-92 through 35-93](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-92) is a net gain, that gain shall not be recognized in earnings when the pension plan termination or suspension is effective, but rather the net gain from the curtailment should be measured and recognized in earnings when the employer amends its pension plan. ##### [715-30-55-185](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-185) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:71c295fabedb572a62701f462de15e47b548ad9bc7e7f8c55ec31fd82298a2a5 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Paragraphs [715-30-25-9 through 25-13](https://asc.understandingaccounting.org/asc/715/30/#715-30-25-9) provide general guidance on special termination benefits and contractual termination benefits. ##### [715-30-55-186](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-186) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:f6136fe112896253a2b7faa638d0215c71acd385ec46f801d961610120f32981 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An employer that offers, for a short period of time, special termination benefits to employees, shall not recognize a loss at the date the offer is made based on the estimated acceptance rate. Paragraph [715-30-25-10](https://asc.understandingaccounting.org/asc/715/30/#715-30-25-10) requires offers of special termination benefits to be recognized when the employees accept the offer and the amount can be reasonably estimated. ##### [715-30-55-187](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-187) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:dfed9039a49fee82fb528fbd3491c1bbd17b8ae213168b686e50ce8444b98eb9 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An employer may offer special termination benefits that result in a curtailment. It is possible that the offer of termination benefits could be recognized in a reporting period different from the period in which the curtailment is recognized because a net loss from a curtailment (as defined in paragraph [715-30-35-94](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-94)) is recognized when it is probable that a curtailment will occur and the effects are reasonably estimable, while as indicated in paragraph [715-30-25-10](https://asc.understandingaccounting.org/asc/715/30/#715-30-25-10), the cost of special termination benefits is not recognized until employees accept the offer and the amount can be reasonably estimated. ##### [715-30-55-188](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-188) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:6b4b9010070dd57d0211dd695226181d3521118c0450cec84c29084c3b12daa6 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An employer may sponsor a pension plan that provides supplemental early retirement benefits. Such pension benefits shall not be accounted for as contractual termination benefits, rather, supplemental early retirement benefits shall be accounted for as part of net periodic pension cost pursuant to the [attribution](https://asc.understandingaccounting.org/glossary/a/#attribution "The process of assigning pension or other postretirement benefits or costs to periods of employee service.") approach described in paragraphs [715-30-35-36 through 35-38](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-36) . ##### [715-30-55-189](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-189) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:a446c8374b9027a630bfef4ec4977bf9308323bccc8a3fbf9fdc452e92aaadad Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Plans providing [termination indemnities](https://asc.understandingaccounting.org/glossary/t/#termination-indemnities "Arrangements, usually or more frequently encountered outside the United States, that are also referred to as termination allowances or severance indemnities. Termination indemnities are amounts payable to eligible employees upon termination of employment. Eligibility may be determined by law, by local custom, by the employer's policy, or by contract with the employer. Plans may or may not be in writing. Termination indemnities are normally, but not exclusively, associated with preretirement severance of employment. They are usually payable as a lump sum, or occasionally in a few payments over a short period of time.") that are associated with preretirement termination of employment shall be assessed on a case-by-case basis. If benefits are paid only for involuntary termination of employment due to the occurrence of a specific event, they qualify as contractual termination benefits, and a liability and a loss shall be recognized when it is probable that employees will receive benefits and the amount can be reasonably estimated. However, if a plan is, in substance, a pension plan (for example, if benefits are paid for virtually all terminations), the plan is subject to the provisions of the General Subsections of this Subtopic. See paragraphs [420-10-55-1](https://asc.understandingaccounting.org/asc/420/10/#420-10-55-1) and [420-10-55-16](https://asc.understandingaccounting.org/asc/420/10/#420-10-55-16) for additional guidance in making this determination. However, if payment of the benefits results directly from a sale or disposal of a component of an entity, the cost of those benefits shall be recorded and recognized pursuant to paragraph [205-20-45-3](https://asc.understandingaccounting.org/asc/205/20/#205-20-45-3). ##### [715-30-55-190](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-190) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:aaaaa68f59b6a830b2d3f06fd50819b1a121de394b40e253dc53e13d22b7294b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In connection with terminating its pension plan, an employer may settle the pension benefit obligation and withdraw excess plan assets and then contribute and allocate those assets to participants' accounts in a new defined contribution pension plan. In this situation, an employer shall not combine any net gain or loss from the settlement and curtailment of the terminated plan with the net periodic pension cost from the contribution to the defined contribution pension plan and thereby report both on a net basis for purposes of classification in the income statement or disclosure in accompanying notes to financial statements. Because the following two separate events have occurred that require separate accounting recognition, netting the results of the separate events is inappropriate: 1. a A pension plan termination resulting in recognition in earnings of all net pension amounts included in accumulated other comprehensive income 2. b A contribution of assets to a defined contribution pension plan resulting in recognition of net periodic pension cost equal to the amount contributed and allocated. ##### [715-30-55-191](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-191) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:611889f34ca8864cb037f59019dca2393b9e9221c77c7fe8159cb967ff35c0b2 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2015-01](https://asc.understandingaccounting.org/updates/asu-2015-01/). ##### [715-30-55-192](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-192) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:e2b10fe55a3fbf58b1a348f0756fa7bc62bf45d30942d3d67e94f9abc450db15 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2015-01](https://asc.understandingaccounting.org/updates/asu-2015-01/). ##### [715-30-55-193](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-193) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:f9fe53edd8926c1c1a5615342445ca768a84dab5bda9ed2c2cdfda27c54746c3 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An employer may sell a [component of an entity](https://asc.understandingaccounting.org/glossary/c/#component-of-an-entity "A component of an entity comprises operations and cash flows that can be clearly distinguished, operationally and for financial reporting purposes, from the rest of the entity. A component of an entity may be a reportable segment or an operating segment, a reporting unit, a subsidiary, or an asset group.") and may settle a pension benefit obligation related to the employees affected by the sale. The separate classification of the settlement gain or loss, recognized pursuant to paragraphs [715-30-35-79 through 35-83](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-79) , in discontinued operations requires an evaluation of the facts and circumstances. ##### [715-30-55-194](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-194) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:a26c5381a4708d84069716be3b3e4bf0d2bcf9ef49fc92d67d14baa8fbb2432f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Paragraph [205-20-45-5(c)](https://asc.understandingaccounting.org/asc/205/20/#205-20-45-5) indicates that a settlement is directly related to the disposal transaction if there is a demonstrated cause-and-effect relationship and the settlement occurs no later than one year following the disposal transactions, unless it is delayed by events or circumstances beyond an entity's control. In a disposal of a component of an entity, the timing of a settlement may be at the discretion of the employer. If the employer simply chooses to settle a pension benefit obligation at the time of the sale, the resulting coincidence of events is not, in and of itself, an indication of a cause-and-effect relationship and, therefore, paragraphs [715-30-35-79 through 35-83](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-79) apply. However, a direct cause-and-effect relationship can be demonstrated if, for example, settlement of a pension benefit obligation for those employees affected by the sale is a necessary condition of the sale. ##### [715-30-55-195](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-195) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:af484e5978ac2b32f6364c9be7bc7e5ed5c4b1d7d6a2477ffab52b436300f00c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A settlement or a curtailment may occur as a direct result of a disposal of a component of an entity or a business or nonprofit activity. Paragraph [715-30-35-94](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-94) requires that a curtailment loss be recognized in earnings when it is probable that the curtailment will occur and related amounts are reasonably estimable. Therefore, although a reporting entity may not have satisfied all the criteria in paragraphs [205-20-45-1A through 45-1D](https://asc.understandingaccounting.org/asc/205/20/#205-20-45-1A) necessary to classify the operations of the component or business or nonprofit activity as discontinued operations, a curtailment loss (determined in accordance with paragraphs [715-30-35-92 through 35-93](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-92) ) shall be recognized if it is probable that the disposal will occur and the amount of the curtailment loss is reasonably estimable. Furthermore, paragraph [715-30-35-94](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-94) requires that a curtailment gain be recognized in earnings when the related employees terminate or the plan suspension or amendment is adopted. The curtailment gain or loss shall be classified in income from continuing operations until the reporting entity satisfies those criteria in paragraphs [205-20-45-1A through 45-1D](https://asc.understandingaccounting.org/asc/205/20/#205-20-45-1A) for reporting discontinued operations. ##### [715-30-55-196](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-196) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:cff2583d1ab54fb4989f556b8f994059ed9189eb5e916bb271dce9a660b2a50b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A settlement gain or loss is recognized in earnings at the time that the settlement occurs. If a pension obligation associated with the disposal group is settled upon or after meeting the criteria for reporting discontinued operations in paragraphs [205-20-45-1A through 45-1D](https://asc.understandingaccounting.org/asc/205/20/#205-20-45-1A) , the related gain or loss (determined in accordance with paragraph [715-30-35-79](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-79)) shall be recognized in earnings in the period in which the settlement occurs and classified in discontinued operations provided that the settlement is directly related to the disposal transaction. ##### [715-30-55-197](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-197) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:651f80ac17d2ffad4c78fbec4b389b7734fdd064049f275b9a3cfc24cf484639 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If a curtailment loss results from the disposal of a component of an entity, it is likely that the curtailment loss will be recognized earlier than the settlement gain or loss, if any, is recognized. As indicated in paragraph [715-30-55-195](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-195), the curtailment loss, if reasonably estimable, shall be recognized when the disposal is probable. The settlement gain or loss, if any, however, shall be recognized when the settlement occurs. See Example 9, Case A (paragraph [715-30-55-247](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-247)) for an illustration in which the curtailment loss is recognized earlier than the settlement gain. See also Example 9, Case B (paragraph [715-30-55-250](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-250)), which demonstrates the less likely scenario in which the effects of the curtailment and the settlement are recognized in the same reporting period. #### Illustrations ##### [715-30-55-198](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-198) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:2b498d93d4fe620f80d29608ee0b8d42fd67528b83df5569a4f38fe65734b183 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Example illustrates the guidance in paragraph [715-30-35-78](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-78) relating to accounting for a plan termination without a replacement defined benefit plan. ##### [715-30-55-199](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-199) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:68afc4968069ab08925ff41702a87cd9f591438efa1f64f117f3d6f112abfaa6 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In this Example, it is assumed that Entity A sponsored a final-pay noncontributory defined benefit plan. On November 16, 20X0, the employer terminated the plan, settled the [accumulated benefit obligation](https://asc.understandingaccounting.org/glossary/a/#accumulated-benefit-obligation "The actuarial present value of benefits (whether vested or nonvested) attributed, generally by the pension benefit formula, to employee service rendered before a specified date and based on employee service and compensation (if applicable) before that date. The accumulated benefit obligation differs from the projected benefit obligation in that it includes no assumption about future compensation levels. For plans with flat-benefit or non-pay-related pension benefit formulas, the accumulated benefit obligation and the projected benefit obligation are the same.") of $1,500,000 (nonvested benefits became vested upon termination of the plan) by purchasing nonparticipating annuity contracts, and withdrew excess assets. Defined benefits were not provided under any successor plan. The plan ceased to exist as an entity. ##### [715-30-55-200](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-200) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:848ddd9dc3e5ec079ce0dc1415e8239ba8932ef8ebfa89f6ed128c4412679b09 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. As a result, Entity A recognized a gain of $900,000 in earnings, determined as follows. - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-2438C54A-EED9-4C17-B6B6-3A24B3DA553D-low.gif) Entity A (in thousands) Before Termination Effect of Termination After Termination Assets and obligations: Accumulated benefit obligation " $(1,500)" " $1,500 " (a) $- Effects of projected future compensation levels (400) 400 (b) - Projected benefit obligation " (1,900)" " 1,900 " - Plan assets at fair value " 2,100 " " (1,500)" (a) (600) (c) - Funded status and recognized asset $200 $(200) $- Amounts recognized in accumulated other comprehensive income: "Transition asset (d),(e)" $(200) $200 $- Net gain (e) (300) 300 - $(500) $500 $- (a) "The accumulated benefits of $1,500 were settled by using an equivalent amount of plan assets to purchase nonparticipating annuity contracts." (b) "The effects of projected future compensation levels ceased to be an obligation of the plan or the employer due to the termination of all plan participants. Paragraph 715-30-35-93 requires that any curtailment gain be first offset against any existing net loss included in accumulated other comprehensive income. Because the existing amount included in accumulated other comprehensive income in this case was a gain ($200 remaining transition asset plus $300 net gain), the $400 gain from the curtailment was recognized." (c) "Plan assets, in excess of the amount used to settle the pension benefits, were withdrawn from the plan." (d) A transition asset remaining in accumulated other comprehensive income is treated as a net gain. (e) "A pro rata amount of the maximum gain (see paragraph 715-30-35-79), which includes the net gain included in accumulated other comprehensive income ($300) and the transition asset remaining in accumulated other comprehensive income ($200), is recognized due to settlement. The projected benefit obligation was reduced from $1,500 to $0 (the curtailment initially reduced the projected benefit obligation from $1,900 to $1,500 as described in footnote \[b\]), a reduction of 100 percent. Accordingly, the entire amount included in accumulated other comprehensive income of $500 ($300 + $200) was recognized in earnings." The journal entry required to reflect the accounting for the plan termination follows. Cash $600 Other comprehensive income-transition asset 200 Other comprehensive income-net gain 300 Pension asset $200 Gain from plan termination 900 The gain from the plan termination without a replacement defined benefit plan was composed of the following. Gain from curtailment $400 Gain from settlement 500 Total gain $900 ##### [715-30-55-201](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-201) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:0b1a81eb8b9eecfd64dec27ec587fc70e82b834c8f58092c592919a498695b88 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Paragraph [715-30-35-81](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-81) requires that plan assets and the projected benefit obligation be measured as of the date the settlement occurs. The amount of the accumulated benefit obligation settled and the amount of plan assets used to purchase nonparticipating annuity contracts are equal in this, and certain other settlement-related Examples in this Subsection. It is not appropriate to conclude that no gains or losses occurred when the projected benefit obligation and the plan assets were measured as of the date of the settlement. The columns representing amounts before the transactions in the Examples reflect the plan assets and the projected benefit obligation as of the date of the settlement and include any gains or losses that arose from the measurements as of that date. ##### [715-30-55-202](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-202) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:3bdd4c12286f6479c44013bea51ebd8d2e4c3b534bac552dede8e441cbe92fb7 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Example illustrates the accounting for a settlement of a pension obligation in three specific situations following the settlement-related guidance in the Settlements, Curtailments, and Certain Termination Benefits Subsection of Section 715-30-35. The following Cases illustrate situations in which: 1. a The projected benefit obligation exceeds plan assets (Case A). 2. b Plan assets exceed the projected benefit obligation (Case B). 3. c Plan assets exceed the projected benefit obligation and a participating annuity contract is purchased to settle benefits (Case C). ##### [715-30-55-203](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-203) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:76f3bacace838cef7bad40f487ce95943a28fe26decce1f1880039b10bf7376a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In each Case, the entity settled a portion of the obligation after transition to the requirements of this Subtopic. The Cases differ based on whether they had a retroactive plan amendment after transition or not and whether they had a transition asset or a transition obligation remaining in accumulated other comprehensive income. ##### [715-30-55-204](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-204) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:985eebffdfb2b941bc21075280eba18f91665a72e4fb3860a58970a3c7c65442 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Case illustrates the settlement of a pension obligation for a situation in which the projected benefit obligation exceeds plan assets. In this Case, Entity A had a retroactive plan amendment after the transition to the requirements of this Subtopic and also had a transition obligation remaining in accumulated other comprehensive income. ##### [715-30-55-205](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-205) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:32437b457802c849a427e9397ba4f993c79739a653bc780e3ab765254c85afb2 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Entity A sponsors a final-pay noncontributory defined benefit plan. On December 31, 20X0, the plan settled the vested benefit portion ($1,300,000) of the projected benefit obligation through the purchase of nonparticipating annuity contracts. As a result, Entity A recognized a gain of $195,000 in earnings, determined as follows. - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-CC61BA8C-116E-4BC4-8C30-8C595676D6BB-low.gif) Entity A (in thousands) Before Settlement Effect of Settlement After Settlement Assets and obligations: Vested benefit obligation " $(1,300)" " $1,300 " (a) $- Nonvested benefits (200) (200) Accumulated benefit obligation " (1,500)" " 1,300 " (200) Effects of projected future compensation levels (500) (500) Projected benefit obligation " (2,000)" " 1,300 " (700) Plan assets at fair value " 1,400 " " (1,300)" (a) 100 Funded status and recognized liability $(600) $- $(600) Amounts recognized in accumulated other comprehensive income: Transition obligation (b) $650 $650 Prior service cost 150 150 Net gain (c) (300) $195 (105) $500 $195 $695 (a) "The vested benefits of $1,300 were settled by using plan assets to purchase nonparticipating annuity contracts." (b) A transition obligation remaining in accumulated other comprehensive income is treated as prior service cost included in accumulated other comprehensive income and therefore is not affected by settlement of the obligation. (c) "A pro rata portion of the maximum gain (see paragraph 715-30-35-79), the net gain included in accumulated other comprehensive income, is recognized due to the settlement. The projected benefit obligation was reduced from $2,000 to $700, a reduction of 65 percent. Accordingly, 65 percent of the maximum gain of $300, a gain of $195, was recognized in earnings. The journal entry required to reflect the accounting for the plan settlement follows." Other comprehensive income-net gain $195 Gain from settlement $195 ##### [715-30-55-206](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-206) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:dc90bda669679242d888025bc91bc6b7a6ec8da931d0212a6a001c44ac5c5eac Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Case illustrates the settlement of a pension obligation for a situation in which the plan assets exceed the projected benefit obligation. In this Case, Entity B did not have a retroactive plan amendment after the transition to the requirements of this Subtopic but did have a transition asset remaining in accumulated other comprehensive income. ##### [715-30-55-207](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-207) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:03386a75a0c67872e7da57a3ff3b44fcb3b8a0253e9c23fe20426e1c6847f7cc Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Entity B sponsors a final-pay noncontributory defined benefit plan. On December 31, 20X0, the plan settled the vested benefit portion ($1,300,000) of the projected benefit obligation through the purchase of nonparticipating annuity contracts. As a result, Entity B recognized a gain of $325,000 in earnings determined as follows. - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-296FE6F2-D083-4756-A84C-F5F808561F6E-low.gif) Entity B (in thousands) Before Settlement Effect of Settlement After Settlement Assets and obligations: Vested benefit obligation " $(1,300)" " $1,300 " (a) $- Nonvested benefits (200) (200) Accumulated benefit obligation " (1,500)" " 1,300 " (200) Effects of projected future compensation levels (500) (500) Projected benefit obligation " (2,000)" " 1,300 " (700) Plan assets at fair value " 2,100 " " (1,300)" (a) $800 Funded status and recognized asset $100 $- $100 Amounts recognized in accumulated other comprehensive income: "Transition asset (b),(c)" $(200) $130 $(70) Net gain (c) (300) 195 (105) $(500) $325 $(175) (a) "The vested benefits of $1,300 were settled by using plan assets to purchase nonparticipating annuity contracts." (b) A transition asset remaining in accumulated other comprehensive income is treated as a net gain included in accumulated other comprehensive income. (c) "A pro rata portion of the maximum gain (see paragraph 715-30-35-79), which includes the net gain included in accumulated other comprehensive income ($300) and the transition asset remaining in accumulated other comprehensive income ($200), is recognized due to the settlement. The projected benefit obligation was reduced from $2,000 to $700, a reduction of 65 percent. Accordingly, 65 percent of the maximum gain of $500 ($300 + $200), a gain of $325, was recognized in earnings. The journal entry required to reflect the accounting for the plan settlement follows." Other comprehensive income-transition asset $130 Other comprehensive income-net gain 195 Gain from settlement $325 ##### [715-30-55-208](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-208) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:7822244d7478e7914a2bbbc8b0266fac9254df8095bd9ec877a6acb61e612a8a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Case and Case C allocate an amount equal to the settlement gain on a pro rata basis to the transition asset remaining in accumulated other comprehensive income and the net gain included in accumulated other comprehensive income. This is not the only method of allocation permitted under those circumstances by the Settlements, Curtailments, and Certain Termination Benefits Subsections of this Subtopic. An amount equal to the settlement gain could be allocated initially to the transition asset remaining in accumulated other comprehensive income or the net gain included in accumulated other comprehensive income, provided the approach selected is applied consistently from year to year. However, because the allocation method can affect the determination of subsequent periods' net periodic pension cost, allocation on a pro rata basis is recommended because it is an unbiased approach. ##### [715-30-55-209](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-209) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:ec8c0ebe84ac79e654f9aa563d8e0840639f6d8374d5fc70c1c0fd1a25fcf6ad Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Case illustrates the settlement of a pension obligation for a situation in which the plan assets exceed the projected benefit obligation and a participating annuity contract is purchased to settle benefits. In this Case, Entity C did not have a retroactive plan amendment after the transition to the requirements of this Subtopic but did have a transition asset remaining in accumulated other comprehensive income. This Case illustrates the guidance in paragraph [715-30-35-79](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-79) relating to accounting for the cost of a participation right if the purchase of a participating annuity constitutes a settlement. ##### [715-30-55-210](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-210) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:17806922cd29a996b1869937b90749901328653364bc801f74452ad2a5fa0997 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Entity C sponsors a final-pay noncontributory defined benefit plan. On December 31, 20X0, the plan settled the vested benefit portion ($1,300,000) of the projected benefit obligation through the purchase of a participating annuity contract at a cost of $1,430,000. The plan could have purchased a nonparticipating contract covering the same benefits for $1,300,000. The participation features of the contract warranted a conclusion that its purchase constituted a settlement. See paragraph [715-30-55-157](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-157) for a discussion of this conclusion about the participation features. As a result, Entity C recognized a gain of $240,000, (rounded) in earnings, determined as follows. - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-1ED5FFFE-91D9-4589-9EC3-07CCDEA3E0E0-low.gif) Entity C (in thousands) Before Settlement Effect of Settlement After Settlement Obligations: Vested benefit obligation " $(1,300)" " $1,300 " (a) $- Nonvested benefits (200) (200) Accumulated benefit obligation " (1,500)" " 1,300 " (200) Effects of projected future compensation levels (500) (500) Projected benefit obligation " (2,000)" " 1,300 " (700) Plan assets at fair value: Participation right 130 (a) 130 Other plan assets " 2,100 " " (1,430)" (a) 670 " 2,100 " " (1,300)" 800 Funded status and recognized asset $100 $- $100 "Amounts recognized in accumulated other comprehensive income:" "Transition asset (b),(c)" $(200) $130 (d) $(70) Net gain (c) (300) 110 (d) (190) $(500) $240 $(260) (a) "The vested benefits of $1,300 were settled by using $1,430 of plan assets to purchase a participating annuity contract. However, a nonparticipating contract covering the same benefits could have been purchased for $1,300. The plan paid the additional $130 to obtain the participation right." (b) A transition asset remaining in accumulated other comprehensive income is treated as a net gain included in accumulated other comprehensive income. (c) "A pro rata amount of the maximum gain (see paragraph 715-30-35-79), which includes the net gain included in accumulated other comprehensive income ($300) and the transition asset remaining in accumulated other comprehensive income ($200), was recognized due to the settlement. However, any gain on a settlement that uses a participating annuity contract shall be computed by first reducing the maximum gain by the cost of the participation right \[$200 + ($300 - $130) = $370\]. The projected benefit obligation was reduced from $2,000 to $700, a reduction of 65 percent. Accordingly, a gain of $240 (rounded) was recognized (.65 x $370). The journal entry required to reflect the accounting for the plan settlement follows." Other comprehensive income-transition asset $130 Other comprehensive income-net gain 110 Gain from settlement $240 (d) The amount of gain from settlement was allocated as follows (rounded). Transition asset (.65 x $200) $130 Net gain \[.65 x ($300 - $130)\] 110 $240 ##### [715-30-55-211](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-211) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:71bed46b467c7e8eae7092faa9b12b4f8ab82d3b88957b4f781b2129a8320c56 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See paragraph [715-30-55-208](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-208) for a discussion of the permitted methods for allocating settlement gain amounts. ##### [715-30-55-212](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-212) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:574dbae63f5976333c57f9b396c9bb52f70f49dcafe1766a68af625bf4bcbb78 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Example illustrates the calculation of prior service cost associated with the services of terminated employees that would be used to apply the guidance in paragraph [715-30-35-92](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-92). ##### [715-30-55-213](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-213) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:72dcdba696093d0bfd583fbd6fd62060993a744e13b2eb6928e257af1ea17093 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Entity A sponsors a final-pay noncontributory defined benefit plan. On January 1, 20X0, the entity had a retroactive plan amendment resulting in prior service cost of $800,000. The prior service cost included in accumulated other comprehensive income that results from the plan amendment is amortized based on the expected future years of service of participants active as of January 1, 20X0, who are expected to receive benefits under the plan. As of January 1, 20X0, the entity had 100 employees who were expected to receive benefits under the plan. Based on the assumption that 5 percent of that group (5 employees) leaves (either quits or retires) in each of the next 20 years, the expected future years of service amounted to 1,050. ##### [715-30-55-214](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-214) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:f86a2fbf06e0cbe11bd7d758c3b2c5106711a6760a20c7fae57e5aeeb8cef8a6 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The amount of prior service cost associated with each expected future year of service is $762 ($800,000 ÷ 1,050). The following table illustrates the originally expected expiration of the anticipated service years. - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-E7C36CE8-677F-4B12-BAA0-C78ACAE97260-low.gif) Determination of Expected Years of Service Rendered in Each Year Before Curtailment Year Individuals Future Service Years X0 X1 X2 X3 X4 X5 X6 X7 X8 X9 Y0 Y1 Y2 Y3 Y4 Y5 Y6 Y7 Y8 Y9 A1-A5 5 5 B1-B5 10 5 5 C1-C5 15 5 5 5 D1-D5 20 5 5 5 5 E1-E5 25 5 5 5 5 5 F1-F5 30 5 5 5 5 5 5 G1-G5 35 5 5 5 5 5 5 5 H1-H5 40 5 5 5 5 5 5 5 5 I1-I5 45 5 5 5 5 5 5 5 5 5 J1-J5 50 5 5 5 5 5 5 5 5 5 5 K1-K5 55 5 5 5 5 5 5 5 5 5 5 5 L1-L5 60 5 5 5 5 5 5 5 5 5 5 5 5 M1-M5 65 5 5 5 5 5 5 5 5 5 5 5 5 5 N1-N5 70 5 5 5 5 5 5 5 5 5 5 5 5 5 5 O1-O5 75 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 P1-P5 80 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 Q1-Q5 85 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 R1-R5 90 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 S1-S5 95 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 T1-T5 100 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 "1,050" Service years rendered 100 95 90 85 80 75 70 65 60 55 50 45 40 35 30 25 20 15 10 5 Amortization fraction 100 95 90 85 80 75 70 65 60 55 50 45 40 35 30 25 20 15 10 5 "1,050" "1,050" "1,050" "1,050" "1,050" "1,050" "1,050" "1,050" "1,050" "1,050" "1,050" "1,050" "1,050" "1,050" "1,050" "1,050" "1,050" "1,050" "1,050" "1,050" Expected future years of service remaining at year-end 950 855 765 680 600 525 455 390 330 275 225 180 140 105 75 50 30 15 5 0 Prior service cost " $800,000 " Total expected future years of service " 1,050 " Amortization amount per each year of service $762 ##### [715-30-55-215](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-215) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:38f1b51c752405eeeb1f66a8e167cd2e181944d220c5c9d88a97cc0bb646eb24 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. On December 31, 20X2, Entity A terminated 25 employees active at the date of the plan amendment. Immediately before the curtailment, 765 expected future years of service remained (1,050 less 285 years of service rendered in the previous 3 years). The curtailment reduced the total expected future years of service at December 31, 20X2, from 765 to 555 (210) as illustrated in the following table. Therefore, Entity A will recognize $160,020 ($762 × 210) of prior service cost in earnings in conjunction with the curtailment. - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-99BCCBA3-C116-4F96-98FF-2C7FFB2BD6DC-low.gif) Determination of Expected Years of Service Rendered in Each Year after Curtailment Year Individuals X0 X1 X2 X3 X4 X5 X6 X7 X8 X9 Y0 Y1 Y2 Y3 Y4 Y5 Y6 Y7 Y8 Y9 A1-A5 5 B1-B5 5 5 C1-C5 5 5 5 D1-D5 (a) 5 5 5 E1-E5 5 5 5 5 5 F1-F5 5 5 5 5 5 5 G1-G5 5 5 5 5 5 5 5 H1-H5 (a) 5 5 5 I1-I5 5 5 5 5 5 5 5 5 5 J1-J5 5 5 5 5 5 5 5 5 5 5 K1-K5 5 5 5 5 5 5 5 5 5 5 5 L1-L5 (a) 5 5 5 M1-M5 5 5 5 5 5 5 5 5 5 5 5 5 5 N1-N5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 O1-O5 (a) 5 5 5 P1-P5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 Q1-Q5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 R1-R5 (a) 5 5 5 S1-S5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 T1-T5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 Service years rendered 100 95 90 60 60 55 50 45 45 40 35 30 30 25 20 20 15 10 10 5 Adjustment for termination 210 Total 100 95 300 60 60 55 50 45 45 40 35 30 30 25 20 20 15 10 10 5 Amortization fraction 100 95 300 60 60 55 50 45 45 40 35 30 30 25 20 20 15 10 10 5 "1,050" "1,050" "1,050" "1,050" "1,050" "1,050" "1,050" "1,050" "1,050" "1,050" "1,050" "1,050" "1,050" "1,050" "1,050" "1,050" "1,050" "1,050" "1,050" "1,050" Expected future years of service remaining at year-end 950 855 555 495 435 380 330 285 240 200 165 135 105 80 60 40 25 15 5 0 (a) Terminated group of employees. ##### [715-30-55-216](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-216) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:bb701dc52bfc57af6bfc6371f0b29328e330929979b0f1081e79cfabc0a0e9d9 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Example illustrates the guidance in paragraphs [715-30-35-93 through 35-94](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-93) relating to the effects on a curtailment if there is a transition asset remaining in accumulated other comprehensive income at the date of the curtailment. The following Cases present situations where there is also a net loss included in accumulated other comprehensive income at the time of the curtailment: 1. a Transition asset remaining in accumulated other comprehensive income is less than net loss included in accumulated other comprehensive income (Case A). 2. b Transition asset remaining in accumulated other comprehensive income exceeds net loss included in accumulated other comprehensive income (Case B). ##### [715-30-55-217](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-217) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:09ebb9f88f54b7adb417395120bf0acf05c7000ebb1c73dfc100891d6f82c6b8 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Cases A and B share the following assumptions. An employer has a transition asset remaining in accumulated other comprehensive income. On July 1, 20X0, the employer decides to terminate a significant number of employees as part of a plan to reduce its operations. The effects of the terminations are reasonably estimable at that date. The termination of employees occurs on August 29, 20X0. ##### [715-30-55-218](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-218) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:992d4af7f6a5b03894daade179c03aba73938d9a114cae645f345e64d93df4d2 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Case demonstrates the paragraph [715-30-35-94](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-94) guidance that requires that, if the sum of the effects resulting from a curtailment is a net gain, that gain be recognized in earnings when the related employees terminate (August 29, 20X0) and be based on plan assets and the projected benefit obligation measured as of that date. ##### [715-30-55-219](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-219) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:f85426d40a50ce6816ac1a8b8e3ad382b05f858b7da96c7eb264c8286a7b55f0 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In this Case, the transition asset remaining in accumulated other comprehensive income is less than the net loss included in accumulated other comprehensive income. The projected benefit obligation based on future compensation levels and the nonvested accumulated benefit obligation related to the terminated employees decrease by $90,000 and $20,000, respectively. The curtailment is accounted for as of August 29, 20X0, as follows (in thousands). - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-1526003E-37DC-4902-B285-D9ABF31D345F-low.gif) "August 29, 20X0" Before Curtailment Effects of Curtailment After Curtailment Assets and obligations: Vested benefit obligation " $(1,550)" " $(1,550)" Nonvested benefits (250) $20 (230) Accumulated benefit obligation " (1,800)" 20 " (1,780)" Effect of future compensation levels (400) 90 (310) Projected benefit obligation " (2,200)" 110 (a) " (2,090)" Plan assets at fair value " 2,100 " " 2,100 " Funded status and recognized asset (liability) $(100) $110 $10 Amounts recognized in accumulated other comprehensive income: Transition asset $(200) $(200) Net loss 300 $(100) (a) 200 $100 $(100) $- (a) "Paragraph 715-30-35-94 requires that any curtailment gain be first offset against any existing loss included in accumulated other comprehensive income. Because that amount is a loss of $100 ($300 net loss included in accumulated other comprehensive income less the $200 transition asset remaining in accumulated other comprehensive income), the $110 decrease in the projected benefit obligation is initially offset against the loss, resulting in a $10 net gain from the curtailment. The journal entry to account for the curtailment follows." Pension asset $10 Pension liability 100 Gain from curtailment $10 Other comprehensive income-net loss 100 ##### [715-30-55-220](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-220) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:61c639013ed570938a93434ebb39c317f2caa704f5268810fcf4ef3236556702 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Case demonstrates the paragraph [715-30-35-94](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-94) guidance that requires that, if the sum of the effects resulting from a curtailment is a net loss, that loss be recognized in earnings when it is probable that a curtailment will occur and the effects described are reasonably estimable. ##### [715-30-55-221](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-221) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:3fee1c8acbad9eccd97d18e9227d457cf4a9e1e9ed115a427d078e2e9e29adc8 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In this Case, the transition asset remaining in accumulated other comprehensive income exceeds the net loss included in accumulated other comprehensive income. The net change in the projected benefit obligation for the terminated employees is an increase of $110,000. There is an increase of $220,000 for supplemental early retirement benefits and a decrease of $110,000 relating to future compensation levels ($90,000) and nonvested accumulated pension benefits ($20,000). As a result, the curtailment is accounted for as of July 1, 20X0, as follows (in thousands). - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-76820DA7-6AE9-41CE-82A3-EC135686E807-low.gif) "July 1, 20X0" Before Curtailment Effects of Curtailment After Curtailment Assets and obligations: Vested benefit obligation " $(1,550)" $(220) " $(1,770)" Nonvested benefits (250) 20 (230) Accumulated benefit obligation " (1,800)" (200) " (2,000)" Effect of future compensation levels (400) 90 (310) Projected benefit obligation " (2,200)" (110) (a) " (2,310)" Plan assets at fair value " 2,100 " " 2,100 " Funded status and recognized liability $(100) $(110) $(210) Amounts recognized in accumulated other comprehensive income: Transition asset $(200) $100 (a) $(100) Net loss 100 100 $(100) $100 $- (a) "Pursuant to paragraph 715-30-35-94, the loss (that is, the increase in the projected benefit obligation) resulting from the curtailment is first offset against any net gain included in accumulated other comprehensive income. Because that amount is a gain of $100 ($100 net loss included in accumulated other comprehensive income plus the $200 transition asset remaining in accumulated other comprehensive income), the $110 increase in the projected benefit obligation is initially offset against the gain, resulting in a $10 net loss from the curtailment. The journal entry to account for the curtailment follows." Loss from curtailment $10 Other comprehensive income-transition asset 100 Pension liability $110 ##### [715-30-55-222](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-222) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:1622ff0e33543065d37f1b851f1821bdeb5003d37e3f3e3fff41258380e25149 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Example illustrates the guidance in paragraph [715-30-35-95](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-95) that addresses a curtailment if termination benefits are also involved. ##### [715-30-55-223](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-223) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:6ce4723a5a6fa4ef1285c888691842d2fd990be59ac6e52bdccf02ff24034a28 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Entity A sponsors a final-pay noncontributory defined benefit plan and has a transition obligation remaining in accumulated other comprehensive income. On May 11, 20X2, the entity offered for a short period of time (until June 30, 20X2) special benefits to its employees in connection with their voluntary termination of employment (special termination benefits). The special termination benefit was a lump-sum payment to be made upon termination, payable in addition to the employee's regular plan benefits. The special termination benefit was paid directly from the employer's assets rather than from the plan assets. ##### [715-30-55-224](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-224) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:6dedd23c7250f32af3c128d6c6753af64f594aa4da87c1cf8af86b498c811ad2 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. On June 30, 15 percent of the employees accepted the offer. The amount of the special termination benefit payment was $125,000. The portion of the projected benefit obligation based on the expected future compensation levels of the terminated employees amounted to $100,000, and all the employees terminated were fully vested in their accumulated benefits. The portion of the transition obligation remaining in accumulated other comprehensive income associated with the years of service no longer expected from the terminated employees was $150,000. As a result, Entity A recognized a loss of $175,000 in earnings that includes the cost of the special termination benefits and the loss, as determined using the guidance in paragraphs [715-30-35-92 through 35-94](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-92) , from the curtailment. ##### [715-30-55-225](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-225) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:dc91da7c34147921b548aec9b1c6380ce81a4cab1017b516f060e84e7503c487 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In this Example, the effects resulting from the curtailment were not reasonably estimable until June 30, 20X2, the acceptance date for the offer of special termination benefits. The loss was determined as follows. - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-66D736AA-3FA5-407E-8C0E-6033905BAE02-low.gif) Entity A (in thousands) Before Curtailment Effect of Curtailment After Curtailment Assets and obligations: Vested benefit obligation " $(1,300)" " $(1,300)" Nonvested benefits (200) (200) Accumulated benefit obligation " (1,500)" " (1,500)" Effects of projected future compensation levels (500) $100 (400) Projected benefit obligation " (2,000)" 100 (a) " (1,900)" Plan assets at fair value " 1,400 " " 1,400 " Funded status and recognized liability $(600) $100 $(500) Amounts recognized in accumulated other comprehensive income: Transition obligation (b) $800 $(150) $650 Net gain (300) (300) $500 $(150) $350 Loss on curtailment $50 Cost of special termination benefits (lump-sum payments to terminated employees) 125 Total loss recognized in earnings $175 (c) (a) "Paragraph 715-30-35-93 requires that any curtailment gain be first offset against any existing loss included in accumulated other comprehensive income. Since there was an existing gain of $300, the $100 gain from the curtailment was recognized in earnings." (b) The portion of the transition obligation remaining in accumulated other comprehensive income associated with the years of service no longer expected from the terminated employees ($150) was recognized in earnings. (c) "The loss Entity A recognized in earnings was $175, which includes the cost of the special termination benefits of $125, the gain related to salary progression of $100 and the reclassification of the transition obligation remaining in accumulated other comprehensive income of $150. The journal entry required to reflect the accounting for this event follows." Loss on employee terminations $175 Pension liability 100 Other comprehensive income-transition obligation $150 Liability for termination benefits 125 "If the entity had paid the termination benefits from the pension plan (by amending the plan and using plan assets), the same loss would have been recognized, but $125 would have been credited to the pension liability due to the decrease in plan assets, instead of credited to the liability for termination benefits." ##### [715-30-55-226](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-226) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:b7a8549b73069f331d7ffb4d599aa11e85d4c714fffb4272cb16a63b6205b3e4 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Example illustrates the guidance in paragraph [715-30-25-11](https://asc.understandingaccounting.org/asc/715/30/#715-30-25-11) relating to the determination of the liability and the losses from employees' acceptance of an offer of special termination benefits and the guidance in paragraph [715-30-35-95](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-95) relating to the determination of the change in the projected benefit obligation due to the related curtailment. ##### [715-30-55-227](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-227) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:249e9871259231b2b19d2903db775965752b0591f8699d3b28c91de34828aed5 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In this Example, an employer's pension plan has a transition obligation remaining in accumulated other comprehensive income, and there are no retroactive pension plan amendments after that date. On May 11, 20X0, the employer offers for a short period of time (until June 13, 20X0) special benefits to its employees in connection with their voluntary termination of employment (special termination benefits). An additional 5 years of service will be credited, and eligibility for early retirement benefits will be granted for employees who are age 50 or older with more than 20 years of service and who elect to retire. Normal early retirement is at age 55. The special termination benefits (increased pension benefits) together with the employee's regular pension benefits will be paid directly from plan assets. ##### [715-30-55-228](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-228) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:78250d43f9057047740f408be726f7a3dffd04ff844a4750c84717c5c57ceb13 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. On June 13, 20X0, employees representing 15 percent of the work force accept the offer of special termination benefits. For those employees, the actuarial present value of their accumulated pension benefits assuming they terminated at that date without the special termination benefits is $525,000, and the actuarial present value of their accumulated pension benefits with the special termination benefits is $625,000. None of the employees accepting the offer of special termination benefits are otherwise eligible for early retirement benefits under the pension plan. ##### [715-30-55-229](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-229) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:ea3f82df62cee526350a906686eb6cc772d26769a2f257fd6a993ea278836ff8 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The portion of the projected benefit obligation based on the future compensation levels of the terminated employees is $80,000, and all terminated employees are fully vested in their accumulated pension benefits. The portion of the transition obligation remaining in accumulated other comprehensive income assigned to the years of service no longer expected from the terminated employees is $150,000. ##### [715-30-55-230](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-230) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:49af1102a614663c30dec65b0758bb814258742580f0389891d4abc8a30f5764 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Paragraph [715-30-35-94](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-94) provides guidance that requires that if the sum of the effects resulting from a curtailment is a net loss, that loss is recognized in earnings when it is probable that a curtailment will occur and the effects described are reasonably estimable. In this Example, the effects resulting from the curtailment are not reasonably estimable until June 13, 20X0, the acceptance date for the offer of special termination benefits. As a result, the employer recognizes as of June 13, 20X0, a loss of $170,000 that includes the cost of the special termination benefits and the net loss from the curtailment determined as follows (in thousands). - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-DCFA3C39-F885-424C-AB66-2D68FF874BAC-low.gif) "June 13, 20X0" Before Employee Terminations Effects of Terminations After Employee Terminations Assets and obligations: Vested benefit obligation Employees accepting offer $(525) $(100) (a) $(625) Other employees (775) (775) Nonvested benefits (200) (200) Accumulated benefit obligation " (1,500)" (100) " (1,600)" Effect of future compensation levels (500) 80 (b) (420) Projected benefit obligation " (2,000)" (20) " (2,020)" Plan assets at fair value " 1,400 " " 1,400 " Funded status and recognized liability $(600) $(20) $(620) "Amounts recognized in accumulated other comprehensive income:" Transition obligation $800 $(150) (c) $650 Net gain (300) (300) $500 $(150) (d) $350 (a) The loss from acceptance of the special termination benefits is $100 ($625 - $525). (b) "Paragraph 715-30-35-94 requires that any curtailment gain be first offset against any existing loss included in other comprehensive income. Because that existing amount is a gain of $300 (the net gain included in accumulated other comprehensive income), the $80 gain from the curtailment is recognized in earnings." (c) "Paragraph 715-30-35-93 specifies that a transition obligation remaining in accumulated other comprehensive income is treated as prior service cost for purposes of applying the guidance in the Settlements, Curtailments, and Certain Termination Benefits Subsections of this Subtopic. The reduction of prior service cost included in accumulated other comprehensive income associated with the previously expected years of service of the terminated employees is $150." (d) "The loss recognized in earnings is $170, which includes the cost of the special termination benefits of $100, the gain related to the absence of future compensation of $80, and the recognition of a portion of the transition obligation remaining in accumulated other comprehensive income of $150. The journal entry to account for the employee terminations follows." Loss on employee terminations $170 Other comprehensive income-transition obligation $150 Pension liability 20 ##### [715-30-55-231](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-231) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:9c5225fab0c83c0d26018697efdb5035677a7113996835f3cb7dfd7cf18b566c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Example illustrates the accounting for a curtailment following the guidance in the Settlements, Curtailments, and Certain Termination Benefits Subsection of Section 715-30-35. Each of the two Cases in this Example represents an entity that sponsors final-pay noncontributory defined benefit plans. The Cases differ based on whether there was a retroactive plan amendment after transition to the accounting required under this Subtopic and whether there was a transition obligation or a transition asset remaining in accumulated other comprehensive income at the date of the curtailment as follows: 1. a Curtailment with a transition obligation and a retroactive plan amendment (Case A) 2. b Curtailment with a transition asset (Case B). ##### [715-30-55-232](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-232) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:d986f5a04b58bf3e35c6e9177b22e31d3bdb989a507a28ef60033bc399921b6e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Case illustrates the accounting for a plan curtailment in which there was a transition obligation remaining in accumulated other comprehensive income at the date of the curtailment and there had been a retroactive plan amendment after Entity A adopted the accounting requirements of this Subtopic. On January 1, 20X0, the entity had a retroactive plan amendment resulting in $800,000 of prior service cost. On December 31, 20X1, the management of Entity A committed itself to a formal plan to dispose of a component of an entity. In connection with the disposal, the number of employees accumulating benefits under the plan would be reduced significantly. The portion of the projected benefit obligation based on the expected future compensation levels of the terminated employees was $90,000, and nonvested benefits of the terminated employees amounted to $20,000. The plan also had a transition obligation remaining in accumulated other comprehensive income that is treated as prior service cost included in accumulated other comprehensive income under the guidance in paragraph [715-30-35-92](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-92). The remaining expected future years of service associated with those employees present at the date of transition was reduced by 30 percent due to the termination of employees. Accordingly, 30 percent of the transition obligation remaining in accumulated other comprehensive income at December 31, 20X1, was a loss that amounted to $120,000. ##### [715-30-55-233](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-233) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:c82bb7b6a90b92240e37b5e54cbafc34ce99c4551c6c0b6595f29da4e61f664e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The prior service cost included in accumulated other comprehensive income (which relates to the plan amendment of January 1, 20X0) associated with the previously expected years of service of the terminated employees that will not be rendered was a loss which amounted to $160,000. The sum of the effects resulting from the plan curtailment was a loss of $170,000 recognized in earnings, determined as follows. - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-B813DF3A-556F-45B4-84BE-E80768CF9F74-low.gif) Entity A (in thousands) Before Curtailment Effect of Curtailment After Curtailment Assets and obligations: Vested benefit obligation " $(1,300)" " $(1,300)" Nonvested benefits (200) $20 (180) Accumulated benefit obligation " (1,500)" 20 " (1,480)" Effects of projected future compensation levels (500) 90 (410) Projected benefit obligation " (2,000)" 110 (a) " (1,890)" Plan assets at fair value: " 1,400 " " 1,400 " Funded status and recognized liability $(600) $110 $(490) "Amounts recognized in accumulated other comprehensive income:" Transition obligation (b) $400 $(120) (b) $280 Prior service cost resulting from plan amendment (c) 651 (160) (c) 491 Net gain (151) (151) $900 $(280) $620 (a) "Under paragraph 715-30-35-94, the gain (that is, the decrease in the projected benefit obligation) resulting from the curtailment is first offset against any existing net loss included in accumulated other comprehensive income. Because the amount included in accumulated other comprehensive income in this Case was a gain of $151, the $110 gain from the curtailment was recognized in earnings." The journal entry required to reflect the recognition of the curtailment gain in earnings follows. Pension liability 110 Curtailment gain 110 (b) "Because the plan had a transition obligation remaining in accumulated other comprehensive income, that amount is treated as prior service cost included in accumulated other comprehensive income for purposes of applying this Subtopic's guidance. The remaining expected future years of service associated with those employees present at the date of transition was reduced by 30 percent due to the termination of employees. Accordingly, 30 percent of the transition obligation included in accumulated other comprehensive income at the date of the curtailment was recognized in earnings, which amounted to $120." The journal entry required to reflect the recognition of the transition obligation in earnings follows. Curtailment loss 120 Other comprehensive income-transition obligation 120 (c) "The prior service cost included in accumulated other comprehensive income (which related to the plan amendment of January 1, 20X0) associated with the previously expected years of service of the terminated employees that will not be rendered was $160. That amount was recognized in earnings." The journal entry required to reflect the recognition of the prior service cost in earnings follows. Curtailment loss 160 Other comprehensive income-prior service cost 160 ##### [715-30-55-234](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-234) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:47b8219a0c29d10537cb61b2b18ddb4a2b0479331d22cbd7b8718cbaf2cfaab5 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Case illustrates the accounting for a plan curtailment in which there was a transition asset remaining in accumulated other comprehensive income at the date of the curtailment. In this Case, there had not been a retroactive plan amendment after Entity B adopted the accounting requirements of this Subtopic. On July 27, 20X2, the management of Entity B decided to reduce significantly the operations of a line of business products. Although that decision did not result in closing down any facilities, it required the termination of a significant number of employees. The termination of employees took place on November 1, 20X2. ##### [715-30-55-235](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-235) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:65e6d196b590ff48d7185ad20ecfa424b225c938d18d3d9b108bc4c4895147fd Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The portion of the projected benefit obligation based on expected future compensation levels of the terminated employees was $90,000, and the portion of nonvested benefits related to the terminated employees was $20,000. As a result, Entity B recognized a gain of $110,000 on November 1, 20X2. Following the guidance in paragraphs [715-30-35-92 through 35-95](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-92) , Entity B estimated at July 27, 20X2, that a net curtailment gain would result. Accordingly, the gain was recognized on the date employees terminated (November 1, 20X2) and was based on plan assets and obligations measured as of that date. The gain was determined as follows. - ![](https://asc.understandingaccounting.org/asc-img/GUID-95480C6A-7C9B-4673-8A61-22FF446A6D70-low.gif) Entity B (in thousands) "As of November 1, 20X2" Before Realization of Curtailment Gain Effect of Curtailment After Realization of Curtailment Gain Assets and obligations: Vested benefit obligation " $(1,300)" " $(1,300)" Nonvested benefits (300) $20 (280) Accumulated benefit obligation " (1,600)" 20 " (1,580)" Effects of projected future compensation levels (400) 90 (310) Projected benefit obligation " (2,000)" 110 (a) " (1,890)" Plan assets at fair value " 2,100 " " 2,100 " Funded status and recognized asset $(100) $110 $(210) Amounts recognized in accumulated other comprehensive income: Transition asset (a) $(200) $- (a) $(200) Net loss 100 - (a) 100 $(100) $- $(100) (a) "Following the guidance in paragraph 715-30-35-94, the net amount included in accumulated other comprehensive income was a gain of $100 (net loss included in accumulated other comprehensive income of $100 plus the transition asset remaining in accumulated other comprehensive income of $200). Because the net amount included in accumulated other comprehensive income was a gain, the $110 gain from curtailment was recognized in earnings. If the previously existing net amount included in accumulated other comprehensive income had been a loss including the transition asset remaining in accumulated other comprehensive income and that loss exceeded the curtailment gain, the curtailment gain would have been offset, and no gain would have been recognized in earnings. The journal entry required to reflect the accounting for the plan curtailment follows." Pension asset $110 Gain from curtailment $110 ##### [715-30-55-236](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-236) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:a0d114901c3218e6e9360b7f1e77ed7f822b89c634be435c468e786c89db8da9 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Example illustrates the guidance in paragraph [715-30-55-133](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-133). In this Example there is a termination of a pension plan in one period followed by the settlement of the plan in another period. There is no successor pension plan. ##### [715-30-55-237](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-237) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:92282fb5abd70006662c10cbdd584904e23e216e8e43e136385ad88b56780b57 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. On July 20, 20X1, an employer formally amends its pension plan to provide for its termination. Employees cease to accrue additional pension benefits as of November 30, 20X1 (the effective date of the pension plan termination), and pension benefits are not to be provided under a successor pension plan. On January 30, 20X2, upon receipt of the appropriate regulatory approvals for termination of the pension plan, nonparticipating annuity contracts are purchased to settle the accumulated benefit obligation of $1,650,000 as of that date (nonvested pension benefits become vested upon termination of the pension plan), and the employer withdraws excess plan assets. The pension plan ceases to exist. ##### [715-30-55-238](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-238) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:8df859c086160cb71b638306970007690f43a64879ea370526ff31eaaa222296 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The portion of the projected benefit obligation at July 20, 20X1, based on future compensation levels beyond November 30, 20X1, is $400,000. As a result, the employer recognizes a curtailment gain of $400,000 as of July 20, 20X1, the date of the pension plan amendment. The employer recognizes a settlement gain of $550,000 as of January 30, 20X2, the date of the settlement. The following two tables indicate the determination of the effects of the curtailment and the settlement. Because the effect of the curtailment is a gain, that gain is recognized pursuant to paragraphs [715-30-35-92 through 35-94](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-92) and [715-30-55-184](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-184) when the pension plan amendment is adopted (July 20, 20X1) and is based on plan assets and the projected benefit obligation measured as of that date. - Table 1- The Curtailment (in thousands) - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-AE6D27B2-ED0C-49E9-A746-18CF2A6F87A2-low.gif) "July 20, 20X1" Before Curtailment Effect of Curtailment After Curtailment Assets and obligations: Accumulated benefit obligation " $(1,480)" " $(1,480)" Effect of future compensation levels (420) $400 (a) (20) Projected benefit obligation " (1,900)" 400 " (1,500)" Plan assets at fair value " 2,100 " " 2,100 " Funded status and recognized asset $200 $400 $600 Net gain recognized in accumulated other comprehensive income $(500) $(500) (a) "The effect of future compensation levels beyond November 30, 20X1, ceases to be part of the projected benefit obligation when the amendment to terminate the pension plan is adopted. Pursuant to paragraph 715-30-35-94, the gain (that is, the decrease in the projected benefit obligation) resulting from the curtailment is first offset against any net loss included in accumulated other comprehensive income. Because the amount included in accumulated other comprehensive income is a gain in earnings of $500, the $400 gain from the curtailment is recognized in earnings. The journal entry to account for the curtailment follows." Pension asset $400 Gain from curtailment $400 - Table 2- The Settlement (in thousands) - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-D4EB630D-C512-4341-BE8C-29E1A47BFEC5-low.gif) "January 20, 20X2" Before Settlement Effect of Settlement After Settlement Assets and obligations: "Projected benefit obligation (equals accumulated and vested benefit obligation)" " $(1,650)" " $1,650 " (a) $- Plan assets at fair value " 2,300 " " (1,650)" (a) - (650) (b) Funded status and recognized asset $650 $(650) $- "Net gain recognized in accumulated other comprehensive income" $(550) $550 (c) $- (a) "The vested benefit obligation of $1,650 is settled by using plan assets of an equal amount to purchase nonparticipating annuity contracts." (b) Plan assets in excess of the amount used to settle the vested benefit obligation are withdrawn from the pension plan. (c) "A pro rata amount of the maximum gain of $550 is recognized in earnings due to a settlement. The projected benefit obligation is reduced from $1,650 to $0, a reduction of 100 percent. Accordingly, 100 percent of the maximum gain is recognized in earnings. The journal entry to account for the settlement and withdrawal of excess plan assets follows." Cash $650 Other comprehensive income-net gain 550 Gain from settlement $550 Pension asset 650 ##### [715-30-55-239](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-239) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:5a9cf21118ab452af95a8e84389abd2002dffc7eeabcb4d5969fa81472bebbe7 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Example illustrates the guidance in paragraph [715-30-55-197](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-197) relating to the accounting for a curtailment and a settlement that occur in connection with a sale of a component of an entity. The following Cases present: 1. a Curtailment and settlement recognized in different interim periods (Case A) 2. b Curtailment and settlement recognized in the same interim period (Case B). ##### [715-30-55-240](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-240) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:4ee691efd14c9646d3fc54994121218cccf4abe0fa8bfa56dc8ff857de84c940 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Cases A and B initially share the following assumptions. ##### [715-30-55-241](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-241) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:d7cdc386010ba96a8d36d5bc5cb8cc7563f5a9aa5934c4ed78f7dc7200cc7529 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. On January 1, 20X1, an employer adopts a retroactive pension plan amendment that results in $800,000 of prior service cost. ##### [715-30-55-242](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-242) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:efa1b20d94eb2e66377ffbd7c4910e53971a56001ac972fc0538232b51c1352e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. During the second quarter of 20X2, the employer determines that it is probable that it will sell a component of the entity. The employer estimates that the sale will occur by year-end. However, all the criteria in paragraphs [205-20-45-1A through 45-1D](https://asc.understandingaccounting.org/asc/205/20/#205-20-45-1A) necessary to report discontinued operations are not satisfied during the second quarter. The employer estimates that the prior service cost included in accumulated other comprehensive income related to the pension plan amendment of January 1, 20X1, and associated with the previously expected years of service of the terminated employees that will not be rendered is a loss of $160,000. That estimate needs no revision on December 31, 20X2. ##### [715-30-55-243](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-243) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:98707a1da722dec985226345f274742b5efcd5508e66309d95c1eb60d7d4575c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. During the third quarter of 20X2, the employer enters into an agreement with a December 31, 20X2, closing date to sell the component. On December 31, 20X2 (disposal date), the employer sells the component at a $100,000 profit before considering the following pension-related effects. ##### [715-30-55-244](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-244) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:76ccf2f40346136785c42ec9f1fe126fdf63d5b260629a9e68fb0440bb939ead Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. All of the following occur in connection with the sale: 1. a Certain employees cease to be employed by the selling employer, which results in a significant reduction in the number of present employees accumulating pension benefits under the selling employer's pension plan (Plan A). 2. b The terminated employees are hired by the acquiring employer. 3. c The acquiring employer, through its pension plan (Plan B), agrees to assume the accumulated benefit obligation ($200,000) related to the terminated employees. 4. d Plan assets of $250,000 ($200,000 for the settlement of the accumulated benefit obligation and $50,000 as an excess contribution) are transferred from Plan A to Plan B. ##### [715-30-55-245](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-245) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:93692915ef1e79b8d9db54f4affd121b10903c28e3bdfe6b82aa844e33c4381e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The portion of the projected benefit obligation based on future compensation levels of the terminated employees is $75,000. ##### [715-30-55-246](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-246) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:b647b9cf008cd03d189cb5eaf1cc2c5e8942268a9115de055bc804136a0556e8 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The sum of the pension-related effects resulting from the sale is a net loss of $26,000 recognized in earnings as follows. - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-6E6D54B9-0A73-4526-9EB3-1CE6ADC53917-low.gif) Curtailment net loss (recognized in earnings during second quarter of 20X2): Prior service cost included in accumulated other comprehensive income associated with terminated employees " $160,000 " Reduction in projected benefit obligation " (75,000)" " $85,000 " "Settlement gain (recognized in earnings on December 31, 20X2):" Portion of transition asset remaining in accumulated other comprehensive income " (82,000)" Portion of net gain included in accumulated other comprehensive income " (27,000)" " (109,000)" "Transfer of plan assets in excess of the accumulated benefit obligation (recognized in earnings on December 31, 20X2)" " 50,000 " " $26,000 " ##### [715-30-55-247](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-247) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:35d010059b4ac8b186d2a279b306aea3294f99b11bec3998bfe86977bb7f3b0d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Case illustrates the accounting for the curtailment and the settlement in different interim periods. ##### [715-30-55-248](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-248) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:e168518e3159a577b06df97455b960ac3a0539f716130aa09206e0c44f7494e0 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Because the employer determined in the second quarter of 20X2 that it was probable that the component would be sold, the curtailment loss should be recognized in earnings in that quarter. However, because the employer had not satisfied all the criteria in paragraphs [205-20-45-1A through 45-1D](https://asc.understandingaccounting.org/asc/205/20/#205-20-45-1A) for reporting discontinued operations in that quarter, the curtailment loss would be reclassified to discontinued operations as part of restating the second quarter. Appropriate disclosures should be made regarding the plan curtailment in accordance with Section 715-20-50 on defined benefit plans. The following table presents the determination of the effects of the curtailment. - Table 1—The Curtailment (in thousands) - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-97618D8C-AA15-4D86-9726-77C71A58BA29-low.gif) Before Sale Curtailment-Related Effects Resulting from Sale After Curtailment Assets and obligations: Accumulated benefit obligation " $(1,500)" " $(1,500)" Effect of future compensation levels (500) $75 (a) (425) Projected benefit obligation " (2,000)" 75 " (1,925)" Plan assets at fair value " 2,400 " " 2,400 " Funded status and recognized asset $400 $75 $475 Amounts recognized in accumulated other comprehensive income: Transition asset $(790) $(790) Prior service cost 651 $(160) (b) 491 Net gain (261) (261) $(400) $(160) (c) $(560) (a) "Paragraph 715-30-35-94 requires that any curtailment gain be first offset against any existing loss included in other comprehensive income. Because that existing amount is a gain of $1,051 ($261 net gain included in accumulated other comprehensive income plus the $790 transition asset remaining in accumulated other comprehensive income), the $75 gain from the curtailment is recognized in earnings." (b) "The reduction of prior service cost included in accumulated other comprehensive income (which relates to the pension plan amendment of January 1, 20X1) associated with the previously expected years of service of the terminated employees that will not be rendered is $160." (c) The journal entry to account for the curtailment follows. Loss from curtailment $85 Pension asset 75 Other comprehensive income-prior service cost $160 ##### [715-30-55-249](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-249) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:bd3e50725531aecf9a53df3796d698e2bf89aa2fc4f19c1d6fc0f4f59000ee05 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Because the settlement occurred on December 31, 20X2, the gain from the settlement is recognized in earnings on that date and classified in discontinued operations. Appropriate disclosures should be made regarding the settlement of the pension obligation in accordance with Section 715-20-50. The following table presents the determination of the effects of the settlement. - Table 2 -The Settlement (in thousands) - ![](https://asc.understandingaccounting.org/asc-img/GUID-9C5FE47E-77C9-4AEA-8C8B-44A0FDA2638F-low.gif) "December 31, 20X2" After Curtailment Settlement- Related Effects Resulting from Sale After Sale Assets and obligations: Accumulated benefit obligation " $(1,500)" $200 (a) " $(1,300)" Effects of future compensation levels (425) (425) Projected benefit obligation " (1,925)" 200 " (1,725)" Plan assets at fair value " 2,400 " (250) (a) " 2,150 " Funded status and recognized asset $475 $(50) $425 "Amounts recognized in accumulated other comprehensive income:" Transition asset $(790) $82 (b) $(708) Prior service cost 491 491 Net gain (261) 27 (b) (234) $(560) $109 $(451) (a) "The accumulated benefit obligation of $200 is settled by transferring plan assets of an equal amount to the acquiring employer. In addition, the selling employer agrees to transfer an additional $50 of plan assets. The journal entry to account for the transfer of plan assets and the accumulated benefit obligation to Plan B as part of the sale follows." Gain on sale $50 Pension asset $50 Plan A's journal entry to account for the transfer of plan assets and the accumulated benefit obligation to Plan B follows. Accumulated benefit obligation $200 Withdrawal of excess plan assets 50 Plan assets $250 (b) "A pro rata amount of the maximum gain of $1,051 ($261 net gain included in accumulated other comprehensive income plus the $790 transition asset remaining in accumulated other comprehensive income) is recognized in earnings due to the settlement. The projected benefit obligation is reduced from $1,925 ($2,000 less the $75 curtailment gain) to $1,725, a reduction of 10.4 percent (rounded) due to the settlement. Accordingly, 10.4 percent of the maximum gain ($109 rounded) is recognized in earnings. The journal entry to account for the settlement follows." Other comprehensive income-transition asset $82 Other comprehensive income-net gain 27 Gain from settlement $109 ##### [715-30-55-250](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-250) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:0b5be82538fa5beea787b65413a9ecba0d3c30e46257377d2a587e4621467a42 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Case illustrates the accounting for the curtailment and the settlement in the same interim period. ##### [715-30-55-251](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-251) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:d49114be78bb831378cda56e9fcbf37c6ec72dbb4cf3de6e63a9ebc71d7f3ead Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For this Case, assume the same facts as Case A except that before the fourth quarter of 20X2, the employer did not expect to sell or otherwise dispose of the component of the entity. ##### [715-30-55-252](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-252) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:12.073Z to 2026-09-10T01:00:12.073Z Record version: sha256:b0f18f780e943459a326f9dc5ffec3f3aa525675f7cdf8ea3803661fffea6754 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In this Case the determination of the curtailment loss and the settlement gain is the same as that presented in Case A, Tables 1 through 2 (see paragraphs [715-30-55-248 through 55-249](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-248) ). However, both the curtailment loss and the settlement gain should be recognized in earnings in the fourth quarter of 20X2 and reported in discontinued operations pursuant to Subtopic 205-20. Source downloaded (UTC): 2026-09-10T01:00:15.090Z to 2026-09-10T01:00:15.090Z Record version: sha256:e2233d951d46ac12ce1493bc1cb80b9ec88a5d11ebe4b9997e58c4a022466f6d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 715-30-60: 60 Relationships [Read section](https://asc.understandingaccounting.org/asc/715/30/#60-relationships) SEC content: no #### Comprehensive Income ##### [715-30-60-1](https://asc.understandingaccounting.org/asc/715/30/#715-30-60-1) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:15.090Z to 2026-09-10T01:00:15.090Z Record version: sha256:32994ecebebcdcd5cac91954acd97aa780360a381527678642c7a783363ee920 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For the required display and reporting in comprehensive income of information about gains or losses associated with pension or other postretirement [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."), 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 associated with pension or other postretirement benefits, and transition assets or obligations associated with pension or other postretirement benefits, see Subtopic 220-10. #### Inventory ##### [715-30-60-2](https://asc.understandingaccounting.org/asc/715/30/#715-30-60-2) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:15.090Z to 2026-09-10T01:00:15.090Z Record version: sha256:96f5ed18a03f6152bb5788f11c9dc2719102620f097ba3a4d48a3cee623e9c0b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For guidance on the capitalization of the service cost component 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.") as part of the cost of inventory, see Subtopic 330-10. #### Exit or Disposal Cost Obligations ##### [715-30-60-3](https://asc.understandingaccounting.org/asc/715/30/#715-30-60-3) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:15.090Z to 2026-09-10T01:00:15.090Z Record version: sha256:542eebb4a36b407690bb637452c94d92ea7368228ace587a5a599f1a61ac04b8 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For the required accounting associated with one-time termination benefits provided to current employees that are involuntarily terminated under the terms of a one-time benefit arrangement, see Subtopic 420-10. ##### [715-30-60-4](https://asc.understandingaccounting.org/asc/715/30/#715-30-60-4) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:15.090Z to 2026-09-10T01:00:15.090Z Record version: sha256:96d09c5917fed88722dcd40795a34f2df2e251dca86f503b44b06fe780c6b563 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For guidance on whether additional termination benefits should be considered one-time termination benefits and accounted for under Subtopic 420-10 or be considered an enhancement to an ongoing benefit arrangement and, therefore, subject to the provisions of either this Topic or Subtopic 712-10, see Subtopic 420-10. #### Income Taxes ##### [715-30-60-5](https://asc.understandingaccounting.org/asc/715/30/#715-30-60-5) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:15.090Z to 2026-09-10T01:00:15.090Z Record version: sha256:4ba3db7384f45105683eb7bc05207eaf0e9caa0493db61a85f4c1bfd19afa2e3 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For guidance on whether an excise tax incurred by an employer on the withdrawal of excess [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.") from its pension plan should be accounted for as an expense in the period of the withdrawal or as an income tax and deferred if there will be related gains (such as a [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.") gain) recognized for financial reporting purposes in subsequent periods, see Subtopic 740-10. #### Business Combinations ##### [715-30-60-6](https://asc.understandingaccounting.org/asc/715/30/#715-30-60-6) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:15.090Z to 2026-09-10T01:00:15.090Z Record version: sha256:79663f54efb775d9d3f18ed4d24497d9600be7c1842675d6f182e44cd17839bc Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For the required pension related accounting for issues arising in connection with a business combination, including plans to terminate certain employees, the measurement of projected benefit obligations and the assignment of the purchase price to individual assets acquired and liabilities assumed, see Subtopic 805-20. #### Consolidation ##### [715-30-60-7](https://asc.understandingaccounting.org/asc/715/30/#715-30-60-7) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:15.090Z to 2026-09-10T01:00:15.090Z Record version: sha256:9fe645ee04eca8c68ba309768c267a13ade5eba4bfff5ecf41741aeea18a9d0c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For guidance on whether to consolidate an employee benefit plan, see Subtopic 810-10. #### Nonmonetary Transactions ##### [715-30-60-8](https://asc.understandingaccounting.org/asc/715/30/#715-30-60-8) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:15.090Z to 2026-09-10T01:00:15.090Z Record version: sha256:47268e598407171fc2f86a0137516ea55a3a00cc3bebf61e85a67c58831bd00c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For the requirements related to [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.") recognition for the spinoff of pension-related assets or obligations transferred in a spinoff of nonmonetary assets to owners of an entity, see Subtopic 845-10. #### Not-for-Profit Entities ##### [715-30-60-9](https://asc.understandingaccounting.org/asc/715/30/#715-30-60-9) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:15.090Z to 2026-09-10T01:00:15.090Z Record version: sha256:a51ccd045af191d3243a9f43f1e5a88892b7af9e2ca47992047c3721165897c2 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For the required accounting by a not-for-profit employer for the gains or losses and the prior service costs or credits that would be recognized in other comprehensive income under the guidance in the General Subsections of this Subtopic, see Subtopic 958-715. #### Regulated Operations ##### [715-30-60-10](https://asc.understandingaccounting.org/asc/715/30/#715-30-60-10) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:15.090Z to 2026-09-10T01:00:15.090Z Record version: sha256:ab7e90859724fc7a2dea5f2fc85ea924488955c7179507453885f8ed10038f25 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For treatment by rate regulated entities of the possible difference between net periodic pension cost as defined in the General Subsections of this Subtopic and amounts of pension cost considered for rate-making purposes, see Subtopic 980-715. Source downloaded (UTC): 2026-09-10T01:00:17.448Z to 2026-09-10T01:00:17.448Z Record version: sha256:c8e713865ba0983ac161163450f1cce60531b94ab4db22bc2781050d46962bbb Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 715-30-65: 65 Transition and Open Effective Date Information [Read section](https://asc.understandingaccounting.org/asc/715/30/#65-transition-and-open-effective-date-information) SEC content: no ##### [715-30-65-1](https://asc.understandingaccounting.org/asc/715/30/#715-30-65-1) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:17.448Z to 2026-09-10T01:00:17.448Z Record version: sha256:fd18f51f1efc59ba675b14ff25a5e43fab85f97b93288c8f16857db5ca1609f6 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Paragraph superseded on 03/23/2010 after the end of the transition period stated in FASB Statement No. 158, _Employers' Accounting for Defined Benefit Pension and Other Postretirement Plans_, and FSP FAS 158-1. Source downloaded (UTC): 2026-09-10T01:00:25.988Z to 2026-09-10T01:00:54.564Z Record version: sha256:358fce79d8a58fe572d37fd647cb58b492b5a341f3f39ab2121b52f97ddeabcb Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 715-60: Compensation—Retirement Benefits — Defined Benefit Plans—Other Postretirement ### Machine-generated study aids ```json { "summary": "ASC 715-60 governs an employer's accounting for single-employer defined benefit postretirement benefit plans other than pensions (OPEB)—chiefly retiree health care, but also retiree life insurance, tuition, day care, legal services and housing subsidies. The employer must recognize the funded status of each plan (fair value of plan assets less the accumulated postretirement benefit obligation) on the balance sheet, attribute the expected postretirement benefit obligation ratably over an attribution period ending at the full eligibility date, and recognize net periodic postretirement benefit cost with delayed recognition of prior service cost, gains/losses, and any transition obligation through other comprehensive income. Separate Subsections address the Medicare Part D subsidy, settlements/curtailments/termination benefits, and split-dollar life insurance arrangements.", "key_points": [ "An employer must recognize the funded status of its OPEB plans in the statement of financial position, aggregating overfunded plans as an asset and underfunded plans as a liability (715-60-25-1), with funded status measured as fair value of plan assets minus the accumulated postretirement benefit obligation (715-60-35-5).", "Net periodic postretirement benefit cost comprises service cost, interest cost, actual return on plan assets, amortization of prior service cost or credit, gain or loss to the extent recognized, and amortization of any transition obligation or asset (715-60-35-9); only the service cost component may be capitalized into inventory or other assets (715-60-35-10A).", "The accounting must follow the substantive plan—the plan as understood by both parties, which may differ from the extant written plan where a past cost-sharing practice or a communicated intent to change cost sharing exists (715-60-35-49; 715-60-35-51), but not where offset by other benefit changes or significant costs such as work stoppages (715-60-35-52 through 35-55).", "An equal amount of the expected postretirement benefit obligation is attributed to each year in the attribution period (benefit-years-of-service approach), beginning at date of hire (or a non-nominal later credited service date) and always ending at the full eligibility date (715-60-35-62, 35-66, 35-68); frontloaded plans are attributed per the benefit formula (715-60-35-64).", "Prior service cost from a benefit improvement is charged to OCI at the amendment date and amortized by assigning an equal amount to each remaining year of service to full eligibility of active participants not yet fully eligible (715-60-35-16 through 35-17); a negative amendment creates a prior service credit that first offsets remaining prior service cost, then transition obligation, with any excess amortized rather than recognized immediately (715-60-35-20).", "Gains and losses are recognized in OCI as they arise and amortized only to the extent the net gain or loss exceeds 10 percent of the greater of the accumulated postretirement benefit obligation or the market-related value of plan assets, divided by the average remaining service period of active participants (715-60-35-25, 35-29).", "Explicit, individually best-estimate and mutually consistent assumptions are required, including discount rates based on returns on high-quality fixed-income investments matched to expected benefit payments, per capita claims cost by age, and health care cost trend rates (715-60-35-72 through 35-79, 35-90, 35-99), measured as of the employer's fiscal year-end (715-60-35-121)." ], "categories": [ "Compensation and benefits", "Recognition", "Subsequent measurement", "Presentation" ], "audience_level": "advanced", "student_note": "OPEB accounting mirrors pension accounting under 715-30 but differs in crucial ways: the attribution period always ends at the full eligibility date (not retirement), salary progression is embedded in the \"accumulated\" obligation for pay-related plans, and benefits in kind require health care cost trend assumptions. The most common mistake is importing 715-30 rules wholesale—715-60-05-7 warns that neither Subtopic overrides the other.", "related_topics": [ "715-30", "715-20", "715-70", "712", "420", "740" ], "key_concepts": [ "accumulated postretirement benefit obligation", "expected postretirement benefit obligation", "net periodic postretirement benefit cost", "substantive plan", "full eligibility date", "attribution period", "health care cost trend rate", "prior service cost and transition obligation" ] } ``` Source downloaded (UTC): 2026-09-10T01:00:25.988Z to 2026-09-10T01:00:25.988Z Record version: sha256:bb920c7c1a06b6380d4d8a28a60ddbedae648244e2fd6280a5b67feeada55c8c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 715-60-00: 00 Status [Read section](https://asc.understandingaccounting.org/asc/715/60/#00-status) SEC content: no ##### [715-60-00-1](https://asc.understandingaccounting.org/asc/715/60/#715-60-00-1) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:25.988Z to 2026-09-10T01:00:25.988Z Record version: sha256:158b2463f786a25642784a08824840e76dadf4342cb7e18fdc5fe44218884f2a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following table identifies the changes made to this Subtopic.
ParagraphActionAccounting Standards UpdateDate
Actuarial Present Value (1st def.)AddedAccounting Standards Update No. 2014-0603/14/2014
Actuarial Present Value (2nd def.)SupersededAccounting Standards Update No. 2014-0603/14/2014
Amortization (1st def.)AmendedAccounting Standards Update No. 2014-0603/14/2014
Assumptions (1st def.)AmendedAccounting Standards Update No. 2014-0603/14/2014
Attribution (1st def.)AmendedAccounting Standards Update No. 2014-0603/14/2014
BenefitsAmendedAccounting Standards Update No. 2016-1912/14/2016
Benefits (3rd def.)AmendedAccounting Standards Update No. 2014-0603/14/2014
Debt Security (1st def.)AddedAccounting Standards Update No. 2016-1912/14/2016
Debt Security (2nd def.)SupersededAccounting Standards Update No. 2016-1912/14/2016
Defined Benefit PlanAddedAccounting Standards Update No. 2014-0603/14/2014
Defined Benefit Postretirement PlanSupersededAccounting Standards Update No. 2014-0603/14/2014
Defined Contribution PlanAmendedAccounting Standards Update No. 2014-0603/14/2014
Discount RateAddedAccounting Standards Update No. 2014-0603/14/2014
Discount RatesSupersededAccounting Standards Update No. 2014-0603/14/2014
Equity Security (2nd def.)AmendedAccounting Standards Update No. 2016-0101/05/2016
Explicit Approach to Assumptions (1st def.)SupersededAccounting Standards Update No. 2014-0603/14/2014
Explicit Approach to Assumptions (2nd def.)AddedAccounting Standards Update No. 2014-0603/14/2014
Funding Policy (3rd def.)AmendedAccounting Standards Update No. 2014-0603/14/2014
Gain or Loss (1st def.)AmendedAccounting Standards Update No. 2014-0603/14/2014
Market-Related Value of Plan Assets (1st def.)AddedAccounting Standards Update No. 2014-0603/14/2014
Market-Related Value of Plan Assets (2nd def.)SupersededAccounting Standards Update No. 2014-0603/14/2014
Multiple-Employer Plan (1st def.)AmendedAccounting Standards Update No. 2014-0603/14/2014
Participating Insurance ContractSupersededAccounting Standards Update No. 2016-1912/14/2016
Participation Right (2nd def.)AmendedAccounting Standards Update No. 2016-1912/14/2016
Plan Amendment (1st def.)AmendedAccounting Standards Update No. 2014-0603/14/2014
Plan Assets (1st def.)AmendedAccounting Standards Update No. 2016-1912/14/2016
Plan Termination (1st def.)AmendedAccounting Standards Update No. 2014-0603/14/2014
Prior Service Cost (1st def.)SupersededAccounting Standards Update No. 2014-0603/14/2014
Prior Service Cost (2nd def.)AddedAccounting Standards Update No. 2014-0603/14/2014
Single-Employer Plan (1st def.)AmendedAccounting Standards Update No. 2014-0603/14/2014
715-60-05-2AmendedAccounting Standards Update No. 2017-0703/10/2017
715-60-05-2AmendedAccounting Standards Update No. 2014-0603/14/2014
715-60-05-3 through 05-5
SupersededAccounting Standards Update No. 2017-0703/10/2017
715-60-05-7AmendedAccounting Standards Update No. 2017-0703/10/2017
715-60-05-9SupersededAccounting Standards Update No. 2017-0703/10/2017
715-60-05-10SupersededAccounting Standards Update No. 2017-0703/10/2017
715-60-05-11AmendedAccounting Standards Update No. 2017-0703/10/2017
715-60-15-9AAddedAccounting Standards Update No. 2012-0410/01/2012
715-60-35-3AmendedAccounting Standards Update No. 2014-0603/14/2014
715-60-35-9AmendedAccounting Standards Update No. 2014-0603/14/2014
715-60-35-10AAddedAccounting Standards Update No. 2017-0703/10/2017
715-60-35-11AmendedAccounting Standards Update No. 2014-0603/14/2014
715-60-35-26AmendedAccounting Standards Update No. 2014-0603/14/2014
715-60-35-71AmendedAccounting Standards Update No. 2014-0603/14/2014
715-60-35-80AmendedAccounting Standards Update No. 2012-0410/01/2012
715-60-35-107AmendedAccounting Standards Update No. 2016-1912/14/2016
715-60-35-112AmendedAccounting Standards Update No. 2016-1912/14/2016
715-60-35-115AmendedAccounting Standards Update No. 2016-1912/14/2016
715-60-35-123AAddedAccounting Standards Update No. 2015-0404/15/2015
715-60-35-123BAddedAccounting Standards Update No. 2015-0404/15/2015
715-60-35-126AAddedAccounting Standards Update No. 2015-0404/15/2015
715-60-35-126BAddedAccounting Standards Update No. 2015-0404/15/2015
715-60-35-140AmendedAccounting Standards Update No. 2014-0603/14/2014
715-60-35-156AmendedAccounting Standards Update No. 2016-1912/14/2016
715-60-35-163AmendedAccounting Standards Update No. 2014-0603/14/2014
715-60-35-179AmendedAccounting Standards Update No. 2014-0603/14/2014
715-60-55-4AmendedAccounting Standards Update No. 2014-0603/14/2014
715-60-55-13AmendedAccounting Standards Update No. 2014-0603/14/2014
715-60-55-20AmendedAccounting Standards Update No. 2014-0603/14/2014
715-60-55-86AmendedAccounting Standards Update No. 2017-0703/10/2017
715-60-55-89AmendedAccounting Standards Update No. 2017-0703/10/2017
715-60-55-92AmendedAccounting Standards Update No. 2017-0703/10/2017
715-60-55-106AmendedAccounting Standards Update No. 2014-0603/14/2014
715-60-55-161AmendedAccounting Standards Update No. 2014-0603/14/2014
715-60-60-1AmendedAccounting Standards Update No. 2014-0603/14/2014
Source downloaded (UTC): 2026-09-10T01:00:29.389Z to 2026-09-10T01:00:29.389Z Record version: sha256:a91e1825dbdf7d9c1e7305199b6800dbb19c94978d8d29e946c5db29a0297767 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 715-60-05: 05 Overview and Background [Read section](https://asc.understandingaccounting.org/asc/715/60/#05-overview-and-background) SEC content: no ##### [715-60-05-1](https://asc.understandingaccounting.org/asc/715/60/#715-60-05-1) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:29.389Z to 2026-09-10T01:00:29.389Z Record version: sha256:77e5729223c874c0362bb42205a0a1d64ef09c9a7905c2a0e56cb54334d30d7e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subtopic provides accounting and reporting guidance for other [postretirement benefits](https://asc.understandingaccounting.org/glossary/p/#postretirement-benefits "All forms of benefits, other than retirement income, provided by an employer to retirees. Those benefits may be defined in terms of specified benefits, such as health care, tuition assistance, or legal services, that are provided to retirees as the need for those benefits arises, such as certain health care benefits, or they may be defined in terms of monetary amounts that become payable on the occurrence of a specified event, such as life insurance benefits."). The guidance in this Subtopic is presented in the following four Subsections: 1. a General 2. b Medicare Prescription Drug, Improvement, and Modernization Act 3. c Settlements, Curtailments, and Certain Termination Benefits 4. d Split-Dollar Life Insurance Arrangements. ##### [715-60-05-2](https://asc.understandingaccounting.org/asc/715/60/#715-60-05-2) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:29.389Z to 2026-09-10T01:00:29.389Z Record version: sha256:a110b3a840b6ed6a849af5d73281a97edbff104b28db3d3bbe0f2d9187a243e7 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The General Subsections provide guidance on an employer's accounting and reporting for a [defined benefit postretirement benefit 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.)"), that is, a [single-employer plan](https://asc.understandingaccounting.org/glossary/s/#single-employer-plan "A pension plan or other postretirement benefit plan that is maintained by one employer. The term also may be used to describe a plan that is maintained by related parties such as a parent and its subsidiaries.") that defines the nonpension [postretirement benefits](https://asc.understandingaccounting.org/glossary/p/#postretirement-benefits "All forms of benefits, other than retirement income, provided by an employer to retirees. Those benefits may be defined in terms of specified benefits, such as health care, tuition assistance, or legal services, that are provided to retirees as the need for those benefits arises, such as certain health care benefits, or they may be defined in terms of monetary amounts that become payable on the occurrence of a specified event, such as life insurance benefits.") to be provided to [retirees](https://asc.understandingaccounting.org/glossary/r/#retirees "Collectively, that group of plan participants that includes retired employees, their beneficiaries, and covered dependents."). This Subtopic refers to these [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.") as postretirement benefits and to these [plans](https://asc.understandingaccounting.org/glossary/p/#plan "An arrangement that is mutually understood by an employer and its employees, whereby an employer undertakes to provide its employees with benefits after they retire in exchange for their services over a specified period of time, upon attaining a specified age while in service, or a combination of both. A plan may be written or it may be implied by a well-defined, although perhaps unwritten, practice of paying postretirement benefits or from oral representations made to current or former employees. See Substantive Plan.") as postretirement plans. Generally, the amount of those benefits depends on the [benefit formula](https://asc.understandingaccounting.org/glossary/b/#benefit-formula "The basis for determining benefits to which participants may be entitled under a postretirement benefit plan. A plan's benefit formula specifies the years of service to be rendered, age to be attained while in service, or a combination of both that must be met for an employee to be eligible to receive benefits under the plan. A plan's benefit formula may also define the beginning of the credited service period and the benefits earned for specific periods of service.") (which may include factors such as the number of years of service rendered or the employee's compensation before retirement or termination), the longevity of the retiree and any beneficiaries and covered dependents, and the incidence of events requiring benefit payments (for example, illnesses affecting the amount of health care required). ##### [715-60-05-3](https://asc.understandingaccounting.org/asc/715/60/#715-60-05-3) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:29.389Z to 2026-09-10T01:00:29.389Z Record version: sha256:b296e8e777f49b3046b764b0e34948c86403a4868a7705a9eb8e95250a3e127d 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/). ##### [715-60-05-4](https://asc.understandingaccounting.org/asc/715/60/#715-60-05-4) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:29.389Z to 2026-09-10T01:00:29.389Z Record version: sha256:f7be325ac5ab6942b6229056ec0621a721895bfaeedaa4ef07f62ee80875ab17 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/). ##### [715-60-05-5](https://asc.understandingaccounting.org/asc/715/60/#715-60-05-5) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:29.389Z to 2026-09-10T01:00:29.389Z Record version: sha256:c998c51e1adbfcbdfbcb3844b1cffef16df66bd8030e3a09c45b290abbc8d4e7 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/). ##### [715-60-05-6](https://asc.understandingaccounting.org/asc/715/60/#715-60-05-6) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:29.389Z to 2026-09-10T01:00:29.389Z Record version: sha256:0f4f057f992c82780e20d72ce67e143e17f43ac9690d240af1663100eaa981ca Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Although this Subtopic applies to all defined benefit postretirement plans other than pensions, [postretirement health care benefits](https://asc.understandingaccounting.org/glossary/p/#postretirement-health-care-benefits "A form of postretirement benefit provided by an employer to retirees for defined health care services or coverage of defined health care costs, such as hospital and medical coverage, dental benefits, and eye care.") are likely to be the most significant in terms of cost and prevalence, and certain of the issues that arise in measuring those benefits are unique. ##### [715-60-05-7](https://asc.understandingaccounting.org/asc/715/60/#715-60-05-7) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:29.389Z to 2026-09-10T01:00:29.389Z Record version: sha256:021897631ff342fa9e28a8330e9e4824494501db79e6689d48b2fc4cee7eef5d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Many of the provisions in this Subtopic are the same as or similar to the provisions of Subtopic 715-30. 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 this Subtopic and that Subtopic, and therefore the specific guidance in one Subtopic should not be used to override guidance of the other. ### Medicare Prescription Drug, Improvement, and Modernization Act ##### [715-60-05-8](https://asc.understandingaccounting.org/asc/715/60/#715-60-05-8) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:29.389Z to 2026-09-10T01:00:29.389Z Record version: sha256:ea750dc6c0222dd37ff35c50a44deeaa5edf34fc02f003c0d314b9290098136d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The Medicare Prescription Drug, Improvement, and Modernization Act Subsections provide guidance on the accounting for the effects of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 for employers that sponsor postretirement health care plans that provide prescription drug [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."). ##### [715-60-05-9](https://asc.understandingaccounting.org/asc/715/60/#715-60-05-9) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:29.389Z to 2026-09-10T01:00:29.389Z Record version: sha256:750bb719b6741cbf722e2978de2a16c8413152b51be2cdc5ce6c488e173b4f74 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/). ##### [715-60-05-10](https://asc.understandingaccounting.org/asc/715/60/#715-60-05-10) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:29.389Z to 2026-09-10T01:00:29.389Z Record version: sha256:495521e250cf949aca87990bb9db12e7cd072ed0b188eced7ffd297521af1b30 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/). ##### [715-60-05-11](https://asc.understandingaccounting.org/asc/715/60/#715-60-05-11) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:29.389Z to 2026-09-10T01:00:29.389Z Record version: sha256:7b72f36514889c1230e8369370af35983454266a9ed2d2a0f0b55a086e254e35 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The Medicare Prescription Drug, Improvement, and Modernization Act Subsections make reference to various provisions of the Act and, in many cases, paraphrase those provisions. However, nothing in these Subsections should be considered a definitive interpretation of any provision of the Act for any purpose. ### Settlements, Curtailments, and Certain Termination Benefits ##### [715-60-05-12](https://asc.understandingaccounting.org/asc/715/60/#715-60-05-12) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:29.389Z to 2026-09-10T01:00:29.389Z Record version: sha256:d5d9b156c2ddfde0b1d55e2c12fbe2002590df0f0029fff5a6e915013ee235c5 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The Settlements, Curtailments, and Certain Termination Benefits Subsections provide guidance on 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 postretirement obligations, for [curtailment of a defined benefit postretirement plan](https://asc.understandingaccounting.org/glossary/c/#curtailment-of-a-postretirement-benefit-plan "An event that significantly reduces the expected years of future service of active plan participants or eliminates the accrual of defined benefits for some or all of the future services of a significant number of active plan participants."), and 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."). ### Split-Dollar Life Insurance Arrangements ##### [715-60-05-13](https://asc.understandingaccounting.org/asc/715/60/#715-60-05-13) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:29.389Z to 2026-09-10T01:00:29.389Z Record version: sha256:df4a688211f1a42cb322c71a06df9c8799b6fe8ddedcc17c94595aa2d75e0ad1 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The Split-Dollar Life Insurance Arrangements Subsections provide guidance on accounting and reporting for split-dollar life insurance arrangements. ##### [715-60-05-14](https://asc.understandingaccounting.org/asc/715/60/#715-60-05-14) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:29.389Z to 2026-09-10T01:00:29.389Z Record version: sha256:1604f3f6dc986967a08b59d13b251d5a2b1a192980267976c807b48104395467 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Entities purchase life insurance for various reasons that may include protecting against the loss of key employees, funding deferred compensation and postretirement benefit obligations, and providing an investment return. One form of this insurance is split-dollar life insurance. The structure of split-dollar life insurance arrangements can be complex and varied. ##### [715-60-05-15](https://asc.understandingaccounting.org/asc/715/60/#715-60-05-15) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:29.389Z to 2026-09-10T01:00:29.389Z Record version: sha256:9b58a8762b9cb8c73c8873152f3e97b6edfcbbfbfd0e8404d4eb33e338b4a79f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The two most common types of arrangements are [endorsement split-dollar life insurance](https://asc.understandingaccounting.org/glossary/e/#endorsement-split-dollar-life-insurance "A split-dollar life insurance arrangement in which the entity owns and controls the insurance policy. The employer enters into a separate agreement that splits the policy benefits between the employer and the employee. The employer owns the policy, controls all rights of ownership, and may terminate the insurance policy (and, in turn, the policy benefits promised to the employee). To effect the split-dollar arrangement, the employer endorses a portion of the death benefits to the employee (the employee designates a beneficiary for this portion of the death benefits). Upon the death of the employee, the employee's beneficiary typically receives the designated portion of the death benefits directly from the insurance entity and the employer receives the remainder of the death benefits.") arrangements and [collateral assignment split-dollar life insurance](https://asc.understandingaccounting.org/glossary/c/#collateral-split-dollar-life-insurance "A split-dollar life insurance arrangement in which the employee (or the employee's estate or a trust controlled by the employee, referred to as the employee) owns and controls the insurance policy.") arrangements. Generally, the difference between these arrangements is dependent on the ownership and control of the life insurance policy. Source downloaded (UTC): 2026-09-10T01:00:31.758Z to 2026-09-10T01:00:31.758Z Record version: sha256:0038579d115cc497d776ea29e9d6a220fda5fa7b4b8bc1678bf20256ee9f81f5 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 715-60-15: 15 Scope and Scope Exceptions [Read section](https://asc.understandingaccounting.org/asc/715/60/#15-scope-and-scope-exceptions) SEC content: no #### Overall Guidance ##### [715-60-15-1](https://asc.understandingaccounting.org/asc/715/60/#715-60-15-1) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:31.758Z to 2026-09-10T01:00:31.758Z Record version: sha256:9959ee9627f742890c8b279f01dfc7e6697ceacb9fbded04b82da81b17073c72 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subtopic follows the same Scope and Scope Exceptions as outlined in the Overall Subtopic, see Section 715-10-15, with specific qualifications and exceptions noted below. ##### [715-60-15-2](https://asc.understandingaccounting.org/asc/715/60/#715-60-15-2) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:31.758Z to 2026-09-10T01:00:31.758Z Record version: sha256:ebe7e7ff45c3d1092f80486c4057ddf5a16b6bbceeaefed8bcf5b7c380e561d8 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The General Subsection of this Section establishes the pervasive scope of this Subtopic, with specific exceptions noted in the other Subsections of this Section. #### Transactions ##### [715-60-15-3](https://asc.understandingaccounting.org/asc/715/60/#715-60-15-3) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:31.758Z to 2026-09-10T01:00:31.758Z Record version: sha256:42d471441cf8c011dbe55ab6d9b027e96243ebaf32ccdd2d0750f7d7729ef1ec Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The guidance in the General Subsections applies to the following plans and [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."): 1. a A [single-employer plan](https://asc.understandingaccounting.org/glossary/s/#single-employer-plan "A pension plan or other postretirement benefit plan that is maintained by one employer. The term also may be used to describe a plan that is maintained by related parties such as a parent and its subsidiaries.") that defines the [postretirement benefits](https://asc.understandingaccounting.org/glossary/p/#postretirement-benefits "All forms of benefits, other than retirement income, provided by an employer to retirees. Those benefits may be defined in terms of specified benefits, such as health care, tuition assistance, or legal services, that are provided to retirees as the need for those benefits arises, such as certain health care benefits, or they may be defined in terms of monetary amounts that become payable on the occurrence of a specified event, such as life insurance benefits.") to be provided to [retirees](https://asc.understandingaccounting.org/glossary/r/#retirees "Collectively, that group of plan participants that includes retired employees, their beneficiaries, and covered dependents."). This includes postretirement benefits expected to be provided by an employer to current and former employees (including retirees, disabled employees, and other former employees who are expected to receive postretirement benefits), their beneficiaries, and covered dependents, pursuant to the terms of an employer's undertaking to provide those benefits. ##### [715-60-15-4](https://asc.understandingaccounting.org/asc/715/60/#715-60-15-4) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:31.758Z to 2026-09-10T01:00:31.758Z Record version: sha256:596f63b2fd606199ebae7a0f7d5b11cde818d7430a2a35ab38736d6e7538c4e1 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Other postretirement benefits include, but are not limited to, postretirement health care; life insurance provided outside a pension [plan](https://asc.understandingaccounting.org/glossary/p/#plan "An arrangement that is mutually understood by an employer and its employees, whereby an employer undertakes to provide its employees with benefits after they retire in exchange for their services over a specified period of time, upon attaining a specified age while in service, or a combination of both. A plan may be written or it may be implied by a well-defined, although perhaps unwritten, practice of paying postretirement benefits or from oral representations made to current or former employees. See Substantive Plan.") to retirees; and other welfare benefits such as tuition assistance, day care, legal services, and housing subsidies provided after retirement. Often those benefits are in the form of a reimbursement to plan participants or direct payment to providers for the cost of specified services as the need for those services arises, but they may also include benefits payable as a lump sum, such as death benefits. Much of the guidance in this Subtopic focuses on postretirement health care plans. Nevertheless, this Subtopic applies equally to all [postretirement benefits other than pensions](https://asc.understandingaccounting.org/glossary/p/#postretirement-benefits-other-than-pensions "See Postretirement Benefits."). ##### [715-60-15-5](https://asc.understandingaccounting.org/asc/715/60/#715-60-15-5) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:31.758Z to 2026-09-10T01:00:31.758Z Record version: sha256:8fc2c466641ff57044998d5dd46217feb14ad4916c8973f03a743c4274c85754 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The guidance in the General Subsections applies to health and other welfare benefits expected to be provided to disabled employees, whether in cash or in kind, for example, disability medical benefits. For example, the provisions of the postretirement health care plan may provide postretirement health care coverage after a disabled employee attains a specified number of years of credited service (which may include credit for periods after the employee is disabled), with a separate disability plan that provides health benefits before that date. Or, the postretirement health care plan may have special provisions for disabled employees that entitle them to benefit coverage under the [postretirement benefit plan](https://asc.understandingaccounting.org/glossary/p/#postretirement-benefit-plan "See Plan.") at a date earlier than that coverage would commence for other employees who are not disabled. ##### [715-60-15-6](https://asc.understandingaccounting.org/asc/715/60/#715-60-15-6) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:31.758Z to 2026-09-10T01:00:31.758Z Record version: sha256:d7931d71ec81c67683139b7d7e74451c2294ef50aa7dda4071a900e4f8bae58b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The guidance in the General Subsections does not apply to the following plans and benefits: 1. a Pension or life insurance benefits provided through a pension plan. The accounting for those benefits is set forth in Subtopic 715-30. 2. b Disability benefits paid to former or inactive employees not on disability retirement (such benefits shall be accounted for under Topic 712). However, the measurement guidance in this Subtopic may be useful in applying the provisions of that topic. 3. c Disability income benefits paid pursuant to a pension plan (such benefits shall be accounted for under Subtopic 715-30). 4. d An employee's right to continue health care coverage under the provisions of the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA). This right does not constitute a postretirement benefit plan per se because an employee need not be a retiree to receive that benefit. It is a right generally available upon termination of employment. If an employee voluntarily elects at retirement to continue health care coverage provided through the active employee health care plan and the cost to the employer of their continuing coverage exceeds the retirees' contributions, the employer shall account for the excess cost in accordance with Topic 712. #### Other Considerations ##### [715-60-15-7](https://asc.understandingaccounting.org/asc/715/60/#715-60-15-7) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:31.758Z to 2026-09-10T01:00:31.758Z Record version: sha256:448d46b91cfa24af3a33982c53a8eed5725af9d851350f53cfd9c9d4ca44a7d8 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A postretirement benefit plan may be part of a larger plan or arrangement that provides benefits currently to active employees as well as to retirees. In those circumstances, the promise to provide benefits to present and future retirees under the plan shall be segregated from the promise to provide benefits currently to active employees and shall be accounted for in accordance with the provisions of this Subtopic. ##### [715-60-15-8](https://asc.understandingaccounting.org/asc/715/60/#715-60-15-8) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:31.758Z to 2026-09-10T01:00:31.758Z Record version: sha256:74b837617b90743cea6080cd05d6bf4cea49fde0642caff4f092672566f1c52c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In some cases, an employer may limit its obligation through an individual or an aggregate cap on the employer's cost or benefit obligation. For example, an employer may elect to limit its annual postretirement benefit obligation for each retired [plan participant](https://asc.understandingaccounting.org/glossary/p/#plan-participant "Any employee or former employee who has rendered service in the credited service period and is expected to receive employer-provided benefits under the postretirement benefit plan, including benefits to or for any beneficiaries and covered dependents. See Active Plan Participant.") to a maximum of $5,000. Or, an employer may elect to limit its share of the aggregate cost of covered [postretirement health care benefits](https://asc.understandingaccounting.org/glossary/p/#postretirement-health-care-benefits "A form of postretirement benefit provided by an employer to retirees for defined health care services or coverage of defined health care costs, such as hospital and medical coverage, dental benefits, and eye care.") for a period to an amount determined based on an average per capita cost per retired plan participant. Plans of that nature are considered to be defined benefit postretirement plans. See paragraphs [715-60-55-96 through 55-102](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-96) for an illustration of the measurement considerations for defined dollar capped plans and paragraphs [715-60-55-2 through 55-3](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-2) for implementation guidance on capped plans. ##### [715-60-15-9](https://asc.understandingaccounting.org/asc/715/60/#715-60-15-9) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:31.758Z to 2026-09-10T01:00:31.758Z Record version: sha256:0442aaa784aea2ae1b197936ab31d4f7e96a13bbd7073004d25648d83f7dc742 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Absent evidence to the contrary, it shall be presumed that an employer that has provided postretirement benefits in the past or is currently promising those benefits to employees will continue to provide those future benefits. #### Plans with Characteristics of both a Defined Contribution and a Defined Benefit Plan ##### [715-60-15-9A](https://asc.understandingaccounting.org/asc/715/60/#715-60-15-9A) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:31.758Z to 2026-09-10T01:00:31.758Z Record version: sha256:ef10f51797e8d9edfd3da84ac1f54e41729cc548187761d059fda5730005ecc5 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See paragraph [715-70-15-2](https://asc.understandingaccounting.org/asc/715/70/#715-70-15-2) for guidance for plans with characteristics of both a defined contribution and a defined benefit plan. ### Medicare Prescription Drug, Improvement, and Modernization Act #### Overall Guidance ##### [715-60-15-10](https://asc.understandingaccounting.org/asc/715/60/#715-60-15-10) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:31.758Z to 2026-09-10T01:00:31.758Z Record version: sha256:4e7cc749b2fb5933742094c63f78a4ee0f7e9ce78045b7898d44cfee615dfea7 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The Medicare Prescription Drug, Improvement, and Modernization Act Subsections follow the same Scope and Scope Exceptions as outlined in the General Subsection of this Subtopic, see paragraph [715-60-15-1](https://asc.understandingaccounting.org/asc/715/60/#715-60-15-1), with specific exceptions noted below. #### Transactions ##### [715-60-15-11](https://asc.understandingaccounting.org/asc/715/60/#715-60-15-11) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:31.758Z to 2026-09-10T01:00:31.758Z Record version: sha256:3d1873b0ad8f31f7dba00d313762ef083f0064204e0d9a72b1368905189e3893 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The guidance in the Medicare Prescription Drug, Improvement, and Modernization Act Subsections applies to the following plans and [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."): 1. a A single-employer defined benefit postretirement health care [plan](https://asc.understandingaccounting.org/glossary/p/#plan "An arrangement that is mutually understood by an employer and its employees, whereby an employer undertakes to provide its employees with benefits after they retire in exchange for their services over a specified period of time, upon attaining a specified age while in service, or a combination of both. A plan may be written or it may be implied by a well-defined, although perhaps unwritten, practice of paying postretirement benefits or from oral representations made to current or former employees. See Substantive Plan.") that has both of the following characteristics: 1. 1 The employer has concluded that prescription drug benefits available under the plan to some or all participants for some or all future years are "actuarially equivalent" to Medicare Part D and thus qualify for the subsidy under the Medicare Prescription Drug, Improvement, and Modernization Act. 2. 2 The expected subsidy will offset or reduce the employer's share of the cost of the underlying postretirement prescription drug coverage on which the subsidy is based. ##### [715-60-15-12](https://asc.understandingaccounting.org/asc/715/60/#715-60-15-12) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:31.758Z to 2026-09-10T01:00:31.758Z Record version: sha256:7e5322dd71ab7b775a1525a6cca77a8c37265d2768c676b5382a32e5c5bc6a93 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The guidance in the Medicare Prescription Drug, Improvement, and Modernization Act Subsections does not address the following: 1. a Situations that may arise in which the expected subsidy exceeds the employer's share of the cost of the underlying postretirement prescription drug coverage on which the subsidy is based 2. b Multiemployer health and welfare benefit plans. #### Other Considerations ##### [715-60-15-13](https://asc.understandingaccounting.org/asc/715/60/#715-60-15-13) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:31.758Z to 2026-09-10T01:00:31.758Z Record version: sha256:98f40879b3788fdbbc01c6dd425091c8907787a4940cbf165809af86ee8eb692 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Although the Medicare Prescription Drug, Improvement, and Modernization Act Subsections provide limited guidance on certain other related aspects of accounting and disclosure necessitated by the Act (for example, changes in assumed participation rates and [health care cost trend rates](https://asc.understandingaccounting.org/glossary/h/#health-care-cost-trend-rate "An assumption about the annual rates of change in the cost of health care benefits currently provided by the postretirement benefit plan, due to factors other than changes in the composition of the plan population by age and dependency status, for each year from the measurement date until the end of the period in which benefits are expected to be paid. The health care cost trend rates implicitly consider estimates of health care inflation, changes in health care utilization or delivery patterns, technological advances, and changes in the health status of the plan participants. Differing types of services, such as hospital care and dental care, may have different trend rates."), as well as income tax accounting), that guidance is not intended to supersede or in any way limit the application of other relevant authoritative literature. ### Settlements, Curtailments, and Certain Termination Benefits #### Overall Guidance ##### [715-60-15-14](https://asc.understandingaccounting.org/asc/715/60/#715-60-15-14) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:31.758Z to 2026-09-10T01:00:31.758Z Record version: sha256:2dd9aedb6b26cd612f1a1e2a8771d8b1892f69cbc93a5ef267a2f1630c8caeae Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The Settlements, Curtailments, and Certain Termination Benefits Subsections follow the same Scope and Scope Exceptions as outlined in the General Subsection of this Subtopic, see paragraph [715-60-15-1](https://asc.understandingaccounting.org/asc/715/60/#715-60-15-1), with specific exceptions noted below. #### Transactions ##### [715-60-15-15](https://asc.understandingaccounting.org/asc/715/60/#715-60-15-15) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:31.758Z to 2026-09-10T01:00:31.758Z Record version: sha256:8d06d2c53937cb64c92d061d931033f3a94f2f4b6ed489815d131ec28e0a8725 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The guidance in the Settlements, Curtailments, and Certain Termination Benefits Subsections applies to the following transactions and activities: 1. a [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 all or a part of an employer's [accumulated postretirement benefit obligation](https://asc.understandingaccounting.org/glossary/a/#accumulated-postretirement-benefit-obligation "The actuarial present value as of a particular date of all future benefits attributed to an employee's service rendered to that date assuming the plan continues in effect and that all assumptions about future events are fulfilled. The accumulated postretirement benefit obligation generally reflects a ratable allocation of expected future benefits to employee service already rendered in the attribution period. Before an employee's full eligibility date, the accumulated postretirement benefit obligation as of a particular date for an employee is the portion of the expected postretirement benefit obligation attributed to that employee's service rendered to that date; on and after the full eligibility date, the accumulated and expected postretirement benefit obligations for an employee are the same.") or [curtailment of a postretirement benefit plan](https://asc.understandingaccounting.org/glossary/c/#curtailment-of-a-postretirement-benefit-plan "An event that significantly reduces the expected years of future service of active plan participants or eliminates the accrual of defined benefits for some or all of the future services of a significant number of active plan participants.") 2. b Other [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.") not otherwise addressed in the following: 1. 1 Topic 420 2. 2 Topic 710 3. 3 Topic 712 4. 4 Subtopic 715-30. ##### [715-60-15-16](https://asc.understandingaccounting.org/asc/715/60/#715-60-15-16) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:31.758Z to 2026-09-10T01:00:31.758Z Record version: sha256:0ad7b097ed108878a4d5f9e6686b6eb430809601446ccf0cba736acee68ad1e8 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Examples of transactions that constitute a settlement include making lump-sum cash payments to [plan](https://asc.understandingaccounting.org/glossary/p/#plan "An arrangement that is mutually understood by an employer and its employees, whereby an employer undertakes to provide its employees with benefits after they retire in exchange for their services over a specified period of time, upon attaining a specified age while in service, or a combination of both. A plan may be written or it may be implied by a well-defined, although perhaps unwritten, practice of paying postretirement benefits or from oral representations made to current or former employees. See Substantive Plan.") participants in exchange for their rights to receive specified [postretirement benefits](https://asc.understandingaccounting.org/glossary/p/#postretirement-benefits "All forms of benefits, other than retirement income, provided by an employer to retirees. Those benefits may be defined in terms of specified benefits, such as health care, tuition assistance, or legal services, that are provided to retirees as the need for those benefits arises, such as certain health care benefits, or they may be defined in terms of monetary amounts that become payable on the occurrence of a specified event, such as life insurance benefits.") and purchasing long-term nonparticipating insurance contracts for the accumulated postretirement benefit obligation for some or all of the plan participants. ##### [715-60-15-17](https://asc.understandingaccounting.org/asc/715/60/#715-60-15-17) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:31.758Z to 2026-09-10T01:00:31.758Z Record version: sha256:0fd60e10a98868f2821b71208cf389a49f71ef65e40ae54adbf8dedd313723d5 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Curtailments include the following: 1. a Termination of employees' services earlier than expected, which may or may not involve closing a facility or discontinuing a component of an entity 2. b Termination or suspension of a plan so that employees do not earn additional [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.") for future service. In the latter situation, future service may be counted toward eligibility for benefits accumulated based on past service. ##### [715-60-15-18](https://asc.understandingaccounting.org/asc/715/60/#715-60-15-18) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:31.758Z to 2026-09-10T01:00:31.758Z Record version: sha256:71a46dd594202c0e47cf2df51021de4f728a5fd9b9fe27278a9778c4fb81fa97 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The guidance in the Settlements, Curtailments, and Certain Termination Benefits Subsections does not apply to the following transactions and activities: 1. a Other termination benefits addressed in the following: 1. 1 Topic 420 2. 2 Topic 710 3. 3 Topic 712 4. 4 Subtopic 715-30. ### Split-Dollar Life Insurance Arrangements #### Overall Guidance ##### [715-60-15-19](https://asc.understandingaccounting.org/asc/715/60/#715-60-15-19) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:31.758Z to 2026-09-10T01:00:31.758Z Record version: sha256:569ddef69dd1996a9b42a35a988143033622e5b60a295a80e8b9657f463b2fb6 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The Split-Dollar Life Insurance Arrangements Subsections follow the same Scope and Scope Exceptions as outlined in the General Subsection of this Subtopic, see paragraph [715-60-15-1](https://asc.understandingaccounting.org/asc/715/60/#715-60-15-1), with specific exceptions noted below. #### Transactions ##### [715-60-15-20](https://asc.understandingaccounting.org/asc/715/60/#715-60-15-20) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:31.758Z to 2026-09-10T01:00:31.758Z Record version: sha256:decb9d30156e9bdb3d0e60f157f14c02115d50e0e8891d10eeb22922b08d5fe1 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The guidance in the Split-Dollar Life Insurance Arrangements Subsections applies to the following plans and [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."): 1. a [Endorsement split-dollar life insurance](https://asc.understandingaccounting.org/glossary/e/#endorsement-split-dollar-life-insurance "A split-dollar life insurance arrangement in which the entity owns and controls the insurance policy. The employer enters into a separate agreement that splits the policy benefits between the employer and the employee. The employer owns the policy, controls all rights of ownership, and may terminate the insurance policy (and, in turn, the policy benefits promised to the employee). To effect the split-dollar arrangement, the employer endorses a portion of the death benefits to the employee (the employee designates a beneficiary for this portion of the death benefits). Upon the death of the employee, the employee's beneficiary typically receives the designated portion of the death benefits directly from the insurance entity and the employer receives the remainder of the death benefits.") arrangements that provide a benefit to an employee that extends to postretirement periods. 2. b [Collateral split-dollar life insurance](https://asc.understandingaccounting.org/glossary/c/#collateral-split-dollar-life-insurance "A split-dollar life insurance arrangement in which the employee (or the employee's estate or a trust controlled by the employee, referred to as the employee) owns and controls the insurance policy.") arrangements that provide a benefit to an employee that extends to postretirement periods. ##### [715-60-15-21](https://asc.understandingaccounting.org/asc/715/60/#715-60-15-21) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:31.758Z to 2026-09-10T01:00:31.758Z Record version: sha256:45fc0bc7f672f2a61ea3a54f11ca631786854dfc3504dc2bd174fb5d11a172be Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The guidance in the Split-Dollar Life Insurance Arrangements Subsections does not apply to the following plans and benefits: 1. a A split-dollar life insurance arrangement that provides a specified benefit to an employee that is limited to the employee's active service period with an employer. Source downloaded (UTC): 2026-09-10T01:00:39.096Z to 2026-09-10T01:00:39.096Z Record version: sha256:63eaff661c6f4fa14015a04d42ae7e139c39b14f257865fb85689e50c8870388 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 715-60-25: 25 Recognition [Read section](https://asc.understandingaccounting.org/asc/715/60/#25-recognition) SEC content: no #### Recognition of Liabilities and Assets ##### [715-60-25-1](https://asc.understandingaccounting.org/asc/715/60/#715-60-25-1) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:39.096Z to 2026-09-10T01:00:39.096Z Record version: sha256:2b1d6bf3343a4515663ae78a20ec6d28d95b66ae0b959bd3660de63e23c43e95 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An employer that sponsors one or more single-employer defined benefit postretirement plans other than pensions shall recognize in its statement of financial position the funded statuses of those plans. 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. ##### [715-60-25-2](https://asc.understandingaccounting.org/asc/715/60/#715-60-25-2) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:39.096Z to 2026-09-10T01:00:39.096Z Record version: sha256:f80f7bf9dc5a0592d0142c7db026a124844cb366d0bba15c67e3983c0c8f3f0b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. As indicated in paragraphs [715-60-35-125 through 35-126](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-125) remeasurement of both plan assets and the accumulated postretirement benefit obligation may be necessary. 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. #### Participation Rights ##### [715-60-25-3](https://asc.understandingaccounting.org/asc/715/60/#715-60-25-3) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:39.096Z to 2026-09-10T01:00:39.096Z Record version: sha256:7be4a61e508f08ead225d150ecfe88b7f52c192141077dce69084ac27dfdb544 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. To the extent that [insurance contracts](https://asc.understandingaccounting.org/glossary/i/#insurance-contract "A contract in which an insurance entity unconditionally undertakes a legal obligation to provide specified benefits to specific individuals in return for a fixed consideration or premium. An insurance contract is irrevocable and involves the transfer of significant risk from the employer (or the plan) to the insurance entity.") meeting the conditions for treatment as insurance contracts in paragraph [715-60-35-110](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-110) are purchased during the current period to cover [postretirement benefits](https://asc.understandingaccounting.org/glossary/p/#postretirement-benefits "All forms of benefits, other than retirement income, provided by an employer to retirees. Those benefits may be defined in terms of specified benefits, such as health care, tuition assistance, or legal services, that are provided to retirees as the need for those benefits arises, such as certain health care benefits, or they may be defined in terms of monetary amounts that become payable on the occurrence of a specified event, such as life insurance benefits.") attributed to service in that period (such as life insurance [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.")), the cost of those benefits shall be the cost of purchasing the coverage under the contracts, except the cost of the [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."), which shall be recognized at the date of purchase as an asset. ### Settlements, Curtailments, and Certain Termination Benefits ##### [715-60-25-4](https://asc.understandingaccounting.org/asc/715/60/#715-60-25-4) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:39.096Z to 2026-09-10T01:00:39.096Z Record version: sha256:2d7a685dc35b1530e1ba6b5e34e16fb919d3a0d9864a806c12a1581cde2c304a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The Settlements, Curtailments, and Certain Termination Benefits Subsections provide recognition guidance for the postretirement benefit incentive to be received by employees in exchange for early termination. [Postretirement benefits](https://asc.understandingaccounting.org/glossary/p/#postretirement-benefits "All forms of benefits, other than retirement income, provided by an employer to retirees. Those benefits may be defined in terms of specified benefits, such as health care, tuition assistance, or legal services, that are provided to retirees as the need for those benefits arises, such as certain health care benefits, or they may be defined in terms of monetary amounts that become payable on the occurrence of a specified event, such as life insurance benefits.") offered as special or contractual termination benefits shall be recognized in accordance with paragraph [715-30-25-10](https://asc.understandingaccounting.org/asc/715/30/#715-30-25-10). ##### [715-60-25-5](https://asc.understandingaccounting.org/asc/715/60/#715-60-25-5) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:39.096Z to 2026-09-10T01:00:39.096Z Record version: sha256:1464623a285e47f25d38aaeaf86b42d2c2edb34fba3d4b9eea312859e8264290 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Situations involving special or contractual [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.") may also result in a curtailment to be accounted for under paragraphs [715-60-35-161 through 35-171](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-161) . ##### [715-60-25-6](https://asc.understandingaccounting.org/asc/715/60/#715-60-25-6) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:39.096Z to 2026-09-10T01:00:39.096Z Record version: sha256:c173395e918f7a752ab80343671766652b464264462e1b16f73eae6e7dd084f4 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The liability and loss recognized for employees who accept an offer of special termination benefits to be provided by a [postretirement benefit plan](https://asc.understandingaccounting.org/glossary/p/#postretirement-benefit-plan "See Plan.") shall be the difference between: 1. a The [accumulated postretirement benefit obligation](https://asc.understandingaccounting.org/glossary/a/#accumulated-postretirement-benefit-obligation "The actuarial present value as of a particular date of all future benefits attributed to an employee's service rendered to that date assuming the plan continues in effect and that all assumptions about future events are fulfilled. The accumulated postretirement benefit obligation generally reflects a ratable allocation of expected future benefits to employee service already rendered in the attribution period. Before an employee's full eligibility date, the accumulated postretirement benefit obligation as of a particular date for an employee is the portion of the expected postretirement benefit obligation attributed to that employee's service rendered to that date; on and after the full eligibility date, the accumulated and expected postretirement benefit obligations for an employee are the same.") for those employees, assuming that those employees ([active plan participants](https://asc.understandingaccounting.org/glossary/a/#active-plan-participant "Any active employee who has rendered service during the credited service period and is expected to receive benefits, including benefits to or for any beneficiaries and covered dependents, under the postretirement benefit plan. See Plan Participant.")) not yet fully eligible for [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.") would terminate at their [full eligibility date](https://asc.understandingaccounting.org/glossary/f/#full-eligibility-date "The date at which an employee has rendered all of the service necessary to have earned the right to receive all of the benefits expected to be received by that employee (including any beneficiaries and dependents expected to receive benefits). Determination of the full eligibility date is affected by plan terms that provide incremental benefits expected to be received by or on behalf of an employee for additional years of service, unless those incremental benefits are trivial. Determination of the full eligibility date is not affected by plan terms that define when benefit payments commence or by an employee's current marital or dependency status.") and that [fully eligible plan participants](https://asc.understandingaccounting.org/glossary/f/#fully-eligible-plan-participants "Collectively, that group of former employees (including retirees) and active employees who have rendered service to or beyond their full eligibility date and who are expected to receive benefits under the plan, including benefits to their beneficiaries and covered dependents.") would retire immediately, without considering any special termination benefits 2. b The accumulated postretirement benefit obligation as measured in (a) adjusted to reflect the special termination benefits. See Example 4 (paragraphs [715-60-55-135 through 55-139](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-135) ) and Example 7 (paragraphs [715-60-55-161 through 55-175](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-161) ). Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:009eccbfb1866c6fce494e19f790cafbed01e7d78d7f2345b03fdf45e30903f3 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 715-60-35: 35 Subsequent Measurement [Read section](https://asc.understandingaccounting.org/asc/715/60/#35-subsequent-measurement) SEC content: no #### Use of Reasonable Approximations ##### [715-60-35-1](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-1) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:3f12f577ed4b0e23a575d53c543048b7dfc483d88b2a4ddc7c2a545b4f2c6dc1 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subtopic is intended to specify accounting objectives and results rather than computational means of obtaining those results. If estimates, averages, or computational shortcuts can reduce the cost of applying this Subtopic, their use is appropriate, provided the results are reasonably expected not to be materially different from the results of a detailed application. #### Benefit Obligations ##### [715-60-35-1A](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-1A) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:cbfa9ab5e5907988e78e5aa337b2b3af798320b114b64b9ec917206c624e5e01 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subtopic uses two terms to describe certain measures of the obligation to provide [postretirement benefits](https://asc.understandingaccounting.org/glossary/p/#postretirement-benefits "All forms of benefits, other than retirement income, provided by an employer to retirees. Those benefits may be defined in terms of specified benefits, such as health care, tuition assistance, or legal services, that are provided to retirees as the need for those benefits arises, such as certain health care benefits, or they may be defined in terms of monetary amounts that become payable on the occurrence of a specified event, such as life insurance benefits."): [expected postretirement benefit obligation](https://asc.understandingaccounting.org/glossary/e/#expected-postretirement-benefit-obligation "The actuarial present value as of a particular date of the postretirement benefits expected to be paid by the employer's plan to or for each employee, the employee's beneficiaries, and any covered dependents pursuant to the terms of the plan.") and [accumulated postretirement benefit obligation](https://asc.understandingaccounting.org/glossary/a/#accumulated-postretirement-benefit-obligation "The actuarial present value as of a particular date of all future benefits attributed to an employee's service rendered to that date assuming the plan continues in effect and that all assumptions about future events are fulfilled. The accumulated postretirement benefit obligation generally reflects a ratable allocation of expected future benefits to employee service already rendered in the attribution period. Before an employee's full eligibility date, the accumulated postretirement benefit obligation as of a particular date for an employee is the portion of the expected postretirement benefit obligation attributed to that employee's service rendered to that date; on and after the full eligibility date, the accumulated and expected postretirement benefit obligations for an employee are the same."). ##### [715-60-35-2](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-2) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:67e0452368b7227a72644a9e8762872fe8adba92b58ae5a31f2b4db8fb0e8914 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Measurement of the expected postretirement benefit obligation is based on the expected amount and timing of future [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."), taking into consideration the expected future cost of providing the benefits and the extent to which those costs are shared by the employer, the employee (including consideration of contributions required during the employee's active service period and following retirement, deductibles, coinsurance provisions, and so forth), or others (such as through governmental programs). ##### [715-60-35-3](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-3) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:d340771849030cb31b51a76033ccac9bfaac3f54ad3c6858e95e1ba448bcb568 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The accumulated postretirement benefit obligation is 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 all future benefits attributed to an employee's service rendered to a particular date pursuant to paragraphs [715-60-35-16 through 35-20](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-16) , [715-60-35-62](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-62), and [715-60-35-66](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-66), assuming the [plan](https://asc.understandingaccounting.org/glossary/p/#plan "An arrangement that is mutually understood by an employer and its employees, whereby an employer undertakes to provide its employees with benefits after they retire in exchange for their services over a specified period of time, upon attaining a specified age while in service, or a combination of both. A plan may be written or it may be implied by a well-defined, although perhaps unwritten, practice of paying postretirement benefits or from oral representations made to current or former employees. See Substantive Plan.") continues in effect and all [assumptions](https://asc.understandingaccounting.org/glossary/a/#assumptions "Estimates of the occurrence of future events affecting pension costs and other postretirement benefit costs (as applicable), such as turnover, retirement age, mortality, withdrawal, disablement, dependency status, per capita claims costs by age, health care cost trend rates, levels of Medicare and other health care providers' reimbursements, changes in compensation and national pension benefits, and discount rates to reflect the time value of money.") about future events are fulfilled. ##### [715-60-35-4](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-4) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:e1e5cf22d6f18acbd327b338ac707f7ed9fb8d80907ee640a0760faeace68688 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The accumulated postretirement benefit obligation generally reflects a ratable allocation of expected future benefits to employee service already rendered in the [attribution period](https://asc.understandingaccounting.org/glossary/a/#attribution-period "The period of an employee's service to which the expected postretirement benefit obligation for that employee is assigned. The beginning of the attribution period is the employee's date of hire unless the plan's benefit formula grants credit only for service from a later date, in which case the beginning of the attribution period is generally the beginning of that credited service period. The end of the attribution period is the full eligibility date. Within the attribution period, an equal amount of the expected postretirement benefit obligation is attributed to each year of service unless the plan's benefit formula attributes a disproportionate share of the expected postretirement benefit obligation to employees' early years of service. In that case, benefits are attributed in accordance with the plan's benefit formula. See Credited Service Period."). ##### [715-60-35-5](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-5) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:8bcf27b8f64a8491ad75eb248a3080d944f7d2d6a7f7a2c31adfb2f137c23a20 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An employer that sponsors one or more single-employer defined benefit other postretirement plans other than pensions shall measure the funded status for each plan as the difference between the fair value of [plan assets](https://asc.understandingaccounting.org/glossary/p/#plan-assets "Assets—usually stocks, bonds, and other investments (except certain insurance contracts as noted in paragraph 715-60-35-109)—that have been segregated and restricted (usually in a trust) to be used for a health and welfare plan (which can include active, terminated, and retired employees or their dependents or beneficiaries). The amount of plan assets includes amounts contributed by the employer, and by plan participants for a contributory plan, and amounts earned from investing the contributions, less benefits, income taxes, and other expenses incurred. 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. Securities of the employer held by the plan are includable in plan assets provided they are transferable. 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 the employer may intend that those assets be used to provide health and welfare benefits, which may include postretirement benefits. Those assets shall be accounted for in the same manner as other employer assets of a similar nature and with similar restrictions. If a plan has liabilities other than for benefits, those nonbenefit obligations are considered as reductions of plan assets. Amounts accrued by the employer but not yet paid to the plan are not plan assets. If a trust arrangement explicitly provides that segregated assets are available to satisfy claims of creditors in bankruptcy, such a provision would effectively permit those assets to be used for other purposes at the discretion of the employer. It is not necessary to determine that a trust is bankruptcy-proof for the assets of the trust to qualify as plan assets. However, assets held in a trust that explicitly provides that such assets are available to the general creditors of the employer in the event of the employer's bankruptcy would not qualify as plan assets.") and the accumulated postretirement benefit obligation as it is defined in this Subtopic. ##### [715-60-35-6](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-6) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:cff13629733cdff1d1f9faf07f96c2b00280b558921bd5881889581d7d100c63 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See paragraphs [715-60-55-35 through 55-39](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-35) for an illustration of the terms _expected postretirement benefit obligation_ and _accumulated postretirement benefit obligation_. #### Components of Net Periodic Postretirement Benefit Cost ##### [715-60-35-7](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-7) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:902d907fc5b7d842d6ea3a37642b8627170c9ae1c72cf8260fc7b3226c2de88b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. As with other forms of deferred compensation, the cost of providing postretirement benefits shall be attributed to the periods of employee service rendered in exchange for those future benefits pursuant to the terms of the plan. That cost notionally represents the change in the [unfunded accumulated postretirement benefit obligation](https://asc.understandingaccounting.org/glossary/u/#unfunded-accumulated-postretirement-benefit-obligation "The accumulated postretirement benefit obligation in excess of the fair value of plan assets.") for the period, ignoring employer contributions to the plan, plan settlements, and payments made by the employer directly to [retirees](https://asc.understandingaccounting.org/glossary/r/#retirees "Collectively, that group of plan participants that includes retired employees, their beneficiaries, and covered dependents."). However, changes in that unfunded obligation that arise from experience gains and losses and the effects of changes in assumptions may be recognized as a component of [net periodic postretirement benefit cost](https://asc.understandingaccounting.org/glossary/n/#net-periodic-postretirement-benefit-cost "The amount recognized in an employer's financial statements as the cost of a postretirement benefit plan for a period. Components of net periodic postretirement benefit cost include service cost, interest cost, actual return on plan assets, gain or loss, amortization of prior service cost or credit, and amortization of the transition obligation or asset.") on a delayed basis. In addition, the effects of a plan initiation or amendment generally are recognized on a delayed basis. ##### [715-60-35-8](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-8) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:f66febd17aa106e8365f747580d17f9cb18bb4671be1595edd36df28e10faff1 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Thus, any change in the accumulated postretirement benefit obligation or the plan assets (other than contributions and benefit payments) either is initially recognized in other comprehensive income or is included in net periodic postretirement benefit cost. Contributions to a funded plan by the employer decrease the recognized postretirement benefit liability or increase the recognized postretirement benefit asset. ##### [715-60-35-9](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-9) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:e9ffd976eed0ee7fff96161246848fbc31620fefbfa5abf3a8557d0794770cbc Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Net periodic postretirement benefit cost comprises several components that reflect different aspects of the employer's financial arrangements. All of the following components shall be included in the net periodic postretirement benefit cost recognized by an employer sponsoring a [defined benefit postretirement 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.)"): 1. a [Service cost](https://asc.understandingaccounting.org/glossary/s/#service-cost-component-of-net-periodic-postretirement-benefit-cost "The actuarial present value of benefits attributed to services rendered by employees during the period (the portion of the expected postretirement benefit obligation attributed to service in the period). The service cost component is the same for an unfunded plan, a plan with minimal funding, and a well-funded plan.") (see the following paragraph). 2. b [Interest cost](https://asc.understandingaccounting.org/glossary/i/#interest-cost-component-of-net-periodic-postretirement-benefit-cost "The increase in the accumulated postretirement benefit obligation to recognize the effects of the passage of time.") (see paragraph [715-60-35-11](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-11)). The interest cost component of postretirement benefit cost shall not be considered interest for purposes of applying Subtopic 835-20. 3. c [Actual return on plan assets](https://asc.understandingaccounting.org/glossary/a/#actual-return-on-plan-assets-component-of-net-periodic-postretirement-benefit-cost "The change in the fair value of the plan's assets for a period including the decrease due to expenses incurred during the period (such as income tax expense incurred by the fund, if applicable), adjusted for contributions and benefit payments during the period. For a funded plan, the actual return on plan assets shall be determined based on the fair value of plan assets (see paragraph 715-60-35-107) at the beginning and end of the period, adjusted for contributions and benefit payments. If the fund holding the plan assets is a taxable entity, the actual return on plan assets shall reflect the tax expense or benefit for the period determined in accordance with generally accepted accounting principles (GAAP). Otherwise, no provision for taxes shall be included in the actual return on plan assets."), if any (see paragraphs [715-60-35-23 through 35-36](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-23) ) 4. d [Amortization](https://asc.understandingaccounting.org/glossary/a/#amortization "The process of reducing a recognized liability systematically by recognizing gains or by reducing a recognized asset systematically by recognizing losses. In accounting for pension benefits or other postretirement benefits, amortization also means the systematic recognition in net periodic pension cost or other postretirement benefit cost over several periods of amounts previously recognized in other comprehensive income, that is, gains or losses, prior service cost or credits, and any transition obligation or asset.") of any [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.") or credit included in accumulated other comprehensive income to the extent required by paragraphs [715-60-35-13 through 35-20](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-13) . 5. e [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.") (including the effects of changes in assumptions) to the extent recognized, which includes amortization of the net gain or loss included in accumulated other comprehensive income (see paragraphs [715-60-35-23 through 35-36](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-23) ). 6. f Amortization of any obligation or asset existing at the date of initial application of this Subtopic, hereinafter referred to as the [transition obligation](https://asc.understandingaccounting.org/glossary/t/#transition-obligation "The amount, as of the date Subtopic 715-60 was initially applied, of the accumulated postretirement benefit obligation in excess of the fair value of plan assets plus any recognized accrued postretirement benefit cost or less any recognized prepaid postretirement benefit cost.") or [transition asset](https://asc.understandingaccounting.org/glossary/t/#transition-asset "The amount, as of the date Subtopic 715-60 was initially applied, of the fair value of plan assets plus any recognized accrued postretirement benefit cost or less any recognized prepaid postretirement benefit cost in excess of the accumulated postretirement benefit obligation.") remaining in accumulated other comprehensive income (see paragraphs [715-60-35-38 through 35-40](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-38) ). ##### [715-60-35-10](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-10) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:0f50e69dc80aa42791a9d1d9ef19e16a4af06821647b84bf91df1af01f0e7280 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The measurement of the service cost component requires identification of the [substantive plan](https://asc.understandingaccounting.org/glossary/s/#substantive-plan "The terms of the postretirement benefit plan as understood by an employer that provides postretirement benefits and the employees who render services in exchange for those benefits. The substantive plan is the basis for the accounting for that exchange transaction. In some situations an employer's cost-sharing policy, as evidenced by past practice or by communication of intended changes to a plan's cost-sharing provisions, or a past practice of regular increases in certain monetary benefits, may indicate that the substantive plan differs from the extant written plan.") and the use of assumptions and an [attribution](https://asc.understandingaccounting.org/glossary/a/#attribution "The process of assigning pension or other postretirement benefits or costs to periods of employee service.") method, which are discussed in paragraphs [715-60-35-48 through 35-105](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-48) . ##### [715-60-35-10A](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-10A) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:12105e915af591694938e21aa0a3d649922a67a3122694a000981bfe6ea601bb Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The service cost component shall be the only component of net periodic postretirement benefit cost eligible to be capitalized as part of the cost of inventory or other assets. ##### [715-60-35-11](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-11) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:9e246a8a888f09d86e36a7f0bece7f7ba4218230d926ee83958de4090a80f960 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Interest cost is the interest on the accumulated postretirement benefit obligation, which is a discounted amount. Measuring the accumulated postretirement benefit obligation as a present value requires accrual of an interest cost at rates equal to the assumed [discount rates](https://asc.understandingaccounting.org/glossary/d/#discount-rate "A rate or rates used to reflect the time value of money. Discount rates are used in determining the present value as of the measurement date of future cash flows currently expected to be required to satisfy the pension obligation or other postretirement benefit obligation. See Actuarial Present Value."). ##### [715-60-35-12](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-12) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:6c9e26e3648d4225ce582e7520c93d34050c33cc2511bb554b5e37c1f52060bd Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In measuring an employer's expected and accumulated postretirement benefit obligations, changes in in-kind benefits covered by a postretirement health care plan or by other postretirement benefit plans shall not be anticipated. However, if the employer amends the benefits to be provided by the plan, the effect of the amendment is recognized immediately in measuring the employer's expected and accumulated postretirement benefit obligations, even if the effective date of the change in benefits is delayed until a specified date in the future. ##### [715-60-35-13](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-13) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:602c03422d8040b400622aff9dcc9a9ff794b5294768412a5957dbe0b7dd21dd Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Plan amendments](https://asc.understandingaccounting.org/glossary/p/#plan-amendment "A change in the existing terms of a plan or the initiation of a new plan. A plan amendment may increase benefits (a positive plan amendment), or reduce or eliminate benefits (a negative plan amendment), including those benefits attributed to years of service already rendered.") (including initiation of a plan) may include provisions that attribute the increase or reduction in benefits to employee service rendered in prior periods or only to employee service to be rendered in future periods. ##### [715-60-35-14](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-14) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:edf01bfdbb999a36e27232963a9a2058ef1b8ed55fade544921683979bf8a902 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For purposes of measuring the accumulated postretirement benefit obligation, the effect of a [plan amendment](https://asc.understandingaccounting.org/glossary/p/#plan-amendment "A change in the existing terms of a plan or the initiation of a new plan. A plan amendment may increase benefits (a positive plan amendment), or reduce or eliminate benefits (a negative plan amendment), including those benefits attributed to years of service already rendered.") on a plan participant's expected postretirement benefit obligation shall be attributed to each year of service in that plan participant's attribution period, including years of service already rendered by that [plan participant](https://asc.understandingaccounting.org/glossary/p/#plan-participant "Any employee or former employee who has rendered service in the credited service period and is expected to receive employer-provided benefits under the postretirement benefit plan, including benefits to or for any beneficiaries and covered dependents. See Active Plan Participant."), in accordance with the attribution of the expected postretirement benefit obligation to years of service as discussed in paragraphs [715-60-35-62](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-62) and [715-60-35-66](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-66). If a plan is initiated that grants benefits solely in exchange for employee service after the date of the plan initiation or a future date, no portion of the expected postretirement benefit obligation is attributed to prior service periods because, in that case, the [credited service period](https://asc.understandingaccounting.org/glossary/c/#credited-service-period "Employee service period for which benefits are earned pursuant to the terms of the plan. The beginning of the credited service period may be the date of hire or a later date. For example, a plan may provide benefits only for service rendered after a specified age. Service beyond the end of the credited service period does not earn any additional benefits under the plan. See Attribution Period.") for the current employees who are expected to receive benefits under the plan begins at the date of the plan initiation or the future date. ##### [715-60-35-15](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-15) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:641122a39e785f89553e5a9548b962636cd806e0a87572f2073cdd22d599a02a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Plan amendments that improve benefits are granted with the expectation that the employer will realize economic benefits in future periods. Consequently, except as discussed in paragraph [715-60-35-19](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-19) this Subtopic does not permit the cost of benefit improvements (that is, prior service cost) to be included in net periodic postretirement benefit cost entirely in the year of the amendment. Rather, paragraphs [715-60-35-16 through 35-17](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-16) requires that prior service cost arising from a plan initiation or plan amendment shall be recognized initially in other comprehensive income with subsequent amortization in net periodic postretirement benefit cost, at a minimum, by assigning an equal amount of the prior service cost to each remaining year of service to the [full eligibility date](https://asc.understandingaccounting.org/glossary/f/#full-eligibility-date "The date at which an employee has rendered all of the service necessary to have earned the right to receive all of the benefits expected to be received by that employee (including any beneficiaries and dependents expected to receive benefits). Determination of the full eligibility date is affected by plan terms that provide incremental benefits expected to be received by or on behalf of an employee for additional years of service, unless those incremental benefits are trivial. Determination of the full eligibility date is not affected by plan terms that define when benefit payments commence or by an employee's current marital or dependency status.") of each plan participant active at the date of the plan initiation or amendment. (See paragraphs [715-60-35-20 through 35-22](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-20) for plan amendments that reduce benefits.) ##### [715-60-35-16](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-16) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:5ccb86ee9f0bded638806517602a78fccf55788b1b83454b2de9ec332b5e96d6 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A plan amendment that retroactively increases benefits (including benefits that are granted to fully eligible plan participants) increases the accumulated postretirement benefit obligation. The cost of the benefit improvement shall be recognized as a charge to other comprehensive income at the date of the amendment. ##### [715-60-35-17](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-17) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:5496e34521924b80fc263264dfeef0217e98bb29313d9dda563f14ebeaaad04b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Except as stated in this paragraph and in paragraphs [715-60-35-18 through 35-19](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-18) , prior service cost shall be amortized as a component of net periodic postretirement benefit cost by assigning an equal amount to each remaining year of service to the full eligibility date of each plan participant active at the date of the amendment who was not yet fully eligible for benefits at that date. To determine total remaining service years before full eligibility, consideration is given to the remaining number of years of service to the full eligibility date of each plan participant or group of plan participants active at the date of the plan amendment who is not yet fully eligible for benefits. In determining the amortization period, future years of service of active employees who are not plan participants are excluded. Thus, the portion of prior service cost to be recognized in net periodic postretirement benefit cost in each of those future years is weighted based on the number of those plan participants expected to render service in each of those future years. If all or almost all of a plan's participants are fully eligible for benefits, the prior service cost shall be amortized based on the remaining life expectancy of those plan participants rather than on the remaining years of service to the full eligibility dates of the [active plan participants](https://asc.understandingaccounting.org/glossary/a/#active-plan-participant "Any active employee who has rendered service during the credited service period and is expected to receive benefits, including benefits to or for any beneficiaries and covered dependents, under the postretirement benefit plan. See Plan Participant."). Other comprehensive income is adjusted as a result of amortizing prior service cost. ##### [715-60-35-18](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-18) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:66f1ec16d18219f71010795b9a0e9a8b19f8c9431501bec7c6b51587185935bf Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. To reduce the complexity and detail of the computations required, consistent use of an alternative approach that more rapidly amortizes the prior service cost recognized in accumulated other comprehensive income is permitted. For example, a straight-line amortization of the cost over the average remaining years of service to [full eligibility for benefits](https://asc.understandingaccounting.org/glossary/f/#full-eligibility-for-benefits "The status of an employee having reached the employee's full eligibility date. Full eligibility for benefits is achieved by meeting specified age, service, or age and service requirements of the postretirement benefit plan. See Full Eligibility Date.") of the active plan participants is acceptable. ##### [715-60-35-19](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-19) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:2c9d2cdc2ef3c0cff5f2a6c727dae2090402aab05be69b92407e771586758507 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In some situations, a history of regular plan amendments and other evidence may indicate that the period during which the employer expects to realize economic benefits from an amendment that grants increased benefits is shorter than the remaining years of service to full eligibility for benefits of the active plan participants. Identification of those situations requires an assessment of the individual circumstances of the particular plan. In those circumstances, the amortization of prior service cost shall be accelerated to reflect the more rapid expiration of the employer's economic benefits and to recognize the cost in the periods benefited. ##### [715-60-35-20](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-20) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:b27068d17a6ccb66e102d8dc294a44731666fa29bde973eaca521c4bfb06ccaf Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A plan amendment that retroactively reduces, rather than increases, benefits decreases the accumulated postretirement benefit obligation. The reduction in benefits shall be recognized as a corresponding credit (prior service credit) to other comprehensive income that shall be used first to reduce any remaining prior service cost included in accumulated other comprehensive income, then to reduce any transition obligation remaining in accumulated other comprehensive income. The excess, if any, shall be amortized as a component of net periodic postretirement benefit cost on the same basis as specified in paragraphs [715-60-35-16 through 35-17](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-16) for prior service cost. Immediate recognition of the excess is not permitted. However, as with a plan amendment that increases benefits, the effect of a negative plan amendment (an amendment that decreases benefits) is reflected immediately in the measurement of the accumulated postretirement benefit obligation. ##### [715-60-35-21](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-21) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:e4cc98963b023e9533a193fcf7db9d928e9ba4634a82b58889082d1d761803e9 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The effects of a plan amendment, whether positive or negative, shall be considered at the date the amendment is adopted only if it is communicated to plan participants at that time or within a reasonable period of time thereafter; that is, within the time period that would ordinarily be required to prepare information about the amendment and disseminate it to employees and retirees. ##### [715-60-35-22](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-22) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:8ba0f1287c23d8bbf0d87008e605e24def956b8fd49be62c3a34a19ed5f6cc93 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See paragraphs [715-60-55-19 through 55-21](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-19) and [715-60-55-140 through 55-160](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-140) for implementation guidance on plan amendments. ##### [715-60-35-23](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-23) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:12a52bc131e127e179765e40578ed907fcac52059be7bd39e4f92cb8908d7409 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subtopic generally does not distinguish between gains and losses that result from experience different than assumed or from changes in assumptions. Gains and losses include amounts that have been realized, for example, by the sale of a security, as well as amounts that are unrealized. ##### [715-60-35-24](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-24) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:9dda905c94679a2fb46e30d0362b03ad3dc9727fa0afe6544e0ee8f62ed11720 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Because gains and losses may reflect refinements in estimates as well as real changes in economic values and because some gains in one period may be offset by losses in another or vice versa, this Subtopic does not require recognition of gains and losses as components of net postretirement benefit cost in the period in which they arise, except as described in paragraphs [715-60-35-34 through 35-35](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-34) . ##### [715-60-35-25](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-25) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:02fb69260a75051fba48c75cf2b01cf25c53c03ce818807e5f6f18a6d41ac282 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Gains and losses that are not recognized immediately as a component of net periodic postretirement benefit cost shall be recognized as increases or decreases in other comprehensive income as they arise. (Gain and loss recognition in accounting for settlements and curtailments is addressed in paragraphs [715-60-35-149 through 35-171](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-149) .) ##### [715-60-35-26](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-26) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:26eff41e1dafaf3dce4f6da5b50d00f9bd889317debe72d2503697687b18955b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The [expected return on plan assets](https://asc.understandingaccounting.org/glossary/e/#expected-return-on-plan-assets "An amount calculated as a basis for determining the extent of delayed recognition of the effects of changes in the fair value of plan assets. The expected return on plan assets is determined based on the expected long-term rate of return on plan assets and the market-related value of plan assets.") shall be determined based on the [expected long-term rate of return on plan assets](https://asc.understandingaccounting.org/glossary/e/#expected-long-term-rate-of-return-on-plan-assets "An assumption about the rate of return on plan assets reflecting the average rate of earnings expected on existing plan assets and expected contributions to the plan during the period.") (see paragraphs [715-60-35-84 through 35-87](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-84) ) and the [market-related value of plan assets](https://asc.understandingaccounting.org/glossary/m/#market-related-value-of-plan-assets "A balance used to calculate the expected return on plan assets. The market-related value of plan assets is either fair value or a calculated value that recognizes changes in fair value in a systematic and rational manner over not more than five years. Different ways of calculating market-related value may be used for different classes of assets (for example, an employer might use fair value for bonds and a five-year-moving-average value for equities), but the manner of determining market-related value is required to be applied consistently from year to year for each asset class. For a method to meet the criteria of being systematic and rational, it must reflect only the changes in the fair value of plan assets between various dates."). If the fund holding plan assets is a taxable entity, the expected long-term rate of return on plan assets is net of estimated income taxes. ##### [715-60-35-27](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-27) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:133e6a9b9ed2f15b9592f4e197902fa2a35b16e3967597609212229627ff79f5 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Plan asset gains and losses are differences between the actual return on plan assets during a period and the expected return on plan assets for that period. Plan asset gains and losses include both of the following: 1. a Changes reflected in the market-related value of plan assets 2. b Changes not yet reflected in the market-related value of plan assets (that is, the difference between the fair value and the market-related value of plan assets). ##### [715-60-35-28](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-28) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:1ddcad629fa3d8948cf47e8f355829abd4eafb1e2b1101e0b48be5d4c5d1ea7c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Plan asset gains and losses not yet reflected in market-related value are not required to be amortized under the following paragraph and paragraphs [715-60-35-31 through 35-32](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-31) . ##### [715-60-35-29](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-29) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:9d171b068ac5d31c1d0638ef81386afa5b6f68e5a4d37cb123ac63f768fccc7a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. As a minimum, amortization of a net gain or loss included in accumulated other comprehensive income (excluding plan asset gains and losses not yet reflected in market-related value) shall be included as a component of net periodic postretirement benefit cost for a year if, as of the beginning of the year, that 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.") exceeds 10 percent of the greater of the accumulated postretirement benefit obligation or the market-related value of plan assets. If amortization is required, the minimum amortization shall be that excess divided by the average remaining service period of active plan participants. If all or almost all of a plan's participants are inactive, the average remaining life expectancy of the inactive participants shall be used instead of the average remaining service period. ##### [715-60-35-30](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-30) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:a5c38b151ed734a0a8a0cafd56fdd60ec515fbf214fff4d43291a920667cf927 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The amortization shall reduce the beginning-of-the-year balance included in accumulated other comprehensive income. Amortization of a net gain included in accumulated other comprehensive income results in a decrease in net periodic postretirement benefit cost; amortization of a net loss included in accumulated other comprehensive income results in an increase in net periodic postretirement benefit cost. ##### [715-60-35-31](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-31) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:5d3736441cceb73e6054177eb12443d2035432d0732bfeb01839d9d60e4d13cb Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Any systematic method of amortizing gains and losses included in accumulated other comprehensive income may be used in place of the minimum amortization specified in paragraph [715-60-35-29](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-29) provided that all of the following conditions are met: 1. a The minimum amortization is recognized in any period in which it is greater (reduces the net gain or loss balance by more) than the amount that would be recognized under the method used. 2. b The method is applied consistently. 3. c The method is applied similarly to both gains and losses. ##### [715-60-35-32](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-32) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:d7be4c327433f76d62d1e70a9c96f5b10c8f0ec4b8773efad13907a9cf8996ff Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If an entity uses a method of consistently recognizing gains and losses immediately, any gain that does not offset a loss previously recognized in income pursuant to this paragraph shall first offset any transition obligation remaining in accumulated other comprehensive income; any loss that does not offset a gain previously recognized in income pursuant to this paragraph shall first offset any transition asset remaining in accumulated other comprehensive income. ##### [715-60-35-33](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-33) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:b0a79e8a33d88cc1d2e80d191a808f245ff7cb55d8b5d73f5212f56d83e67847 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In applying the provisions of paragraphs [715-60-35-29 through 35-32](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-29) for the recognition of gains and losses as a component of net periodic postretirement benefit cost, it is not appropriate for an employer to elect annually a new method of amortization of gains and losses included in accumulated other comprehensive income. Rather, an employer shall select an amortization method and apply it consistently from period to period as long as the resulting amortization equals or exceeds the minimum amortization specified by paragraph [715-60-35-29](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-29). Any change in the method selected would be subject to Topic 250. ##### [715-60-35-34](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-34) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:8ddc2ef5241030100e0e7389fda670cae58e1c48a4b225d581043756f258b125 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In some situations, an employer may forgive a retrospective adjustment of the current or past years' [cost-sharing provisions of the plan](https://asc.understandingaccounting.org/glossary/c/#cost-sharing-provisions-of-the-plan "The provisions of the postretirement benefit plan that describe how the costs of the covered benefits are to be shared between the employer and the plan participants. Cost-sharing provisions describe retired and active plan participants' contributions toward their postretirement health care benefits, deductibles, coinsurance, out-of-pocket limitations on participant costs, caps on employer costs, and so forth.") as they relate to benefit costs already incurred by retirees or may otherwise deviate from the provisions of the substantive plan to increase or decrease the employer's share of the benefit costs incurred in the current or past periods. The effect of a decision to temporarily deviate from the substantive plan shall be immediately recognized as a loss or gain. ##### [715-60-35-35](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-35) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:040d9c453e74e802b51f130eb81d05dc74e833f3ade53929412e13fa2ae61480 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For example, the terms of a substantive postretirement health care plan may provide that any shortfall resulting from current year benefit payments in excess of the employer's stated share of [incurred claims cost](https://asc.understandingaccounting.org/glossary/i/#incurred-claims-cost-by-age "The cost of providing the postretirement health care benefits covered by the plan to a plan participant, after adjusting for reimbursements from Medicare and other providers of health care benefits and for deductibles, coinsurance provisions, and other specific claims costs borne by the retiree. See Net Incurred Claims Cost (By Age).") and retiree contributions for that year is to be recovered from increased retiree contributions in the subsequent year. The employer may subsequently determine that increasing retiree contributions for the shortfall in the prior year would be onerous and decides to bear the cost of the shortfall for that year. The employer's decision to bear the shortfall represents a change in intent and the resulting loss shall be recognized immediately. Future decisions by the employer to continue to bear the shortfall suggest an amendment of the substantive plan that shall be accounted for as described in paragraphs [715-60-35-12 through 35-22](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-12) . ##### [715-60-35-36](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-36) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:174aee4155691e638db40afc64490fc14a51987ce4426ff140ce853d158f73de Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The [gain or loss component of net periodic postretirement benefit cost](https://asc.understandingaccounting.org/glossary/g/#gain-or-loss-component-of-net-periodic-postretirement-benefit-cost "The sum of all of the following: The difference between the actual return on plan assets and the expected return on plan assets Any gain or loss immediately recognized or the amortization of the net gain or loss recognized in accumulated other comprehensive income Any amount immediately recognized as a gain or loss pursuant to a decision to temporarily deviate from the substantive plan. The gain or loss component is generally the net effect of delayed recognition in determining net periodic postretirement benefit cost of gains and losses (the net change in the net gain or loss recognized in accumulated other comprehensive income) except that it does not include changes in the accumulated postretirement benefit obligation occurring during the period and deferred for later recognition in net periodic postretirement benefit cost.") shall consist of all of the following: 1. a The difference between the actual return on plan assets and the expected return on plan assets 2. b Any gain or loss immediately recognized or the amortization of the net gain or loss included in accumulated other comprehensive income 3. c Any amount immediately recognized as a gain or loss pursuant to paragraphs [715-60-35-34 through 35-35](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-34) . ##### [715-60-35-37](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-37) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:89b9499555785f1bc65597df89ac2012838c404c4f6bcc36fc73d8e39375d059 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See paragraphs [715-60-55-22 through 55-25](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-22) for implementation guidance on gains and losses. ##### [715-60-35-38](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-38) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:c189bfcf981461c99087da8c0a6f6099fe8aa0ada1a3b41baa5c1d4164320441 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Amortization of the transition obligation or asset shall be adjusted prospectively to recognize the effects of all of the following: 1. a A negative plan amendment pursuant to paragraph [715-60-35-20](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-20) 2. b A constraint on immediate recognition of a net gain or loss pursuant to paragraphs [715-60-35-31 through 35-32](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-31) 3. c [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.") accounting pursuant to paragraphs [715-60-35-150 through 35-155](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-150) 4. d Plan curtailment accounting pursuant to paragraphs [715-60-35-161 through 35-171](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-161) 5. e A constraint on delayed amortization of the transition obligation pursuant to the following paragraph. ##### [715-60-35-39](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-39) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:fca528f8133ba770291fa6ca6d57f30c4cd4597e757a28fd87092176661a2701 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The amortization of the transition obligation shall be accelerated if the cumulative benefit payments after the date the employer first applied the provisions of this Subtopic to all plan participants exceed the cumulative postretirement benefit cost accrued after the transition date. In that situation, an additional amount of the transition obligation remaining in accumulated other comprehensive income shall be recognized as a component of net periodic postretirement benefit cost equal to the excess cumulative benefit payments. For purposes of applying this provision, cumulative benefit payments shall be reduced by any plan assets or any recognized accrued postretirement benefit obligation at the date the employer first applied the provisions of this Subtopic. Payments made pursuant to a settlement, as discussed in paragraphs [715-60-35-150 through 35-159](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-150) , shall be included in the determination of cumulative benefit payments made after the transition date. If a settlement occurs in the middle of the year, the additional transition obligation to be recognized in income, if any, pursuant to the constraint in this paragraph is determined based on projected amounts for the full year. ##### [715-60-35-40](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-40) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:d659436d41ddf0f8fdf093afd65a77179e7b7580dff5afbb1dfaefc14ae431a0 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If at the measurement date for the beginning of an employer's fiscal year it is expected that additional recognition in net periodic postretirement benefit cost of any transition obligation remaining in accumulated other comprehensive income will be required pursuant to the preceding paragraph, amortization of the transition obligation for interim reporting purposes (see Topic 270) shall be based on the amount expected to be amortized for the year, except for the effects of applying the preceding paragraph for any settlement required to be accounted for pursuant to paragraphs [715-60-35-150 through 35-159](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-150) . Those effects shall be recognized in net periodic postretirement benefit cost when the related settlement is recognized in income. The effects of changes during the year in the initial assessment of whether additional recognition in net periodic postretirement benefit cost of the transition obligation remaining in accumulated other comprehensive income for the year shall be recognized in net periodic postretirement benefit cost over the remainder of the year. The amount of the transition obligation remaining in accumulated other comprehensive income to be recognized in net periodic postretirement benefit cost for a year shall be finally determined at the measurement date for the end of the year based on the constraints on delayed recognition in net periodic postretirement benefit cost discussed in the preceding paragraph; any difference between the amortization of the transition obligation recognized in net periodic postretirement benefit cost during interim periods and the amount required to be recognized in net periodic postretirement benefit cost for the year shall be recognized in net periodic postretirement benefit cost immediately. #### Measurement of Costs and Obligations ##### [715-60-35-41](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-41) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:2df43484d364354850243ab4b195d940b935528e00e9b5d352fc5192bd2e7d58 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Any method of accounting that recognizes the cost of postretirement benefits over employee service periods (before the payment of benefits to retirees) must deal with two factors that stem from the nature of the arrangement. First, estimates or assumptions shall be made about the future events that will determine the amount and timing of the benefit payments. Second, an attribution approach that assigns benefits and the cost of those benefits to individual years of service shall be selected. ##### [715-60-35-42](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-42) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:7d6af7f7e02ac8fc6ca2947d8edadab93a559883de2a23eac82239bbb220e6f0 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Unlike Subtopic 715-30, this Subtopic implicitly considers salary progression in the measurement of the accumulated postretirement benefit obligation of a [pay-related plan](https://asc.understandingaccounting.org/glossary/p/#pay-related-plan "A plan that has a benefit formula that bases benefits or benefit coverage on compensation, such as a final-pay or career-average-pay plan."). Because measurement of the expected postretirement benefit obligation includes an assumed salary progression for a pay-related plan, salary progression is, by definition, included in the accumulated benefit obligation for a pay-related [postretirement benefit plan](https://asc.understandingaccounting.org/glossary/p/#postretirement-benefit-plan "See Plan."). Thus, the accumulated postretirement benefit obligation disclosed pursuant to Subtopic 715-20 is defined in terms notionally more comparable to the projected benefit obligation under Subtopic 715-30. ##### [715-60-35-43](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-43) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:5c2551e0dc8e8d6180289abe670dba3819746309bfee3248d68e12e7bb526d72 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For other postretirement plans that provide disability benefits, the determination of disability benefits to be accrued pursuant to this Subtopic is based on the terms of the postretirement benefit plan defining when a disabled employee is entitled to postretirement benefits. ##### [715-60-35-44](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-44) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:20473f46af636e51165d7002e7dcbb61e1c2f43b1b66d953017e612e01d7e4d5 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For example, an employer may promise to provide postretirement health care coverage to all employees who render 30 or more years of service. The employer may carry active employees who become disabled on active status so a disabled employee continues to accumulate credit toward postretirement benefits. Measurement of the expected postretirement benefit obligation shall include an assumption that some employees who are expected to receive benefits under the postretirement benefit plan will become disabled and cease working before the date at which they otherwise would have been eligible for [postretirement health care benefits](https://asc.understandingaccounting.org/glossary/p/#postretirement-health-care-benefits "A form of postretirement benefit provided by an employer to retirees for defined health care services or coverage of defined health care costs, such as hospital and medical coverage, dental benefits, and eye care."). The measurement of the postretirement benefits expected to be paid to disabled employees would encompass only those benefits expected to be paid during the period following what otherwise would have been their full eligibility date; in this case, the date at which the employee would have completed 30 years of service. That amount is attributed to an employee's service to the date the disability is assumed to occur. ##### [715-60-35-45](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-45) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:679feed6145ff9a907aa0b1d8fa2681fb3fe6056d9055e4bed42363c3dc832a8 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Only some employees become and remain disabled. Therefore, in measuring the expected postretirement benefit obligation and in determining the attribution period for plan participants expected to become disabled, the probability and timing of a disabling event is considered in determining whether employees are likely to become disabled and whether they will be entitled to receive postretirement benefits. ##### [715-60-35-46](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-46) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:a3d45d675b429be31928a3339cafb4077ff0c0de6566e234526d6caf923a10fd Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Note that measurement of an employer's postretirement benefit obligation is based on the current plan participants (a closed group approach) because it better recognizes the benefit obligation over the period in which employees render service in exchange for benefits. ##### [715-60-35-47](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-47) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:a01001ae19587ee7e3ff564e56a625a273f04d7f905fdaac3a06355784469a25 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph not used](https://asc.understandingaccounting.org/updates/page-1833002/). ##### [715-60-35-48](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-48) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:0ca7d5ad94e2696d747207fcd2d34818181f9f4b8ebe7177b4b44c1c82ae60ab Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An objective of this Subtopic is that the accounting reflect the terms of the exchange transaction that takes place between an employer that provides other postretirement benefits and the employees who render services in exchange for those benefits, as those terms are understood by both parties to the transaction. ##### [715-60-35-49](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-49) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:f8a3ff120b895c407b78fb05b17bddd100793bc07e73b09c545d63a24dbbbb74 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Generally, the extant written plan provides the best evidence of the terms of that exchange transaction. However, in some situations, an employer's cost-sharing policy, as evidenced by past practice or by communication of intended changes to a plan's cost-sharing provisions, or a past practice of regular increases in certain monetary benefits (see paragraphs [715-60-35-51 through 35-56](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-51) ), may indicate that the substantive plan—the plan as understood by the parties to the exchange transaction—differs from the extant written plan. The substantive plan shall be the basis for the accounting. ##### [715-60-35-50](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-50) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:97f5f95dfc43087fea4aa8d7565fc9e4cc4d59f9292eefbc2824876190b62186 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See paragraph [715-60-55-1](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-1) for implementation guidance on a collectively bargained defined benefit postretirement health care plan. ##### [715-60-35-51](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-51) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:f0ab6750599ff87bea3843b716ae8374aa3ae3206b9923b613b7b12c0d94fded Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Except as provided in paragraphs [715-60-35-52 through 35-55](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-52) , an employer's cost-sharing policy, as evidenced by the following past practice or communication, shall constitute the cost-sharing provisions of the substantive plan if either of the following conditions exist: 1. a The employer has a past practice of maintaining a consistent level of cost sharing between the employer and its retirees through changes in deductibles, coinsurance provisions, retiree contributions, or some combination of those changes or consistently increasing or reducing the employer's share of the cost of the covered benefits through changes in retired or active plan participants' contributions toward their retiree health care benefits, deductibles, coinsurance provisions, out-of-pocket limitations, and so forth, in accordance with the employer's established cost-sharing policy Such a past practice would be indicated when the nature of the change and duration of the past practice are sufficient to warrant a presumption that it is understood by the plan participants. 2. b The employer has the ability, and has communicated to affected plan participants its intent, to institute different cost-sharing provisions at a specified time or when certain conditions exist (for example, when health care cost increases exceed a certain level). Otherwise, the extant written plan shall be considered to be the substantive plan. ##### [715-60-35-52](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-52) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:e9448d201f719525bf1752ed7a346fcdeec130db59e68cb4c4df306a0c667575 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An employer's past practice of maintaining a consistent level of cost sharing with its retirees or consistently increasing or reducing its share of the cost of providing the covered benefits shall not constitute provisions of the substantive plan if accompanied by identifiable offsetting changes in other benefits or compensation or if the employer incurred significant costs, such as work stoppages, to effect that cost-sharing policy. ##### [715-60-35-53](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-53) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:c58d4299073c418d61e14604eb123f460d6a594137fa20e06f7d8cf1727092ad Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For example, a past practice of increasing retiree contributions annually based on a specified index or formula may appear to indicate that the substantive plan includes a determinable indexing of the retirees' annual contributions to the plan. However, if that past practice of increasing retiree contributions is accompanied by identifiable offsetting changes in other benefits or compensation, those offsetting changes would indicate that the substantive plan incorporates only the current cost-sharing provisions. Therefore, future increases or reductions of those cost-sharing provisions shall not be incorporated in measuring the expected postretirement benefit obligation. ##### [715-60-35-54](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-54) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:47b9fbdc13e6299950a7b49b48c5be10c6797363fa340d09f5485fa7baa1c57f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Similarly, an employer's communication of its intent to institute cost-sharing provisions that differ from the extant written plan or the past cost-sharing practice shall not constitute provisions of the substantive plan if either of the following conditions exists: 1. a The plan participants would be unwilling to accept the change without adverse consequences to the employer's operations. 2. b Other modifications of the plan, such as the level of benefit coverage, or providing offsetting changes in other benefits, such as pension benefits, would be required to gain plan participants' acceptance of the change to the cost-sharing arrangement. ##### [715-60-35-55](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-55) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:65bfd157b229bfb6dc2a55f20e7a0c66fe12ac0815db27b8b911739bed9490f5 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. By definition, an employer does not have the unilateral right to change a collectively bargained plan. Therefore, if the postretirement benefits are the subject of collective bargaining, the extant written plan shall be the substantive plan unless the employer can demonstrate its ability to maintain a consistent level of cost sharing or a consistent practice of increasing or reducing its share of the cost of the covered benefits in past negotiations without making offsetting changes in other benefits or compensation of the affected plan participants or by incurring other significant costs to maintain that cost-sharing arrangement. ##### [715-60-35-56](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-56) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:86317e9f3c869b64b87e743ef9dc931c7e01d1456da3e46933c3969b9d6dc37f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A past practice of regular increases in postretirement benefits defined in terms of monetary amounts may indicate that the employer has a present commitment to make future improvements to the plan and that the plan will provide monetary benefits attributable to prior service that are greater than the monetary benefits defined by the extant written plan. In those situations, the substantive commitment to increase those benefits shall be the basis for the accounting. Changes in the benefits, other than benefits defined in terms of monetary amounts, covered by a postretirement health care plan or by other postretirement benefit plans shall not be anticipated. ##### [715-60-35-57](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-57) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:3eb3884b53ebf9c1f3df362ae4e59e9fef7987946c7e3c7cca9666524316406e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Contributions expected to be received from active employees toward the cost of their postretirement benefits and from retired plan participants are treated similarly for purposes of measuring an employer's expected postretirement benefit obligation. That obligation is measured as the actuarial present value of the benefits expected to be provided under the plan, reduced by the actuarial present value of contributions expected to be received from the plan participants during their remaining active service and postretirement periods. In determining the amount of the contributions expected to be received from those participants toward the cost of their postretirement benefits, consideration is given to any related substantive plan provisions, such as an employer's past practice of consistently increasing or reducing the contribution rates as described in paragraphs [715-60-35-51 through 35-55](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-51) . An obligation to return contributions received from employees who do not attain eligibility for postretirement benefits and, if applicable, any interest accrued on those contributions shall be recognized as a component of an employer's postretirement benefit obligation. ##### [715-60-35-58](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-58) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:9c06ca3512208eecfa67c66b19746311ad2153df1b3a0350391c9ba3deaea033 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Automatic benefit changes specified by the plan that are expected to occur shall be included in measurements of the expected and accumulated postretirement benefit obligations and the service cost component of net periodic postretirement benefit cost. ##### [715-60-35-59](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-59) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:8f24153a3bd266cbf694dbe2db42588f72abde021914a53ee0cbd313048f01a5 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For purposes of this Subtopic, a plan that promises to provide retirees a benefit in kind, such as health care benefits, rather than a defined dollar amount of benefit, is considered to be a plan that specifies automatic benefit changes. (The assumed rate of change in the future cost of providing health care benefits, the assumed [health care cost trend rate](https://asc.understandingaccounting.org/glossary/h/#health-care-cost-trend-rate "An assumption about the annual rates of change in the cost of health care benefits currently provided by the postretirement benefit plan, due to factors other than changes in the composition of the plan population by age and dependency status, for each year from the measurement date until the end of the period in which benefits are expected to be paid. The health care cost trend rates implicitly consider estimates of health care inflation, changes in health care utilization or delivery patterns, technological advances, and changes in the health status of the plan participants. Differing types of services, such as hospital care and dental care, may have different trend rates."), is discussed in paragraphs [715-60-35-99 through 35-101](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-99) .) Because automatic benefit changes are not conditional on employees rendering additional years of service, the full eligibility date is not affected by those changes. A benefit in kind includes the direct rendering of services, the payment directly to others who provide the services, or the reimbursement of the retiree's payment for those services. ##### [715-60-35-60](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-60) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:25bd642bd17427e3523fc512a08816d14c231c38adebabff2f1bbf29ec2df734 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Also, plan amendments shall be included in the computation of the expected and accumulated postretirement benefit obligations once they have been contractually agreed to, even if some provisions take effect only in future periods. For example, if a plan amendment grants a different benefit level for employees retiring after a future date, that increased or reduced benefit level shall be included in current-period measurements for employees expected to retire after that date. ##### [715-60-35-61](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-61) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:7ad2d239e62ee37b71cd3181c679ca1037906e836b288f545c475d0e14018c98 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In the context of this Subtopic, attribution is the process of assigning the expected cost of benefits to periods of employee service. The general objective is to assign to each year of service the cost of benefits earned or assumed to have been earned in that year. ##### [715-60-35-62](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-62) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:a385f11f0b1d410160da0741be4e10dbc8e054cd10cbb482c7191175c32271ca Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An equal amount of the expected postretirement benefit obligation for an employee generally shall be attributed to each year of service in the attribution period (a benefit-years-of-service approach). ##### [715-60-35-63](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-63) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:bd8b16e4f4683841a56aa3306a9d04e04caad554483e5584abba4eb0d30353d6 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Some plans may frontload benefits, that is some plans have a [benefit formula](https://asc.understandingaccounting.org/glossary/b/#benefit-formula "The basis for determining benefits to which participants may be entitled under a postretirement benefit plan. A plan's benefit formula specifies the years of service to be rendered, age to be attained while in service, or a combination of both that must be met for an employee to be eligible to receive benefits under the plan. A plan's benefit formula may also define the beginning of the credited service period and the benefits earned for specific periods of service.") that defines benefits in terms of specific periods of service to be rendered in exchange for those benefits but attributes all or a disproportionate share of the expected postretirement benefit obligation to employees' early years of service in the attribution period. ##### [715-60-35-64](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-64) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:c0c19fdf153658122e51a55135b9d460bfbdc7a7b6a93244d4ff525e80a52c48 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For that type of plan, the expected postretirement benefit obligation shall not be attributed ratably to each year of service in the attribution period but shall be attributed in accordance with the plan's benefit formula. ##### [715-60-35-65](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-65) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:f193148bc51e8eb7b8bd3cffdbd6fa22276073a937c5c54a3417abad995c1dbf Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Whether a plan is frontloaded is determined by considering the active participants as a group rather than applying the benefit formula to each individual participant. Paragraph [715-60-55-59](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-59) contains an example of a benefit formula that results in a frontloaded benefit for a plan that provides only postretirement death benefits. ##### [715-60-35-66](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-66) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:1b963a6b0fdfe93c9d4925bf526b28f3b31ecc9ae0c99c3243ee6a234011f527 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The beginning of the attribution period generally shall be the date of hire. However, if the plan's benefit formula grants credit only for service from a later date and that credited service period is not nominal in relation to employees' total years of service before their full eligibility dates, the expected postretirement benefit obligation shall be attributed from the beginning of that credited service period. ##### [715-60-35-67](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-67) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:c40466dfca8643f0f3daf73492faa9a0d42d185f4cc41f1252938ce534ad4960 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For a plan with a benefit formula that attributes benefits to a credited service period that is nominal in relation to employees' total years of service before their full eligibility dates, an equal amount of the expected postretirement benefit obligation for an employee is attributed to each year of that employee's service from date of hire to date of full eligibility for benefits. ##### [715-60-35-68](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-68) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:c3f965448e1ad79a6290a9aa98baaa6de3458957b5a6856743f1b8c2a1fdf003 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In all cases, the end of the attribution period shall be the full eligibility date. For postretirement benefit plans that are pay-related or that otherwise index benefits during employees' service periods to their retirement date, the full eligibility date and retirement date may be the same. The attribution period for those benefits will differ from the attribution period for a similarly defined pension benefit with a capped credited service period. ##### [715-60-35-69](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-69) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:923e0b5a169d0ad9b623ace937c459831e843baa1056222ab9183678cfa99cb7 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Therefore, the present value of all of the benefits expected to be received by or on behalf of an employee is attributed to the employee's credited service period, which ends at the full eligibility date. ##### [715-60-35-70](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-70) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:50c026d07c317d08ae013c9aae0dc7ef80c0e9bb8ebc302231ef3860187036c5 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See paragraphs [715-60-55-57 through 55-59](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-57) , which illustrate the attribution provisions of this Subtopic, and paragraphs [715-60-55-10 through 55-18](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-10) for implementation guidance on attribution provisions. ##### [715-60-35-71](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-71) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:7f3b9d620a7ea4a6b381adc56ed54f2b9bc263d8fa3d139e8cc4775b1fe4abd5 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Measuring the net periodic postretirement benefit cost and accumulated postretirement benefit obligation based on best estimates is superior to implying, by a failure to accrue, that no cost or obligation exists before the payment of benefits. This Subtopic requires the use of [explicit assumptions](https://asc.understandingaccounting.org/glossary/e/#explicit-approach-to-assumptions "An approach under which each significant assumption used reflects the best estimate of the plan's future experience solely with respect to that assumption. See Implicit Approach to Assumptions."), each of which individually represents the best estimate of a particular future event, to measure the expected postretirement benefit obligation. A portion of that expected postretirement benefit obligation is attributed to each period of an employee's service associated with earning the postretirement benefits, and that amount is accrued as service cost for that period. ##### [715-60-35-72](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-72) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:eb27e8769fd1be0896971eb8e6445fc724d6f600db8722384d83297348b11793 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The service cost component of postretirement benefit cost, any prior service cost, and the accumulated postretirement benefit obligation are measured using actuarial assumptions and present value techniques to calculate the actuarial present value of the expected future benefits attributed to periods of employee service. Each assumption used shall reflect the best estimate solely with respect to that individual assumption. All assumptions shall presume that the plan will continue in effect in the absence of evidence that it will not continue. ##### [715-60-35-73](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-73) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:c0484bca4331d74e829050f10d6ddc8030a3e721acfaf79e8590a6e8a4f94136 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Principal actuarial assumptions include, but are not limited to, all of the following: 1. a The time value of money (discount rates) 2. b Participation rates (for [contributory plans](https://asc.understandingaccounting.org/glossary/c/#contributory-plan "A plan under which retirees or active employees contribute part of the cost. In some contributory plans, retirees or active employees wishing to be covered must contribute; in other contributory plans, participants' contributions result in increased benefits.")) 3. c Retirement age 4. d Salary progression (for pay-related plans) 5. e The probability of payment (turnover, [dependency status](https://asc.understandingaccounting.org/glossary/d/#dependency-status "The status of a current or former employee having dependents (for example, a spouse or other relatives) who are expected to receive benefits under a postretirement benefit plan that provides dependent coverage."), mortality, and so forth) 6. f Factors affecting the amount and timing of future benefit payments, which for postretirement health care benefits consider past and present [per capita claims cost by age](https://asc.understandingaccounting.org/glossary/p/#per-capita-claims-cost-by-age "The current cost of providing postretirement health care benefits for one year at each age from the youngest age to the oldest age at which plan participants are expected to receive benefits under the plan. See Assumed per Capita Claims Cost (By Age)."), health care cost trend rates, and [Medicare reimbursement rates](https://asc.understandingaccounting.org/glossary/m/#medicare-reimbursement-rates "The health care cost reimbursements expected to be received by retirees through Medicare as mandated by currently enacted legislation. Medicare reimbursement rates vary by the type of benefits provided."), and so forth. ##### [715-60-35-74](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-74) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:984ade2c9c59d7e5310042aea7afdba0c8c0c59b3799cad20b4d2c691dfeeaba Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subtopic also requires use of an assumption about the long-term rate of return on plan assets and a market-related value of plan assets to calculate the expected return on plan assets. ##### [715-60-35-75](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-75) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:a5138f24835abc1a794523fe9edfbd97c30b6166aeb5b883dbfeccedf56b8fab Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. All assumptions shall be consistent to the extent that each reflects expectations about the same future economic conditions, such as future rates of inflation. Measuring service cost and the expected and accumulated postretirement benefit obligations based on estimated future compensation levels entails considering any indirect effects, such as benefit limitations, that would affect benefits provided by the plan. For example, a plan may define the maximum benefit to be provided under the plan (a fixed cap). In measuring the expected postretirement benefit obligation under that plan, the projected benefit payments would be limited to that cap. For a plan that automatically adjusts the maximum benefit to be provided under the plan for the effects of inflation (an adjustable cap), the expected postretirement benefit obligation would be measured based on adjustments to that cap consistent with the assumed inflation rate reflected in other inflation-related assumptions. ##### [715-60-35-76](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-76) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:42f2be19f13a32701e8a622344e87d89207e875bb994af2597a2c8c9cfbb71d9 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For example, assumed discount rates include an inflationary element that reflects the expected general rate of inflation. Assumed compensation levels include consideration of future changes attributable to general price levels. Similarly, assumed health care cost trend rates include an element that reflects expected general rates of inflation for the economy overall and an element that reflects price changes of health care costs in particular. To the extent that those assumptions consider similar inflationary effects, the assumptions about those effects shall be consistent. ##### [715-60-35-77](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-77) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:0b65838e8c5b6bc19eb87162fb12bb180699ddb46b6fb5881adef50cc1142e2c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Many of the assumptions used in postretirement benefit measurements are similar to assumptions used in pension measurements, but the sensitivity of the measures to changes in the assumptions may be more significant. For example, the turnover assumption may have a more significant effect for postretirement benefits than for pension benefits because, in many cases, eligibility for postretirement benefits is an all-or-nothing proposition, while most pension plans provide reduced benefits for relatively short periods of service. The dependency status assumption also may have a more significant effect on postretirement benefit measurements than on pension measurements. Plan provisions that entitle an employee's spouse and other dependents to health care and other welfare benefits may substantially increase an employer's cost and obligation for postretirement benefits. ##### [715-60-35-78](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-78) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:c03910d7a2f89c56675cf48c8d73c8cec95271645cfeceba1cd446c47bc48ada Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Postretirement benefit measurements are more sensitive to assumptions about retirement ages and the probability of retiring at each age than are pension measurements. For example, employer-provided postretirement health care benefits are significantly more expensive before Medicare coverage begins than after. Many pension arrangements provide for an actuarially reduced pension benefit for employees retiring before the normal retirement age; however, for an employee retiring early, there typically is no reduction in the postretirement benefit levels, and those benefits will be paid over a longer period of time and at a higher annual cost to the employer than if the employee retired at the normal retirement age. Similarly, postretirement benefit measurements are more sensitive than pension measurements to the life expectancy assumption. In particular, health care benefits are sensitive to that assumption because health care costs generally increase with age. ##### [715-60-35-79](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-79) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:9d84fd9932cd1b92bc76e9219eaaa786307d91c4d48b18ead985df0aca829768 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Assumed discount rates shall reflect the time value of money as of the measurement date in determining the present value of future cash outflows currently expected to be required to satisfy the postretirement benefit obligation. In making that assumption, employers shall look to rates of return on high-quality fixed-income investments currently available whose cash flows match the timing and amount of expected benefit payments. If settlement of the obligation with third-party insurers is possible (for example, the purchase of nonparticipating life insurance contracts to provide death benefits), the interest rates inherent in the amount at which the postretirement benefit obligation could be settled are relevant in determining the assumed discount rates. Assumed discount rates are used in measurements of the expected and accumulated postretirement benefit obligations and the service cost and interest cost components of net periodic postretirement benefit cost. ##### [715-60-35-80](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-80) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:8e9e9c0dd84f9df96f1d00dc1df6b1f309b74a6f90bc165b955f7e74d74dda96 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Pursuant to paragraph [715-60-35-79](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-79), an employer shall look to rates of return on high-quality fixed-income investments in determining assumed discount rates. The objective of selecting assumed discount rates using that method is to measure the single amount that, if invested at the measurement date in a portfolio of high-quality debt instruments, would provide the necessary future cash flows to pay the postretirement benefits when due. Notionally, that single amount, the accumulated postretirement benefit obligation, would equal the fair value of a portfolio of high-quality zero coupon bonds whose maturity dates and amounts would be the same as the timing and amount of the expected future benefit payments. Because cash inflows would equal cash outflows in timing and amount, there would be no reinvestment risk in the yields to maturity of the portfolio. ##### [715-60-35-81](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-81) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:8fb1500864147adf41d650afe477b98423633ee09aa6083380b1810826da57b7 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. However, in other than a zero coupon portfolio, such as a portfolio of long-term debt instruments that pay semiannual interest payments or whose maturities do not extend far enough into the future to meet expected benefit payments, the assumed discount rates (the yield to maturity) need to incorporate expected reinvestment rates available in the future. Those rates shall be extrapolated from the existing yield curve at the measurement date. ##### [715-60-35-82](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-82) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:1631dc4910b6768fa7aeab2454726507183a6dede7d7e15d1f44501b8ae6dbbd Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The determination of the assumed discount rate is separate from the determination of the expected rate of return on plan assets whenever the actual portfolio differs from the hypothetical portfolio described in the preceding paragraph. Assumed discount rates shall be reevaluated at each measurement date. If the general level of interest rates rises or declines, the assumed discount rates shall change in a similar manner. ##### [715-60-35-83](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-83) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:f4ac1898d8d3fb7069721818dc0b36c30f097766b73877c8e158c93777fb581a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See paragraph [715-60-55-4](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-4) for implementation guidance on discount rates used to measure an employer's postretirement benefit obligation. ##### [715-60-35-84](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-84) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:1efba3c174aa57b3a0bc3e5f1af007639b2714859a94f0ec6254a1a0d541dea7 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The expected long-term rate of return on plan assets shall reflect the average rate of earnings expected on the existing assets that qualify as plan assets and contributions to the plan expected to be made during the period. In estimating that rate, appropriate consideration shall be given to the returns being earned on the plan assets currently invested and the rates of return expected to be available for reinvestment. ##### [715-60-35-85](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-85) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:74f093f212b7ca76a2cf082e1d5b5e0b59311f7de794878cd4c18809cfa7fba3 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Unlike most pension plans, the return on postretirement benefit plan assets may be subject to income tax because of the lack of tax-exempt vehicles for funding those benefits. At present, even if postretirement benefit plan assets are restricted and segregated within a trust, the income generated by those assets generally is taxable. If the plan has taxable income, the assessed tax will reduce the returns available for payment of benefits or reinvestment. If the trust or other entity holding the plan assets is taxed as a separate entity on the return on plan assets, the expected long-term rate of return shall be determined by giving consideration to anticipated income taxes under enacted tax law. However, if the tax on income generated by plan assets is not a liability of the plan, but of the employer, the expected long-term rate of return shall not anticipate a tax on those earnings, because that tax will be reflected in the employer's accounting for income taxes (see Topic 740). ##### [715-60-35-86](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-86) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:9209a98518d28b9c20ea08eae689ee0e6522621472dffce6917f2d6eb4fdf7b0 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Thus, if the return on plan assets is taxable to the trust or other fund under the plan, the expected long-term rate of return shall be reduced to reflect the related income taxes expected to be paid under existing law. ##### [715-60-35-87](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-87) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:06ef9e5d8bbdf1e69e07125b6454c3533e64855729162b0ab5249b70dea5ef59 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The expected long-term rate of return on plan assets is used with the market-related value of plan assets to compute the expected return on plan assets. (See paragraph [715-60-35-26](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-26).) There is no assumption of an expected long-term rate of return on plan assets for plans that are unfunded or that have no assets that qualify as plan assets pursuant to this Subtopic. ##### [715-60-35-88](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-88) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:d12e71b998d89df32206a0687ee8efaa7f09dc1e3fca11514cfc61afb44daa0c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The service cost component of net periodic postretirement benefit cost and the expected and accumulated postretirement benefit obligations shall reflect future compensation levels to the extent the postretirement benefit formula defines the benefits wholly or partially as a function of future compensation levels. For such pay-related plans, assumed compensation levels shall reflect the best estimate of the actual future compensation levels of the individual employees involved, including future changes attributed to general price levels, productivity, seniority, promotion, and other factors. ##### [715-60-35-89](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-89) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:12959fd5aa7bb590cb5a4f86d4a7038331876b40b2be7fcbe7d95beec40a25ed Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For pay-related plans, salary progression is included in measuring the expected postretirement benefit obligation. For example, a postretirement health care plan may define the deductible amount or copayment, or a postretirement life insurance plan may define the amount of death benefit, based on the employee's average or final level of annual compensation. ##### [715-60-35-90](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-90) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:ed4026ccb9e5d8178eb90acbdb1bc19ab043ef1b0f7070399c16cfa04d2a2a11 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Measurement of an employer's postretirement health care obligation requires the use of several assumptions unique to health care benefits. Most significantly, it includes making several assumptions about factors that will affect the amount and timing of future benefit payments for postretirement health care. Those factors include consideration of historical per capita claims cost by age, health care cost trend rates (for plans that provide a benefit in kind), and medical coverage to be paid by governmental authorities and other providers of health care benefits. Recent claims cost experience and the claims cost experience of other employers in the same industry or geographical location may provide useful information in developing the assumed per capita claims cost by age from the earliest age at which a plan participant could receive benefits under the plan to the longest life expectancy. Data files developed and maintained by insurers or benefits consultants about employers' claims costs for similar benefits programs and national or regional statistics about claims cost patterns also may provide information that may be used for developing the per capita claims cost by age. ##### [715-60-35-91](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-91) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:b387fc8006294e2e10b95fe95fd15e018caa69d9e5a34e3b9327619f6a1a1bac Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In principle, an employer's share of the expected future postretirement health care cost for a plan participant is developed by reducing the assumed per capita claims cost at each age at which the plan participant is expected to receive benefits under the plan by both of the following: 1. a The effects of coverage by Medicare and other providers of health care benefits 2. b The effects of the cost-sharing provisions of the plan (deductibles, copayment provisions, out-of-pocket limitations, caps on the limits of the employer-provided payments, and retiree contributions). ##### [715-60-35-92](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-92) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:4af4f7a3c8928158a1f3a3ed68720e9e7d5d42a0e7be0b9bd02dc5831c49cbda Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The resulting amount represents the [assumed net incurred claims cost](https://asc.understandingaccounting.org/glossary/a/#assumed-per-capita-claims-cost-by-age "The annual per capita cost, for periods after the measurement date, of providing the postretirement health care benefits covered by the plan from the earliest age at which an individual could begin to receive benefits under the plan through the remainder of the individual's life or the covered period, if shorter. To determine the assumed per capita claims cost, the per capita claims cost by age based on historical claims costs is adjusted for assumed health care cost trend rates. The resulting assumed per capita claims cost by age reflects expected future costs and is applied with the plan demographics to determine the amount and timing of future gross eligible charges. See Gross Eligible Charges and Per Capita Claims Cost (by Age).") at each age at which the plan participant is expected to receive benefits under the plan. If contributions are required to be paid by active plan participants toward their postretirement health care benefits, the actuarial present value of the plan participants' future contributions reduces the actuarial present value of the aggregate assumed net incurred claims costs. ##### [715-60-35-93](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-93) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:4602c03bfdc493eede5a51e3d476fbb93da06a1301f3de65947ff2b2265a697c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The assumed per capita claims cost shall be the best estimate of the expected future cost of the benefits covered by the plan. It may be appropriate to consider other factors in addition to age, such as sex and geographical location, in developing the assumed per capita claims cost. ##### [715-60-35-94](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-94) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:807804874f99cd597cc7cb731cba2a6d3dc3fb9fa181228eb60ffae6585ecfa8 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Past and present claims data for the plan, such as a historical pattern of gross claims by age (claims curve), should be used in developing the current per capita claims cost to the extent that those data are considered to be indicative of the current cost of providing the benefits covered by the plan. Those current claims data shall be adjusted by the assumed health care cost trend rate. The resulting assumed per capita claims cost by age, together with the [plan demographics](https://asc.understandingaccounting.org/glossary/p/#plan-demographics "The characteristics of the plan population including geographical distribution, age, sex, and marital status."), determines the amount and timing of expected future [gross eligible charges](https://asc.understandingaccounting.org/glossary/g/#gross-eligible-charges "The cost of providing the postretirement health care benefits covered by the plan to a plan participant, before adjusting for expected reimbursements from Medicare and other providers of health care benefits and for the effects of the cost-sharing provisions of the plan."). ##### [715-60-35-95](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-95) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:5f710fc88bbe187d168176771d4ee651ae3b01668b12c5126d88f45ff68accba Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In the absence of sufficiently reliable plan data about the current cost of the benefits covered by the plan, the current per capita claims cost should be based, entirely or in part, on the claims information of other employers to the extent those costs are indicative of the current cost of providing the benefits covered by the plan. For example, the current per capita claims cost may be based on the claims experience of other employers derived from information in data files developed by insurance entities, actuarial firms, or employee benefits consulting firms. The current per capita claims cost developed on those bases shall be adjusted to best reflect the terms of the employer's plan and the plan demographics. For example, the information should be adjusted, as necessary, for differing demographics, such as the age and sex of plan participants, health care utilization patterns by men and women at various ages, and the expected geographical location of retirees and their dependents, and for significant differences between the nature and types of benefits covered by the employer's plan and those encompassed by the underlying data. ##### [715-60-35-96](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-96) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:8665777cc7e0d18b6b28d47438a596c72007e8a6ee46373e04d048b166f58471 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For a plan that stipulates that the benefit to be provided is the payment of certain health insurance premiums for retirees rather than the payment of their health care claims, the employer shall project the cost of those future premiums in measuring its benefit obligation. That projection requires an assessment of how future health care costs will affect future premiums. ##### [715-60-35-97](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-97) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:0c233c27a1d84a3b92c8c01785d32b42dc7d8c42019b6dc476eb88fe98d8770b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In some cases, retiree contributions are established based on the average per capita cost of benefit coverage under an employer's health care plan that provides coverage to both active employees and retirees. However, the medical cost of the retirees may cause the average per capita cost of benefit coverage under the plan to be higher than it would be if only active employees were covered by the plan. In that case, the employer has a postretirement benefit obligation for the portion of the expected future cost of the retiree health care benefits that are not recovered through retiree contributions, Medicare, or other providers of health care benefits. ##### [715-60-35-98](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-98) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:1e092a4e55c8d990c45c6ad906b2342dd3941f95b1545bc6eec1b2e61a083f28 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If significant, the internal and external costs directly associated with administering the postretirement benefit plan also shall be accrued as a component of assumed per capita claims cost. ##### [715-60-35-99](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-99) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:09fd91bd2aeb6d9e5a6160724b36d2b3a5ab0a7f20e07858424611042eac14bf Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The assumption about health care cost trend rates represents the expected annual rates of change in the cost of health care benefits currently provided by the postretirement benefit plan, due to factors other than changes in the demographics of the plan participants, for each year from the measurement date until the end of the period in which benefits are expected to be paid. Past and current health care cost trends shall be used in developing an employer's assumed health care cost trend rates, which implicitly consider estimates of health care inflation, changes in health care utilization or delivery patterns, technological advances, and changes in the health status of plan participants. ##### [715-60-35-100](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-100) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:0ddc672d77c73a699f1625e299beaf5f9a754f3694dedcde88482862e8529577 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Differing services, such as hospital care and dental care, may require the use of different health care cost trend rates. It is appropriate for that assumption to reflect changes in health care cost trend rates over time. For example, the health care cost trend rates may be assumed to continue at the present level for the near term, or increase for a period of time, and then grade down over time to an estimated health care cost trend rate ultimately expected to prevail. ##### [715-60-35-101](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-101) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:257f5d5f5664692a1eb69eac01da93614469dce7ceba42b5d0b46208ac9376fc Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An assumption about changes in the health status of plan participants considers, for example, the probability that certain claims costs will be incurred based on expectations of future events, such as the likelihood that some retirees will incur claims requiring technology currently being developed or that historical claims experience for certain medical needs may be reduced as a result of participation in a wellness program. ##### [715-60-35-102](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-102) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:fbb8098c4ad825409be35b56d0e40f943217cc84ee322e3390316ac5d06c2c8c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Certain medical claims may be covered by governmental programs under existing law or by other providers of health care benefits. Benefit coverage by those governmental programs shall be assumed to continue as provided by the present law and by other providers pursuant to their present plans. Presently enacted changes in the law or amendments of the plans of other health care providers that take effect in future periods and that will affect the future level of their benefit coverage shall be considered in current-period measurements for benefits expected to be provided in those future periods. Future changes in laws concerning medical costs covered by governmental programs and future changes in the plans of other providers shall not be anticipated. ##### [715-60-35-103](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-103) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:c25174d3c6304850aea387b6d2a409286aae6d726c12540529fca800ca1ebbf7 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. As an example of another provider of health care benefits, a retiree's spouse also may be covered by the spouse's present (or former) employer's health care plan. In that case, the spouse's employer (or former employer) may provide either primary or secondary postretirement health care benefits to the retiree's spouse or dependents. ##### [715-60-35-104](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-104) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:b99e1a1e89bafbd138075194198024abd0e81271389f94f7a5f3dbf653912e9f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In some cases, determining the assumed per capita claims cost by age as described in paragraphs [715-60-35-93 through 35-95](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-93) may not be practical because credible historical information about the gross per capita cost of covered benefits may not be available or determinable to satisfy the stated measurement approach. However, credible historical information about incurred claims costs may be available. In those cases, an alternative method of developing the assumed per capita claims cost may be used provided the method results in a measure that is the best estimate of the expected future cost of the benefits covered by the plan. For example, the assumed health care cost trend rates may be determined by adjusting the expected change in the employer's share of per capita incurred claims cost by age by a factor that reflects the effects of the plan's cost-sharing provisions. However, an approach that projects [net incurred claims costs](https://asc.understandingaccounting.org/glossary/n/#net-incurred-claims-cost-by-age "The employer's share of the cost of providing the postretirement health care benefits covered by the plan to a plan participant; incurred claims cost net of retiree contributions. See Incurred Claims Cost (by Age).") using unadjusted assumed health care cost trend rates would implicitly assume changes in the plan's cost-sharing provisions at those assumed rates and, therefore, is not acceptable unless the plan's cost-sharing provisions are indexed in that manner or the substantive plan (see paragraphs [715-60-35-48 through 35-56](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-48) ) operates in that manner. ##### [715-60-35-105](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-105) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:4a990a441daf5e6632d75dffd27dbd9efb237c4e818221b045549638394d8438 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See paragraphs [715-60-55-5 through 55-9](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-5) for implementation guidance on assumed per capita health care costs. #### Measurement of Plan Assets ##### [715-60-35-106](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-106) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:014f32fe3cd48e6c4f8c29886f49b867f1d5e50c9ca61717cd2d224d56b8ea09 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For recognition guidance on the funded statuses of other postretirement benefit plans, see paragraph [715-60-25-1](https://asc.understandingaccounting.org/asc/715/60/#715-60-25-1). ##### [715-60-35-107](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-107) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:fd1e39712c09e1adac5051638136e3ab7dae753d237b93cdbba41e0b70beebb0 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For purposes of the disclosures required by paragraph [715-20-50-1](https://asc.understandingaccounting.org/asc/715/20/#715-20-50-1) and paragraph [715-20-50-5](https://asc.understandingaccounting.org/asc/715/20/#715-20-50-5), plan investments, whether [equity](https://asc.understandingaccounting.org/glossary/e/#equity-security "Any security representing an ownership interest in an entity (for example, common, preferred, or other capital stock) or the right to acquire (for example, warrants, rights, forward purchase contracts, and call options) or dispose of (for example, put options and forward sale contracts) an ownership interest in an entity at fixed or determinable prices. However, the term does not include convertible debt or preferred stock that by its terms either must be redeemed by the issuing entity or is redeemable at the option of the investor.") or [debt securities](https://asc.understandingaccounting.org/glossary/d/#debt-security "Any security representing a creditor relationship with an entity. The term debt security also includes all of the following: Preferred stock that by its terms either must be redeemed by the issuing entity or is redeemable at the option of the investor A collateralized mortgage obligation (or other instrument) that is issued in equity form but is required to be accounted for as a nonequity instrument regardless of how that instrument is classified (that is, whether equity or debt) in the issuer's statement of financial position U.S. Treasury securities U.S. government agency securities Municipal securities Corporate bonds Convertible debt Commercial paper All securitized debt instruments, such as collateralized mortgage obligations and real estate mortgage investment conduits Interest-only and principal-only strips. The term debt security excludes all of the following: Option contracts Financial futures contracts Forward contracts Lease contracts Receivables that do not meet the definition of security and, so, are not debt securities, for example: Trade accounts receivable arising from sales on credit by industrial or commercial entities Loans receivable arising from consumer, commercial, and real estate lending activities of financial institutions."), real estate, or other, shall be measured at their fair value as of the measurement date. (See paragraph [715-60-35-120](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-120).) The fair value of an investment shall be reduced by brokerage commissions and other costs normally incurred in a sale if those costs are significant (similar to fair value less cost to sell). Plan assets used in plan operations (for example, buildings, equipment, furniture and fixtures, and leasehold improvements) shall be measured at cost less accumulated depreciation or amortization for all purposes. ##### [715-60-35-108](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-108) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:f71e72edb66f263627b691760936d25b20729a374122056716c769de1eb481ea Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See paragraphs [715-60-55-26 through 55-28](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-26) for implementation guidance on plan assets. #### Insurance Contracts ##### [715-60-35-109](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-109) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:1597b9fe01a0959371976fa0f785cb7f535b603b5ad445b4a8fc2ad5d4239af9 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Benefits covered by insurance contracts shall be excluded from the accumulated postretirement benefit obligation. Insurance contracts shall be excluded from plan assets, except as provided in paragraphs [715-60-25-3](https://asc.understandingaccounting.org/asc/715/60/#715-60-25-3) and [715-60-35-115 through 35-116](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-115) for the cost of participation rights. ##### [715-60-35-110](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-110) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:8da68101a9e8176660a3186060c12536104e48eadf51b30548888c299df732e2 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If the insurance entity providing the contract does business primarily with the employer and related parties (a [captive insurer](https://asc.understandingaccounting.org/glossary/c/#captive-insurer "An insurance entity that does business primarily with related entities.")) or if there is any reasonable doubt that the insurance entity will meet its obligations under the contract, the contract is not an [insurance contract](https://asc.understandingaccounting.org/glossary/i/#insurance-contract "A contract in which an insurance entity unconditionally undertakes a legal obligation to provide specified benefits to specific individuals in return for a fixed consideration or premium. An insurance contract is irrevocable and involves the transfer of significant risk from the employer (or the plan) to the insurance entity.") for purposes of this Subtopic. ##### [715-60-35-111](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-111) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:31382a61cf6ab05493caf03e2902cfa1347a096ceb2d57784f7d0573cf1cfbe5 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An insurance contract with a captive insurer generally does not qualify as a [plan asset](https://asc.understandingaccounting.org/glossary/p/#plan-assets "Assets—usually stocks, bonds, and other investments (except certain insurance contracts as noted in paragraph 715-60-35-109)—that have been segregated and restricted (usually in a trust) to be used for a health and welfare plan (which can include active, terminated, and retired employees or their dependents or beneficiaries). The amount of plan assets includes amounts contributed by the employer, and by plan participants for a contributory plan, and amounts earned from investing the contributions, less benefits, income taxes, and other expenses incurred. 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. Securities of the employer held by the plan are includable in plan assets provided they are transferable. 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 the employer may intend that those assets be used to provide health and welfare benefits, which may include postretirement benefits. Those assets shall be accounted for in the same manner as other employer assets of a similar nature and with similar restrictions. If a plan has liabilities other than for benefits, those nonbenefit obligations are considered as reductions of plan assets. Amounts accrued by the employer but not yet paid to the plan are not plan assets. If a trust arrangement explicitly provides that segregated assets are available to satisfy claims of creditors in bankruptcy, such a provision would effectively permit those assets to be used for other purposes at the discretion of the employer. It is not necessary to determine that a trust is bankruptcy-proof for the assets of the trust to qualify as plan assets. However, assets held in a trust that explicitly provides that such assets are available to the general creditors of the employer in the event of the employer's bankruptcy would not qualify as plan assets.") unless it meets the criteria in the definition of the term plan assets. To qualify as a plan asset, an investment contract with a captive insurer shall be segregated and restricted for the payment of postretirement benefits. Note that whether a funding vehicle can be restricted solely for the payment of retirees' benefits is subject to legal, not accounting, interpretation. ##### [715-60-35-112](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-112) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:b8cbb5015cfa6885d50ba4463d9cf0b0b8e0b3f80fa7c0be05e3a365982fd8bc Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In addition, because a plan's investment contract with a captive insurance entity represents an obligation of the employer to pay cash to be used to pay benefits and because amounts accrued by the employer to pay benefits are not plan assets, that contract shall be considered an employer debt security for purposes of this Subtopic and, therefore, must be currently transferable to be included in plan assets. (See paragraphs [715-60-55-26 through 55-28](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-26) for guidance on employer entities.) ##### [715-60-35-113](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-113) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:e3bcab75bac5ea1c108b38df606bec792ded1d40540979e1b3b1e0ce3bf382f7 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See paragraphs [944-20-15-16 through 15-19](https://asc.understandingaccounting.org/asc/944/20/#944-20-15-16) for a description of investment contracts. ##### [715-60-35-114](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-114) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:3119bf0a2eb617c999655e1bf88f4bd2b974fc7041cefb42187e407fc22d7d06 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Some insurance contracts (participating insurance contracts) provide that the purchaser (either the plan or the employer) may participate in the experience of the insurance entity. Under those contracts, if the insurance entity has favorable experience, the insurance entity will pay dividends to the purchaser, the effect of which is to reduce the cost of the plan. For example, if the insurance entity's investment return is better than anticipated, or perhaps if actual experience related to mortality or other assumptions is favorable, the purchaser will receive dividends that reduce the cost of the contract. ##### [715-60-35-115](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-115) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:34c7ac1b988bae6061decc4e7b060b6e867a137955dd9d4f9213a4f171d01fb5 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The purchase price of a [participating insurance](https://asc.understandingaccounting.org/glossary/p/#participating-insurance "Insurance in which the policyholder is entitled to participate in the earnings or surplus of the insurance entity. The participation occurs through the distribution of dividends to policyholders.") contract ordinarily is higher than the price of an equivalent contract without 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."). The difference is the cost of the participation right. ##### [715-60-35-116](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-116) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:62df7e2109b76e46ced3ab01797df39129fd1a3dc3fa71c77d051180de959583 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In subsequent periods, the participation right shall be measured at its fair value if the contract is such that fair value is reasonably estimable. Otherwise the participation right shall be measured at its amortized cost (not in excess of its net realizable value), and the cost shall be amortized systematically over the expected dividend period under the contract. ##### [715-60-35-117](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-117) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:5429f289c67b03ee5c46ccec4e5c1b2f5390a53cb6fc42579fe9939d070eb404 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If the participating insurance contract causes the employer to remain subject to all or most of the risks and rewards associated with the benefit obligation covered or the assets transferred to the insurance entity, that contract is not an insurance contract for purposes of this Subtopic, and the purchase of that contract does not constitute a settlement pursuant to paragraphs [715-60-35-150 through 35-155](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-150) and [715-60-35-157 through 35-159](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-157) . ##### [715-60-35-118](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-118) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:4933fbebe21efcb37aadeae60bb1382181cabf080d17dd2b84a242c191cdc4a0 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. To the extent that insurance contracts are purchased during the period to cover postretirement benefits attributed to service in the current period (such as life insurance benefits), the cost of those benefits shall be the cost of purchasing the coverage under the contracts, except as provided in paragraphs [715-60-25-3](https://asc.understandingaccounting.org/asc/715/60/#715-60-25-3) and [715-60-35-115 through 35-116](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-115) for the cost of a participation right. If all the postretirement benefits attributed to service in the current period are covered by [nonparticipating insurance contracts](https://asc.understandingaccounting.org/glossary/n/#nonparticipating-insurance-contract "An insurance contract that does not provide for the purchaser to participate in the investment performance or in other experience of the insurance entity. See Insurance Contract.") purchased during that period, the cost of the contracts determines the service cost component of net postretirement benefit cost for that period. ##### [715-60-35-119](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-119) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:1c7e900ff00b3e440048ec1d55951181bd995ba596efdf378697e8886fd1626d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Benefits attributed to current service in excess of benefits provided by nonparticipating insurance contracts purchased during the current period shall be accounted for according to the provisions of this Subtopic applicable to plans not involving insurance contracts. ##### [715-60-35-120](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-120) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:75faf62e44b664519fdfa7cb78b1f3cba38c9906b52d90bba5b5fbda3dbcb2ad Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Other contracts with insurance entities may not meet the definition of an insurance contract because the insurance entity does not unconditionally undertake a legal obligation to provide specified benefits to specified individuals. Those contracts shall be accounted for as investments and measured at fair value. If a contract has a determinable cash surrender value or conversion value, that is presumed to be its fair value. For some contracts, the best available estimate of fair value may be contract value. #### Timing of Measurement ##### [715-60-35-121](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-121) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:8a31a39755952bf4cbb0c347d8a95e60ba94643c1323f31349290bba645c0c76 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The measurements of plan assets and benefit obligations required by this Subtopic shall be as of the date of the employer's fiscal year-end statement of financial position, unless either of the following conditions applies: 1. a The plan is sponsored by a subsidiary that is consolidated using a fiscal period that differs from its parent's, as permitted by paragraph [810-10-45-12](https://asc.understandingaccounting.org/asc/810/10/#810-10-45-12). 2. b The plan is sponsored by an investee that is accounted for using the equity method of accounting under Subtopic 323-10, using financial statements of the investee for a fiscal period that is different from the investor's, as permitted by paragraph [323-10-35-6](https://asc.understandingaccounting.org/asc/323/10/#323-10-35-6). ##### [715-60-35-122](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-122) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:da7dd370d004807ae2b0fab5bac50e1c431efe01c17ae9ebfa0df85e3d2fae30 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In those cases, the employer shall measure the subsidiary's plan assets and benefit obligations as of the date used to consolidate the subsidiary's statement of financial position and shall measure the investee's plan assets and benefit obligations as of the date of the investee's financial statements used to apply the equity method. ##### [715-60-35-123](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-123) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:d4dd476dad7048855b2e1f866628f818f97a75b1d0f7a1cb2cdb5cd62f355a86 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For example, if a calendar year-end parent consolidates a subsidiary using the subsidiary's September 30 financial statements, the funded status of the subsidiary's benefit plan included in the consolidated financial statements shall be measured as of September 30. ##### [715-60-35-123A](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-123A) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:1ab8c3a12843f0918ac6bd58643f70f46aab4adb7c1e4660783b8d873a457021 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If an employer's fiscal year-end does not coincide with a month-end, the employer may measure plan assets and benefit obligations using the month-end that is closest to the employer's fiscal year-end. That election shall be applied consistently from year to year. The practical expedient shall be applied consistently to all of its defined benefit plans if an employer has more than one defined benefit plan. ##### [715-60-35-123B](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-123B) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:7237d25dc7b26a39fb8ac8dfbc1e312456d1489b89188da0ca1e5eb4e09b70c2 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If an employer measures plan assets and benefit obligations in accordance with paragraph [715-60-35-123A](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-123A) and a contribution or significant event caused by the employer (such as a plan amendment, settlement, or curtailment that calls for a remeasurement) occurs between the month-end date used to measure plan assets and benefit obligations and the employer's fiscal year-end, the employer shall adjust the fair value of plan assets and the actuarial present value of benefit obligations so those contributions or significant events are recognized in the period in which they occurred. An employer should not adjust the fair value of plan assets and the actuarial present value of benefit obligations for other events occurring between the month-end date used to measure plan assets and benefit obligations and the employer's fiscal year-end that may be significant to the measurement of defined benefit plan assets and obligations, but are not caused by the employer (for example, changes in market prices or interest rates). ##### [715-60-35-124](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-124) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:27abc171c9aa65718b21a89c1d1d89187631cf00576bc6ff42ab71fc3ab4b898 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Even though the postretirement benefit measurements are required as of a particular date, all procedures are not required to be performed after that date. As with other financial statement items requiring estimates, much of the information can be prepared as of an earlier date and projected forward to account for subsequent events (for example, employee service). ##### [715-60-35-125](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-125) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:f161a793d8bb8e6ad9d62b431e831226980c0968c36d2a8869191d795bb2980d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Measurements of net periodic postretirement benefit cost for both interim and annual financial statements generally shall be based on the assumptions at the beginning of the year (assumptions used for the previous year-end measurements of plan assets and obligations) unless more recent measurements of both plan assets and the accumulated postretirement benefit obligation are available. ##### [715-60-35-126](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-126) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:094e9fb907edff283652ee23b26139a7e9e724e5eca5a0a1402a477262b950dd Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For example, if a significant event occurs, such as a plan amendment, settlement, or curtailment, that ordinarily would call for remeasurement, the assumptions used for those later measurements shall be used to remeasure net periodic postretirement benefit cost from the date of the event to the year-end measurement date. ##### [715-60-35-126A](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-126A) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:2096062c2e67ea22dc812654b5599e76e19f945b3757ad4e1d6f25beb0e78fd4 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If a significant event caused by the employer (such as a plan amendment, settlement, or curtailment) that requires an employer to remeasure both plan assets and benefit obligations does not coincide with a month-end, the employer may elect to remeasure plan assets and benefit obligations using the month-end that is closest to the date of the significant event. ##### [715-60-35-126B](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-126B) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:277a070bbf01147093c7e6ceb3c5760f81565ad384633fd1341ca2ffbdcca304 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If an employer remeasures plan assets and benefit obligations during the fiscal year in accordance with paragraph [715-60-35-126A](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-126A), the employer shall adjust the fair value of plan assets and the actuarial present value of benefit obligations for any effects of the significant event that may or may not be captured in the month-end measurement (for example, if the closest month-end is before the date of a partial settlement, then the measurement of plan assets may include assets that are no longer part of the plan). An employer shall not adjust the fair value of plan assets and the actuarial present value of benefit obligations for other events occurring between the month-end date used to measure plan assets and benefit obligations and the employer's fiscal year-end that may be significant to the measurement of defined benefit plan assets and obligations, but are not caused by the employer (for example, changes in market prices or interest rates). ##### [715-60-35-127](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-127) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:0cd34b20bde23c1c50da6896b7155161f521ece950cbf956de2d1a7a06c54e7c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Unless an employer remeasures both its plan assets and benefit obligations during the fiscal year, the funded status it reports in its interim-period statement of financial position shall be the same asset or liability recognized in the previous year-end statement of financial position adjusted for subsequent accruals of net periodic postretirement benefit cost that exclude the amortization of amounts previously recognized in other comprehensive income (for example, subsequent accruals of service cost, interest cost, and return on plan assets) and contributions to a funded plan, or benefit payments. #### Employers with Two or More Plans ##### [715-60-35-128](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-128) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:e714620bc4ef35a0f67982d992f07c6de767a360ebb864ad327cc2b3a0c28984 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An employer may have separate medical care, dental care, and eye care plans that provide benefit coverage to all retirees of the entity. Similarly, an employer may combine two or more unfunded plans that provide the same benefits to different groups of plan participants. For example, an employer may have identical postretirement medical care plans at each of its operating locations. This Subtopic permits combining plans in those situations because the differences in the plans are not substantive. Combining information in those cases results in combined measurements for accounting and disclosure purposes. ##### [715-60-35-128A](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-128A) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:6aed5ef2199cca310922c1e324d689f7392d59446747ee9ef5bac266f7639c52 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. As required by paragraph [715-60-25-2](https://asc.understandingaccounting.org/asc/715/60/#715-60-25-2), 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. ##### [715-60-35-129](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-129) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:f0a63e0c61d7ae525b341e0ba38f0a07ca2c3f540e61bee696913c8897574526 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Postretirement benefits offered by an employer may vary in nature and may be provided to different groups of employees. As discussed in the following paragraph, in some cases an employer may aggregate data from unfunded plans for measurement purposes in lieu of performing separate measurements for each unfunded plan (including plans whose designated assets are not appropriately segregated and restricted and thus have no plan assets as that term is used in this Subtopic). Net periodic postretirement benefit cost, the accumulated postretirement benefit obligation, and plan assets shall be determined for each separately measured plan or aggregation of plans by applying the provisions of this Subtopic to each such plan or aggregation of plans. ##### [715-60-35-130](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-130) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:98df6ab2985718353fa3d82d88e26f44a5ae2baae93946f27411d914d9aa1ab3 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The data from all unfunded postretirement health care plans may be aggregated for measurement purposes if those plans provide different benefits to the same group of employees or those plans provide the same benefits to different groups of employees. Data from other unfunded postretirement welfare benefit plans may be aggregated for measurement purposes in similar circumstances, such as when an employer has a variety of welfare benefit plans that provide benefits to the same group of employees. However, a plan that has plan assets (as defined herein) shall not be aggregated with other plans but shall be measured separately. #### Multiple-Employer Plans ##### [715-60-35-131](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-131) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:efae2c9f08a4510dfcff21ede4b7d6c55fa3e36287e0ba317e3626e461ca1a66 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Some postretirement benefit plans to which two or more unrelated employers contribute are not multiemployer plans. Rather, those [multiple-employer plans](https://asc.understandingaccounting.org/glossary/m/#multiple-employer-plan "A pension plan or other postretirement benefit plan maintained by more than one employer but not treated as a multiemployer plan. Multiple-employer plans are generally not collectively bargained and are intended to allow participating employers, commonly in the same industry, to pool their plan assets for investment purposes and to reduce the cost of plan administration. A multiple-employer plan maintains separate accounts for each employer so that contributions provide benefits only for employees of the contributing employer. Multiple-employer plans may have features that allow participating employers to have different benefit formulas, with the employer's contributions to the plan based on the benefit formula selected by the employer.") are in substance aggregations of single-employer plans, combined to allow participating employers to pool plan assets for investment purposes or to reduce the costs of plan administration. Those plans ordinarily do not involve collective-bargaining agreements. They may also have features that allow participating employers to have different benefit formulas, with the employer's contributions to the plan based on the benefit formula selected by the employer. Those plans shall be considered single-employer plans rather than multiemployer plans for purposes of this Subtopic, and each employer's accounting shall be based on its respective interest in the plan. #### Transfer of Excess Pension Assets to a Retiree Health Care Benefits Account ##### [715-60-35-132](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-132) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:514eca128c017c8ec70cacd95bb0c629e5857ce1aec94780822f6453ea906498 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See paragraph [715-30-35-73](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-73). ### Medicare Prescription Drug, Improvement, and Modernization Act ##### [715-60-35-133](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-133) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:bd474269d694b185bb58b743783ee96ac378025c45350c214f88928ea8cc59a3 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Changes in coverage provided by governmental programs (see paragraph [715-60-35-102](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-102)) shall be considered in the period that the law is changed. However, the Medicare Prescription Drug, Improvement, and Modernization Act introduces the following two new features to Medicare that an employer needs to consider in determining those measurements: 1. a A subsidy that is based on 28 percent of an individual beneficiary's annual prescription drug costs between $250 and $5,000 (subject to indexation and the provisions of the Act as to allowable retiree costs) 2. b The opportunity for a retiree to obtain a prescription drug benefit under Medicare. ##### [715-60-35-134](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-134) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:a457c79ed57df562e1153e1b5bfb155610be9c88c5b047a244b7253aef02c3a7 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Regardless of the impact of the subsidy, the existence of prescription drug coverage under Medicare Part D may have an effect on an employer's per capita claims cost for a [plan](https://asc.understandingaccounting.org/glossary/p/#plan "An arrangement that is mutually understood by an employer and its employees, whereby an employer undertakes to provide its employees with benefits after they retire in exchange for their services over a specified period of time, upon attaining a specified age while in service, or a combination of both. A plan may be written or it may be implied by a well-defined, although perhaps unwritten, practice of paying postretirement benefits or from oral representations made to current or former employees. See Substantive Plan.") that currently provides a prescription drug benefit. That effect depends on whether current and future [retirees](https://asc.understandingaccounting.org/glossary/r/#retirees "Collectively, that group of plan participants that includes retired employees, their beneficiaries, and covered dependents.") (or their beneficiaries under the employer-sponsored plan) enroll in the voluntary Medicare Part D plan and on the Act's macrosocioeconomic effects on health care cost trends and consumers' behavior. ##### [715-60-35-135](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-135) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:cb2f83159c8171f455573e1bf6958b545dcfa010ae9047d1b7114f341aa06ac6 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In response to the Act, or for other reasons, an employer may amend an existing plan (or establish a new one). To the extent that an employer amends a plan (positively or negatively), the [accumulated postretirement benefit obligation](https://asc.understandingaccounting.org/glossary/a/#accumulated-postretirement-benefit-obligation "The actuarial present value as of a particular date of all future benefits attributed to an employee's service rendered to that date assuming the plan continues in effect and that all assumptions about future events are fulfilled. The accumulated postretirement benefit obligation generally reflects a ratable allocation of expected future benefits to employee service already rendered in the attribution period. Before an employee's full eligibility date, the accumulated postretirement benefit obligation as of a particular date for an employee is the portion of the expected postretirement benefit obligation attributed to that employee's service rendered to that date; on and after the full eligibility date, the accumulated and expected postretirement benefit obligations for an employee are the same.") will be affected by the direct effects of the change in [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.") attributed to employee services already rendered. If an amendment changes the determination as to the actuarial equivalency of benefits available under the plan, the expected subsidy to the employer also will change. ##### [715-60-35-136](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-136) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:a5e564af17bbe2c9a53011a18acd829902724c85dd0e60a55ba7ddf8b98c8c71 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Therefore, under that guidance, measures of the accumulated postretirement benefit obligation and net periodic other postretirement benefit cost on or after the date of enactment shall reflect the effects of the Act. ##### [715-60-35-137](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-137) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:f3ca87cf068c2949a55fe55f2ac38dea2658039869e34482a62d95deb7a14e5f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. When an employer initially accounts for the subsidy its effect on the accumulated postretirement benefit obligation shall be accounted for as an actuarial experience gain pursuant to paragraphs [715-60-35-23](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-23) and [715-60-35-29 through 35-33](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-29) . ##### [715-60-35-138](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-138) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:48edb2b2f088499c82bff7c78b89bcf774d4536e044a68c7514fe0aa66dd119f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Because the subsidy affects the employer's share of its plan's costs, the subsidy is included in measuring the costs of benefits attributable to current service. Therefore, the subsidy reduces service cost when it is recognized as a component of net periodic other postretirement benefit cost. ##### [715-60-35-139](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-139) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:3ba9459684ec01e088e46bf2e63a49dd40c6b694315cc791c1fef7a5f8e56d96 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If an estimate of the expected subsidy subsequently changes—as a result of changes in regulations or legislation, changes in the underlying estimates of other postretirement prescription drug costs, or for reasons other than a [plan amendment](https://asc.understandingaccounting.org/glossary/p/#plan-amendment "A change in the existing terms of a plan or the initiation of a new plan. A plan amendment may increase benefits (a positive plan amendment), or reduce or eliminate benefits (a negative plan amendment), including those benefits attributed to years of service already rendered.")—the effect of the change in estimate is an actuarial experience [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.") pursuant to paragraph [715-60-35-23](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-23). ##### [715-60-35-140](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-140) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:c3919e29858abcfe099695dd2c1c026ec404fcce7a072f301a3fa0abe0d5baf7 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If prescription drug benefits currently available under an existing plan are deemed not actuarially equivalent as of the date of enactment of the Act, but the plan is subsequently amended to provide actuarially equivalent benefits, the direct effect of the plan amendment on the accumulated postretirement benefit obligation (that is, the effect of only the change in prescription drug coverage) and the effect on the accumulated postretirement benefit obligation from any resulting subsidy to which the employer is expected to be entitled as a result of the amendment shall be combined. If that combined effect reduces the accumulated postretirement benefit obligation, it is deemed to be an actuarial experience gain pursuant to paragraph [715-60-35-23](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-23). If the combined effect increases the accumulated postretirement benefit obligation, it is deemed to be [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.") that shall be accounted for pursuant to paragraphs [715-60-35-13 through 35-19](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-13) . ##### [715-60-35-141](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-141) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:8757cf6ab1ad62f79d7f8b6669cfad32456aa37aaebadb9923694a3d2f082276 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A plan that provides prescription drug benefits that previously were deemed actuarially equivalent under the Act may be subsequently amended to reduce its prescription drug coverage and that reduced coverage may not be considered actuarially equivalent. In that circumstance, any actuarial experience gain related to the subsidy previously recognized is unaffected. However, the combined net effect on the accumulated postretirement benefit obligation of the subsequent plan amendment that reduces benefits under the plan and thus disqualifies the benefits as actuarially equivalent and the elimination of the subsidy shall be accounted for as prior service cost (credit) as of the date the amendment is adopted. ##### [715-60-35-142](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-142) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:7e9ec2ab5955fa9df88a91df2ad064fe14c5c24dcf9b24d64a751b2ea4de584b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. When first determining the effects of the Act, an employer and its actuarial consultants may have been unable to determine the extent to which the benefits provided by a plan are actuarially equivalent as of the date of the initial measurement applying the guidance in the Medicare Prescription Drug, Improvement, and Modernization Act Subsections. ##### [715-60-35-143](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-143) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:a3f4cdf71035ab346208ebcba27f57fc3e04e85dd161a6e0b358c3b90552efb6 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If additional clarifying regulations related to the Act or new information about the interpretation or determination of actuarial equivalency under the Act becomes available, the employer shall reconsider whether the benefits provided under its plan, as presently constructed, are actuarially equivalent. If that reconsideration results in a conclusion that benefits provided by the plan are actuarially equivalent (or that additional benefits provided by the plan are actuarially equivalent in the case of a plan under which an employer previously had determined that some benefits were actuarially equivalent), that conclusion could be a significant event pursuant to paragraphs [715-60-35-125 through 35-128](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-125) . ##### [715-60-35-144](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-144) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:74611982d2fda73c35263bcb949aaca349111c400840118bd5bedffe53157aff Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. However, the guidance in the preceding paragraph does not apply if a plan amendment is the event that gives rise to the employer's reconsideration of actuarial equivalency. The guidance in paragraphs [715-60-35-140 through 35-141](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-140) applies to plan amendments. ##### [715-60-35-145](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-145) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:a2878dc0c4ba4d866b5ba08f2220375deee3546e979ae9470c8615668bd5e99c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If the effects of the subsidy on the plan are significant, a measurement of [plan assets](https://asc.understandingaccounting.org/glossary/p/#plan-assets "Assets—usually stocks, bonds, and other investments (except certain insurance contracts as noted in paragraph 715-60-35-109)—that have been segregated and restricted (usually in a trust) to be used for a health and welfare plan (which can include active, terminated, and retired employees or their dependents or beneficiaries). The amount of plan assets includes amounts contributed by the employer, and by plan participants for a contributory plan, and amounts earned from investing the contributions, less benefits, income taxes, and other expenses incurred. 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. Securities of the employer held by the plan are includable in plan assets provided they are transferable. 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 the employer may intend that those assets be used to provide health and welfare benefits, which may include postretirement benefits. Those assets shall be accounted for in the same manner as other employer assets of a similar nature and with similar restrictions. If a plan has liabilities other than for benefits, those nonbenefit obligations are considered as reductions of plan assets. Amounts accrued by the employer but not yet paid to the plan are not plan assets. If a trust arrangement explicitly provides that segregated assets are available to satisfy claims of creditors in bankruptcy, such a provision would effectively permit those assets to be used for other purposes at the discretion of the employer. It is not necessary to determine that a trust is bankruptcy-proof for the assets of the trust to qualify as plan assets. However, assets held in a trust that explicitly provides that such assets are available to the general creditors of the employer in the event of the employer's bankruptcy would not qualify as plan assets.") and obligations shall be performed as of the date that actuarial equivalency is determined. ##### [715-60-35-146](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-146) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:d6e4a6284037bcb6fefbe2c1f51e17b6bee470e911f58e2575b63b52c68a5d33 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Any effect on the accumulated postretirement benefit obligation due to the subsidy shall be reflected as an actuarial gain consistent with the guidance in paragraph [715-60-35-137](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-137). ##### [715-60-35-147](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-147) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:5ec2c50443202280b215a82b454ced518c5da204324b8509f10185c2a724d1fd Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Measures of [net periodic postretirement benefit cost](https://asc.understandingaccounting.org/glossary/n/#net-periodic-postretirement-benefit-cost "The amount recognized in an employer's financial statements as the cost of a postretirement benefit plan for a period. Components of net periodic postretirement benefit cost include service cost, interest cost, actual return on plan assets, gain or loss, amortization of prior service cost or credit, and amortization of the transition obligation or asset.") for subsequent periods would reflect the effects of those measurements. ##### [715-60-35-148](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-148) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:fa2f23b6f6ac45a60fa18b3962cfb91ff6512cc077c3407ac2af9c0eb7a673a9 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Prior financial statements shall not be retroactively adjusted nor shall a cumulative effect for prior periods be recognized in income. ### Settlements, Curtailments, and Certain Termination Benefits ##### [715-60-35-149](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-149) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:ccaea95cae6b9ea8061fe433a6d89807fa93fbfe072d68df04325ec02286de80 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subtopic provides for delayed recognition in [net periodic postretirement benefit cost](https://asc.understandingaccounting.org/glossary/n/#net-periodic-postretirement-benefit-cost "The amount recognized in an employer's financial statements as the cost of a postretirement benefit plan for a period. Components of net periodic postretirement benefit cost include service cost, interest cost, actual return on plan assets, gain or loss, amortization of prior service cost or credit, and amortization of the transition obligation or asset.") of the effects of a [plan](https://asc.understandingaccounting.org/glossary/p/#plan "An arrangement that is mutually understood by an employer and its employees, whereby an employer undertakes to provide its employees with benefits after they retire in exchange for their services over a specified period of time, upon attaining a specified age while in service, or a combination of both. A plan may be written or it may be implied by a well-defined, although perhaps unwritten, practice of paying postretirement benefits or from oral representations made to current or former employees. See Substantive Plan.") initiation or a [plan amendment](https://asc.understandingaccounting.org/glossary/p/#plan-amendment "A change in the existing terms of a plan or the initiation of a new plan. A plan amendment may increase benefits (a positive plan amendment), or reduce or eliminate benefits (a negative plan amendment), including those benefits attributed to years of service already rendered."), the [transition obligation](https://asc.understandingaccounting.org/glossary/t/#transition-obligation "The amount, as of the date Subtopic 715-60 was initially applied, of the accumulated postretirement benefit obligation in excess of the fair value of plan assets plus any recognized accrued postretirement benefit cost or less any recognized prepaid postretirement benefit cost.") or [transition asset](https://asc.understandingaccounting.org/glossary/t/#transition-asset "The amount, as of the date Subtopic 715-60 was initially applied, of the fair value of plan assets plus any recognized accrued postretirement benefit cost or less any recognized prepaid postretirement benefit cost in excess of the accumulated postretirement benefit obligation."), and gains or losses arising in the ordinary course of operations. That is, generally, those amounts are recognized in other comprehensive income with subsequent [amortization](https://asc.understandingaccounting.org/glossary/a/#amortization "The process of reducing a recognized liability systematically by recognizing gains or by reducing a recognized asset systematically by recognizing losses. In accounting for pension benefits or other postretirement benefits, amortization also means the systematic recognition in net periodic pension cost or other postretirement benefit cost over several periods of amounts previously recognized in other comprehensive income, that is, gains or losses, prior service cost or credits, and any transition obligation or asset.") in net periodic postretirement benefit cost. However, in certain circumstances, as discussed in these Subsections, recognition in net periodic postretirement benefit cost of some or all of those amounts initially recognized in other comprehensive income is appropriate. #### Remeasurement of Cost Due to Settlements ##### [715-60-35-150](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-150) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:82317ba5a3e700a641b240dee6c83cfc3af6b7b8807c153eba2667ac16fc1b92 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Settlements](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.") are events that may require income or expense recognition of certain amounts initially recognized in other comprehensive income and adjustments to liabilities or assets recognized in the employer's statement of financial position. The settlement of all or part of the [accumulated postretirement benefit obligation](https://asc.understandingaccounting.org/glossary/a/#accumulated-postretirement-benefit-obligation "The actuarial present value as of a particular date of all future benefits attributed to an employee's service rendered to that date assuming the plan continues in effect and that all assumptions about future events are fulfilled. The accumulated postretirement benefit obligation generally reflects a ratable allocation of expected future benefits to employee service already rendered in the attribution period. Before an employee's full eligibility date, the accumulated postretirement benefit obligation as of a particular date for an employee is the portion of the expected postretirement benefit obligation attributed to that employee's service rendered to that date; on and after the full eligibility date, the accumulated and expected postretirement benefit obligations for an employee are the same.") is an event that requires recognition in income of all or part of a 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 transition asset remaining in accumulated other comprehensive income. A settlement also may accelerate recognition in income of a transition obligation under the constraint in paragraph [715-60-35-39](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-39). ##### [715-60-35-151](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-151) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:46f3512c88b2f9d944fd6eb79321dc8fb86a9762728f970e9214bba29c14bf5f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For purposes of this Subsection, the maximum gain or loss subject to recognition in income when a postretirement benefit obligation is settled is 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.") included in accumulated other comprehensive income defined in paragraphs [715-60-35-23 through 35-32](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-23) plus any transition asset remaining in accumulated other comprehensive income. That maximum gain or loss includes any gain or loss resulting from remeasurements of [plan assets](https://asc.understandingaccounting.org/glossary/p/#plan-assets "Assets—usually stocks, bonds, and other investments (except certain insurance contracts as noted in paragraph 715-60-35-109)—that have been segregated and restricted (usually in a trust) to be used for a health and welfare plan (which can include active, terminated, and retired employees or their dependents or beneficiaries). The amount of plan assets includes amounts contributed by the employer, and by plan participants for a contributory plan, and amounts earned from investing the contributions, less benefits, income taxes, and other expenses incurred. 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. Securities of the employer held by the plan are includable in plan assets provided they are transferable. 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 the employer may intend that those assets be used to provide health and welfare benefits, which may include postretirement benefits. Those assets shall be accounted for in the same manner as other employer assets of a similar nature and with similar restrictions. If a plan has liabilities other than for benefits, those nonbenefit obligations are considered as reductions of plan assets. Amounts accrued by the employer but not yet paid to the plan are not plan assets. If a trust arrangement explicitly provides that segregated assets are available to satisfy claims of creditors in bankruptcy, such a provision would effectively permit those assets to be used for other purposes at the discretion of the employer. It is not necessary to determine that a trust is bankruptcy-proof for the assets of the trust to qualify as plan assets. However, assets held in a trust that explicitly provides that such assets are available to the general creditors of the employer in the event of the employer's bankruptcy would not qualify as plan assets.") and the accumulated postretirement benefit obligation at the time of settlement. ##### [715-60-35-152](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-152) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:0eede108b50ba5d4c507cc53180da006b5b59822aa77c5c2d9fcb4f99362955c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If the entire accumulated postretirement benefit obligation is settled and the maximum amount subject to recognition is a gain, the settlement gain shall first reduce any transition obligation remaining in accumulated other comprehensive income; any excess gain shall be recognized in income. ##### [715-60-35-153](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-153) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:120589ca19b6e6f631cd785cd4c0b5fcd356482d4348456fc844c3c691ce9e0f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If the entire accumulated postretirement benefit obligation is settled and the maximum amount subject to recognition is a loss, the maximum settlement loss shall be recognized in income. If only part of the accumulated postretirement benefit obligation is settled, the employer shall recognize in income the excess of the pro rata portion (equal to the percentage reduction in the accumulated postretirement benefit obligation) of the maximum settlement gain over any remaining transition obligation or a pro rata portion of the maximum settlement loss. ##### [715-60-35-154](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-154) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:a836bc57f976220d7a44e092779ce595a9718341c5f0b189ee555283c2a21873 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. As discussed in paragraph [715-60-35-39](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-39), in measuring the gain or loss subject to recognition in income when a postretirement benefit obligation is settled, an employer must determine whether recognition in income of an additional amount of any transition obligation remaining in accumulated other comprehensive income is required pursuant to the constraint on delayed recognition in income. Any additional transition obligation required to be recognized in income as a result of a settlement is recognized when the related settlement is recognized (see paragraph [715-60-35-40](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-40)). ##### [715-60-35-155](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-155) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:ccf930e0458ea2cb67cbffeb35e8572bc25e4f1c1480befd79b1ed0197827f36 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Because the plan is the unit of accounting, the determination of the effects of a settlement considers only the net gain or loss and transition obligation or asset included in accumulated other comprehensive income related to the plan for which all or a portion of the accumulated postretirement benefit obligation is being settled. ##### [715-60-35-156](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-156) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:78212812589da0c795fd31b65de8f5aae85045a09bc1289df51e9471700ca070 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If the purchase of a [participating insurance](https://asc.understandingaccounting.org/glossary/p/#participating-insurance "Insurance in which the policyholder is entitled to participate in the earnings or surplus of the insurance entity. The participation occurs through the distribution of dividends to policyholders.") contract constitutes a settlement, the maximum gain (but not the maximum loss) shall be reduced by the cost of the [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.") before determining the amount to be recognized in income (see paragraphs [715-60-35-109 through 35-120](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-109) and [715-60-35-160](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-160)). ##### [715-60-35-157](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-157) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:2b513c8718647b55ed5c5ec432d188bfb51316233e67da5eb33e64c80a51f3c6 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For the following types of settlements, the cost of the settlement is: 1. a For a cash settlement, the amount of cash paid to plan participants 2. b For a settlement using nonparticipating insurance contracts, the cost of the contracts 3. c For a settlement using participating insurance contracts, the cost of the contracts less the amount attributed to participation rights (see paragraphs [715-60-35-115 and 35-116](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-115)). ##### [715-60-35-158](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-158) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:32a50345a68dfc855c7e705b2a24a7f601ae7f703276b86fb6015ca110bce4d8 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If the cost of all settlements in a year is less than or equal to the sum of the service cost and interest cost components of net postretirement benefit cost for the plan for the year, gain or loss recognition is permitted but not required for those settlements. However, the accounting policy adopted shall be applied consistently from year to year. ##### [715-60-35-159](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-159) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:916c1dd1a56fa383c45ae2352e30524cd8079049cdde7cf3a89cc8f2d271704b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A settlement requires remeasurement of the accumulated postretirement benefit obligation before the settlement. In addition, after the settlement, net periodic postretirement benefit cost for the remainder of the year is remeasured. ##### [715-60-35-160](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-160) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:d0bb65dee745679568bde7ab7ba756498dba9b95d308b900e6256516fd39038c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If an [insurance contract](https://asc.understandingaccounting.org/glossary/i/#insurance-contract "A contract in which an insurance entity unconditionally undertakes a legal obligation to provide specified benefits to specific individuals in return for a fixed consideration or premium. An insurance contract is irrevocable and involves the transfer of significant risk from the employer (or the plan) to the insurance entity.") is purchased from an insurance entity controlled by the employer, or if a participating insurance contract causes the employer to remain subject to all or most of the risks and rewards associated with the benefit obligation covered or the assets transferred to the insurance entity, that contract is not an insurance contract and the purchase of that contract does not constitute a settlement pursuant to paragraphs [715-60-35-150 through 35-160](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-150) . #### Remeasurement of Cost Due to Curtailments ##### [715-60-35-161](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-161) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:cc975b5b3d5d693d953aaf9e48efa8889a54f3d2dbedf3753d0ae5ff2640685c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Curtailments](https://asc.understandingaccounting.org/glossary/c/#curtailment-of-a-postretirement-benefit-plan "An event that significantly reduces the expected years of future service of active plan participants or eliminates the accrual of defined benefits for some or all of the future services of a significant number of active plan participants.") are events that may require income or expense recognition of certain amounts that were initially recognized in other comprehensive income. ##### [715-60-35-162](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-162) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:f04b3790b2df0a4a7c3f771586d7781627af6695f30a2895e390a27e48892785 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The reduction in active plan participants' expected years of future service or elimination of future benefit accruals caused by a curtailment raises doubt about the continued existence of the future economic [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 prior plan amendments. ##### [715-60-35-163](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-163) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:9c02ca950fbcb40368a6ce00ca2b9eb9c8101986661d6209a7632465700bad58 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Accordingly, these Subsections require recognition in net periodic postretirement benefit cost of any related [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.") included in accumulated other comprehensive income. ##### [715-60-35-164](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-164) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:e4cbace40c5cfd2a99cb8448c6797a3f484486d76009d0b3d29910975093223b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The prior service cost included in accumulated other comprehensive income associated with the portion of the future years of service that had been expected to be rendered, but as a result of a curtailment are no longer expected to be rendered, is a loss. For purposes of measuring the effect of a curtailment, prior service cost includes the cost of plan amendments and any remaining transition obligation. For example, a curtailment may result from the termination of a significant number of employees who were plan participants at the date of a prior plan amendment. ##### [715-60-35-165](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-165) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:59eced9dbda7af13b6b6106cf0f7bb0c7c06322fe7dd325da90aca4719b1a2c0 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The loss associated with that curtailment is measured as the portion of the remaining prior service cost included in accumulated other comprehensive income related to that (and any prior) plan amendment attributable to the previously expected remaining future years of service of the employees who were terminated and the portion of the remaining transition obligation attributable to the previously expected remaining future years of service of the terminated employees who were plan participants at the date of transition. ##### [715-60-35-166](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-166) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:555faec26fa4cdfb57a3b37e91f83d8e7addd064de676daece069ab2f573839f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A curtailment also may result from terminating the accrual of additional benefits for the future services of a significant number of employees. The loss in that situation is both of the following: 1. a A proportionate amount of the remaining prior service cost included in accumulated other comprehensive income based on the portion of the remaining expected years of service in the amortization period that originally was attributable to those employees who were plan participants at the date of the plan amendment and whose future accrual of benefits has been terminated 2. b A proportionate amount of the transition obligation remaining in accumulated other comprehensive income based on the portion of the remaining years of service of all participants active at the date of transition that originally was attributable to the remaining expected future years of service of the employees whose future accrual of benefits has been terminated. ##### [715-60-35-167](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-167) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:d40ee9eeccde04df1f7d6acb7552a6545fb2dfe382d2cab3cb976181d86dd663 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. When a full curtailment occurs, the entire prior service cost and transition obligation remaining in accumulated other comprehensive income is a loss because there are no future years of service to be rendered. ##### [715-60-35-168](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-168) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:e4bc114e152d4cbd04e8e9ad55b06646e1d5a9e4a11b5012787619f003b1606b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Accounting for a curtailment is not applied to any prior service cost newly created at the time of the curtailment. ##### [715-60-35-169](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-169) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:efd3671767de0e69ecf8b5a1c461d8c620e99f192a6626960830551e1a113da2 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The accumulated postretirement benefit obligation may be decreased (a gain) or increased (a loss) by a curtailment. That (gain) loss shall reduce any net loss (gain) included in accumulated other comprehensive income as follows: 1. a To the extent that such a gain exceeds any net loss included in accumulated other comprehensive income (or the entire gain, if a net gain exists), it is a curtailment gain. 2. b To the extent that such a loss exceeds any net gain included in accumulated other comprehensive income (or the entire loss, if a net loss exists), it is a curtailment loss. For purposes of applying the provisions of this paragraph, any transition asset remaining in accumulated other comprehensive income shall be treated as a net gain and shall be combined with the net gain or loss arising after transition to the Settlements, Curtailments, and Certain Termination Benefits Subsections. ##### [715-60-35-170](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-170) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:debfaa87399da004b3524c9359f38dc244cd1125a677b851619030e2a8c8aedd Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Increases in the accumulated postretirement benefit obligation that reflect [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.") are excluded from the scope of paragraphs [715-60-35-161](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-161) through this paragraph (see paragraphs [715-60-25-4 through 25-6](https://asc.understandingaccounting.org/asc/715/60/#715-60-25-4) for guidance on accounting for termination benefits). ##### [715-60-35-171](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-171) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:2421fc32ec657f410e2e6fbcd901bfe4312e301e8e8d346d17d61ec9967dce73 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If the sum of the effects identified in paragraphs [715-60-35-164 through 35-169](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-164) is a net loss, it shall be recognized in income when it is probable that a curtailment will occur and the net effect is reasonably estimable. If the sum of those effects is a net gain, it shall be recognized in income when the related employees terminate or the plan suspension or amendment is adopted. #### Relationship of Settlements or Curtailments to Other Events ##### [715-60-35-172](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-172) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:7190ae70b47a4051b34bb8ece64ed9fe868e08ae76775372734f4040db7eabc8 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A settlement and a curtailment may occur separately or together. ##### [715-60-35-173](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-173) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:0dc5e4e2cfe43259a2a2a34fe6a8d02280f1a210edd9b3d2a616b4d143d715c1 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If benefits expected to be paid in future periods are eliminated for some plan participants (for example, because a significant portion of the work force is dismissed or a plant is closed) but the plan remains in existence and continues to pay benefits, to invest assets, and to receive contributions, a curtailment has occurred but not a settlement. ##### [715-60-35-174](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-174) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:fccd6df2f6c951c392a9b94efebdf07859254e315b32f39990127f7f9755bc0a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If an employer purchases nonparticipating insurance contracts for the accumulated postretirement benefit obligation and continues to provide defined benefits for future service, either in the same plan or in a successor plan, a settlement has occurred but not a curtailment. ##### [715-60-35-175](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-175) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:1853c7a56764f8d32aae1af6439e4e35882a8683164be8e8c23e667958d76b65 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If a [plan termination](https://asc.understandingaccounting.org/glossary/p/#plan-termination "An event in which the pension plan or postretirement benefit plan ceases to exist and all benefits are settled by the purchase of insurance contracts (for example, annuities) or by other means. The plan may or may not be replaced by another plan. A plan termination with a replacement plan may or may not be in substance a plan termination for accounting purposes.") occurs (that is, the obligation is settled and the plan ceases to exist) and the plan is not replaced by a successor defined benefit plan, both a settlement and a curtailment have occurred (whether or not the employees continue to work for the employer). ##### [715-60-35-176](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-176) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:3ec4f0d87c9f1998cf429d8fe16bf76d1d7a8a4bf5b67128989bbb38683f3ccf Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The settlement or the termination of one plan and the adoption of a substantially equivalent replacement plan does not trigger recognition in income of prior service cost. Neither of those events, absent a curtailment, raises sufficient doubt as to the existence of future economic benefits to trigger that recognition in income. ### Split-Dollar Life Insurance Arrangements ##### [715-60-35-177](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-177) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:7bf8004d14858d5f4a6c1d2616f6b17ed8cd1d5b15dccfecbce5184ab31311b3 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For an [endorsement split-dollar life insurance](https://asc.understandingaccounting.org/glossary/e/#endorsement-split-dollar-life-insurance "A split-dollar life insurance arrangement in which the entity owns and controls the insurance policy. The employer enters into a separate agreement that splits the policy benefits between the employer and the employee. The employer owns the policy, controls all rights of ownership, and may terminate the insurance policy (and, in turn, the policy benefits promised to the employee). To effect the split-dollar arrangement, the employer endorses a portion of the death benefits to the employee (the employee designates a beneficiary for this portion of the death benefits). Upon the death of the employee, the employee's beneficiary typically receives the designated portion of the death benefits directly from the insurance entity and the employer receives the remainder of the death benefits.") arrangement within the scope of the Split-Dollar Life Insurance Arrangements Subsections, an employer shall recognize a liability for future [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.") in accordance with this Subtopic (if, in substance, a [postretirement benefit plan](https://asc.understandingaccounting.org/glossary/p/#postretirement-benefit-plan "See Plan.") exists) or Subtopic 710-10 (if the arrangement is, in substance, an individual deferred compensation contract) based on the substantive agreement with the employee.A liability for the benefit obligation under this Subtopic or Subtopic 710-10 has not been settled through the purchase of a typical endorsement split-dollar life insurance arrangement. ##### [715-60-35-178](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-178) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:38aca844bddb419e4524a2de1faa8550b79bbfacaf1a17212202e05fb7cad6fb Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For example, if the employer has effectively agreed to maintain a life insurance policy during the employee's retirement, the cost of the insurance policy during postretirement periods shall be accrued in accordance with either this Subtopic or Subtopic 710-10. ##### [715-60-35-179](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-179) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:09b0232ef6c6f5e41a6e903324a52bce70494d2c34a5418672b6dc6bc617d08d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Similarly, if the employer has effectively agreed to provide the employee with a death benefit, the employer shall accrue, over the service period, a liability for 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 future death benefit as of the employee's expected retirement date, in accordance with either this Subtopic or Subtopic 710-10. ##### [715-60-35-180](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-180) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:39dc65ba2f3871a0128d7c9a89b690cded12643a4126dc94ae896d861c221161 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An employer shall recognize a liability for the postretirement benefit related to a collateral assignment split-dollar life insurance arrangement in accordance with either this Subtopic (if, in substance, a postretirement benefit plan exists) or Subtopic 710-10 (if the arrangement is, in substance, an individual deferred compensation contract) if the employer has agreed to maintain a life insurance policy during the employee's retirement or provide the employee with a death benefit based on the substantive agreement with the employee. ##### [715-60-35-181](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-181) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:db3de84e8879af74d4cd7a7edd32415bef8c3c65dfc0d884b615c2d95e68004e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For example, if the employer has effectively agreed to maintain life insurance policy during the employee's retirement, the estimated cost of maintaining the insurance policy during the postretirement period shall be accrued in accordance with either this Subtopic or Subtopic 710-10. ##### [715-60-35-182](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-182) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:f79384b402b485fda0eab1bc5f193a66d3ee492ac94bf520e3d2602f705d1e0e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Similarly, if the employer has effectively agreed to provide the employee with a death benefit, the employer shall accrue a liability for the actuarial present value of the future death benefit as of the employee's expected retirement date, in accordance with either this Subtopic or Subtopic 710-10. ##### [715-60-35-183](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-183) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:fe340904884d43639002fc7e5d4d81a134818da0ff576b78202e83d8d5d00314 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For purposes of the Split-Dollar Life Insurance Arrangements Subsections, an employer has agreed to maintain a life insurance policy if the employer has stated or implied commitment to provide loans to an employee to fund premium payments on the underlying insurance policy during the postretirement period. Absent evidence to the contrary, it shall be presumed that an employer will provide loans to an employee to fund premium payments on the underlying insurance policy in the postretirement period if the employer has provided loans in the past or if the employer is currently promising to provide loans in the future. ##### [715-60-35-184](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-184) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:4856971aab47e91352dad5902a146811116a202e1c732bbc17e9f941cd399c22 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In periods following the inception of the collateral assignment split-dollar life insurance arrangement, employers shall continue to evaluate (pursuant to the guidance in the Split-Dollar Life Insurance Arrangements Subsections) whether a change in facts and circumstances (for example, an amendment to the arrangement or change from the employer's past practice) has altered the substance of the collateral assignment split-dollar life insurance arrangement, which could result in a liability or an adjustment to a previously recognized liability, for a postretirement benefit. ##### [715-60-35-185](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-185) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:41.029Z to 2026-09-10T01:00:41.029Z Record version: sha256:d06c0f57848a3995ec426b23ae21ddabb4c632d1ed41b0eb50ce1aaeebc17633 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In addition, an employer shall recognize and measure an asset based on the nature and substance of the collateral assignment split-dollar life insurance arrangement. Source downloaded (UTC): 2026-09-10T01:00:44.764Z to 2026-09-10T01:00:44.764Z Record version: sha256:1a4f7dcac753f6a239fd732f2fd064c960b01d3caf6d07c439c8580f89dc7627 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 715-60-50: 50 Disclosure [Read section](https://asc.understandingaccounting.org/asc/715/60/#50-disclosure) SEC content: no ##### [715-60-50-1](https://asc.understandingaccounting.org/asc/715/60/#715-60-50-1) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:44.764Z to 2026-09-10T01:00:44.764Z Record version: sha256:3c0ed257238eaa27409356b034687e350baa89381212c0c747f05432d5c634d6 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See paragraphs [715-20-50-1 through 50-7](https://asc.understandingaccounting.org/asc/715/20/#715-20-50-1) for disclosure requirements for defined benefit plans other than disclosure requirements related to the Medicare Prescription Drug, Improvement, and Modernization Act, which are provided in paragraphs [715-60-50-2 through 50-6](https://asc.understandingaccounting.org/asc/715/60/#715-60-50-2) . ### Medicare Prescription Drug, Improvement, and Modernization Act ##### [715-60-50-2](https://asc.understandingaccounting.org/asc/715/60/#715-60-50-2) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:44.764Z to 2026-09-10T01:00:44.764Z Record version: sha256:c42eebfce69ee928131ff4d5ce48eaa99fdf5aff0e4e3c482a708d4d2380dac7 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subsection provides guidance on disclosures regarding the effect of the Medicare subsidy. This Subsection also provides guidance on the disclosures about the effects of the subsidy for an employer that sponsors a postretirement health care benefit [plan](https://asc.understandingaccounting.org/glossary/p/#plan "An arrangement that is mutually understood by an employer and its employees, whereby an employer undertakes to provide its employees with benefits after they retire in exchange for their services over a specified period of time, upon attaining a specified age while in service, or a combination of both. A plan may be written or it may be implied by a well-defined, although perhaps unwritten, practice of paying postretirement benefits or from oral representations made to current or former employees. See Substantive Plan.") that provides prescription drug coverage but for which the employer has not yet been able to determine actuarial equivalency. ##### [715-60-50-3](https://asc.understandingaccounting.org/asc/715/60/#715-60-50-3) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:44.764Z to 2026-09-10T01:00:44.764Z Record version: sha256:e9b07810de8d4a1a9c2e3f9daa978d88a4265c53cb31cd1be5ae04b53e7785ad Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In interim and annual financial statements for the first period in which an employer includes the effects of the subsidy in measuring the [accumulated postretirement benefit obligation](https://asc.understandingaccounting.org/glossary/a/#accumulated-postretirement-benefit-obligation "The actuarial present value as of a particular date of all future benefits attributed to an employee's service rendered to that date assuming the plan continues in effect and that all assumptions about future events are fulfilled. The accumulated postretirement benefit obligation generally reflects a ratable allocation of expected future benefits to employee service already rendered in the attribution period. Before an employee's full eligibility date, the accumulated postretirement benefit obligation as of a particular date for an employee is the portion of the expected postretirement benefit obligation attributed to that employee's service rendered to that date; on and after the full eligibility date, the accumulated and expected postretirement benefit obligations for an employee are the same.") and the first period in which an employer includes the effects of the subsidy in measuring [net periodic postretirement benefit cost](https://asc.understandingaccounting.org/glossary/n/#net-periodic-postretirement-benefit-cost "The amount recognized in an employer's financial statements as the cost of a postretirement benefit plan for a period. Components of net periodic postretirement benefit cost include service cost, interest cost, actual return on plan assets, gain or loss, amortization of prior service cost or credit, and amortization of the transition obligation or asset."), it shall disclose all of the following: 1. a The reduction in the accumulated postretirement benefit obligation for the subsidy related to [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.") attributed to past service. 2. b The effect of the subsidy on the measurement of net periodic postretirement benefit cost for the current period. That effect includes any [amortization](https://asc.understandingaccounting.org/glossary/a/#amortization "The process of reducing a recognized liability systematically by recognizing gains or by reducing a recognized asset systematically by recognizing losses. In accounting for pension benefits or other postretirement benefits, amortization also means the systematic recognition in net periodic pension cost or other postretirement benefit cost over several periods of amounts previously recognized in other comprehensive income, that is, gains or losses, prior service cost or credits, and any transition obligation or asset.") of the actuarial gain in (a) of this paragraph as a component of the net amortization called for by paragraphs [715-60-35-29 through 35-30](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-29) , the reduction in current period service cost due to the subsidy, and the resulting reduction in interest cost on the accumulated postretirement benefit obligation as a result of the subsidy. 3. c Any other disclosures required by paragraph [715-20-50-1(r)](https://asc.understandingaccounting.org/asc/715/20/#715-20-50-1). ##### [715-60-50-4](https://asc.understandingaccounting.org/asc/715/60/#715-60-50-4) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:44.764Z to 2026-09-10T01:00:44.764Z Record version: sha256:c9a3ef6b770c5b711e90d6db85a8521c3c0b8ffb6c2a14a0e1674b0defbb0966 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For purposes of the disclosures required by paragraph [715-20-50-1(a)](https://asc.understandingaccounting.org/asc/715/20/#715-20-50-1) and [715-20-50-1(f)](https://asc.understandingaccounting.org/asc/715/20/#715-20-50-1), an employer shall disclose gross benefit payments (paid and expected, respectively), including prescription drug benefits, and separately the gross amount of the subsidy receipts (received and expected, respectively). ##### [715-60-50-5](https://asc.understandingaccounting.org/asc/715/60/#715-60-50-5) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:44.764Z to 2026-09-10T01:00:44.764Z Record version: sha256:76966ab5909061383980827b498016a96619afb78f69de5c1619808f4b32a061 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph not used](https://asc.understandingaccounting.org/updates/page-1833002/). ##### [715-60-50-6](https://asc.understandingaccounting.org/asc/715/60/#715-60-50-6) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:44.764Z to 2026-09-10T01:00:44.764Z Record version: sha256:86306d5aeb8dd5419e9f3466feaf8273c71372545791bd062c1dea941dad0843 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Until an employer is able to determine whether benefits provided by its plan are actuarially equivalent, it shall disclose both of the following in financial statements for interim or annual periods: 1. a The existence of the Medicare Prescription Drug, Improvement, and Modernization Act 2. b That measures of the accumulated postretirement benefit obligation or net periodic postretirement benefit cost do not reflect any amount associated with the subsidy because the employer is unable to conclude whether the benefits provided by the plan are actuarially equivalent to Medicare Part D under the Act. Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:e5a6ac37294478ca350f523acf4237f5233bbe186128e697bad17004294df8b1 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 715-60-55: 55 Implementation Guidance and Illustrations [Read section](https://asc.understandingaccounting.org/asc/715/60/#55-implementation-guidance-and-illustrations) SEC content: no #### Implementation Guidance ##### [715-60-55-1](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-1) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:4b74c0b72c4ee515d5c271ee27e82932010b3a07b730cce16e4ecc5c4ed14bac Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A collectively bargained defined benefit postretirement health care [plan](https://asc.understandingaccounting.org/glossary/p/#plan "An arrangement that is mutually understood by an employer and its employees, whereby an employer undertakes to provide its employees with benefits after they retire in exchange for their services over a specified period of time, upon attaining a specified age while in service, or a combination of both. A plan may be written or it may be implied by a well-defined, although perhaps unwritten, practice of paying postretirement benefits or from oral representations made to current or former employees. See Substantive Plan.") of a single employer may stipulate that [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.") will be provided for the duration of the collective-bargaining agreement or may imply or explicitly state that benefits are subject to renegotiation upon the expiration of the current collective-bargaining agreement. Past negotiations have resulted in the continuation of the plan, although the plan has been amended at various times. The [accumulated postretirement benefit obligation](https://asc.understandingaccounting.org/glossary/a/#accumulated-postretirement-benefit-obligation "The actuarial present value as of a particular date of all future benefits attributed to an employee's service rendered to that date assuming the plan continues in effect and that all assumptions about future events are fulfilled. The accumulated postretirement benefit obligation generally reflects a ratable allocation of expected future benefits to employee service already rendered in the attribution period. Before an employee's full eligibility date, the accumulated postretirement benefit obligation as of a particular date for an employee is the portion of the expected postretirement benefit obligation attributed to that employee's service rendered to that date; on and after the full eligibility date, the accumulated and expected postretirement benefit obligations for an employee are the same.") should be measured assuming that benefits will be provided beyond the period covered by the current collective-bargaining agreement. Unless the most recently negotiated collective-bargaining agreement explicitly states for the first time that the payment of [postretirement benefits](https://asc.understandingaccounting.org/glossary/p/#postretirement-benefits "All forms of benefits, other than retirement income, provided by an employer to retirees. Those benefits may be defined in terms of specified benefits, such as health care, tuition assistance, or legal services, that are provided to retirees as the need for those benefits arises, such as certain health care benefits, or they may be defined in terms of monetary amounts that become payable on the occurrence of a specified event, such as life insurance benefits.") will be discontinued upon the contract's expiration and that is the expectation of the parties to the agreement, the presumption of an ongoing plan is not overcome by the presence of an expiration date for the present collective-bargaining agreement. ##### [715-60-55-2](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-2) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:15b54da5e2aaa2542a83dbd0ef8ade734f96d361ed63ff438d9228bb41dd088f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A defined dollar cap is part of an employer's cost-sharing arrangement under which the employer limits the amount it will spend for retiree benefits by defining the maximum dollar amount for each retiree or the retiree group to be applied by the employer toward the cost of retiree benefits. For example, a plan with a defined dollar cap may stipulate that the employer will pay for all retiree health care costs in a year up to a specified dollar limit. A past practice of regular increases (or decreases) in that defined dollar cap may indicate that the cost-sharing provisions of the [substantive plan](https://asc.understandingaccounting.org/glossary/s/#substantive-plan "The terms of the postretirement benefit plan as understood by an employer that provides postretirement benefits and the employees who render services in exchange for those benefits. The substantive plan is the basis for the accounting for that exchange transaction. In some situations an employer's cost-sharing policy, as evidenced by past practice or by communication of intended changes to a plan's cost-sharing provisions, or a past practice of regular increases in certain monetary benefits, may indicate that the substantive plan differs from the extant written plan.") differ from the extant written plan. Future amendments to a written postretirement health care plan that change the amount of a defined dollar cap can be anticipated as part of the substantive plan if the conditions in paragraphs [715-60-35-51 through 35-55](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-51) are satisfied. ##### [715-60-55-3](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-3) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:eb329f715ffb1e9edb9263bee2120b4f738453501a97f14eed1a41731b1e051e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A postretirement health care plan with a defined dollar cap is not considered to be a plan that provides benefits defined in terms of monetary amounts as discussed in paragraph [715-60-35-56](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-56). Changes in monetary benefits provided by one plan or changes in the amount of a defined dollar cap on cost sharing for a different plan may need to be anticipated as part of determining what the substantive plans are. However, the nature of the promises for the two plans differs. Benefits for the first plan are defined in monetary amounts, for example, a stipulated dollar amount of life insurance coverage, whereas benefits offered under the defined dollar capped plan are not defined in monetary amounts. Although the cap on the employer's contribution is defined in monetary terms, the benefits are the specified eligible medical claims with payment by the employer being no greater than the amount of that cap. Changes in the types of benefits or the types of health care costs covered by a plan cannot be anticipated. ##### [715-60-55-4](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-4) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:5959e4cecdc511b8d713112bd7bd2263264b0224e110fb2b10a072c6f160295f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The assumed [discount rates](https://asc.understandingaccounting.org/glossary/d/#discount-rate "A rate or rates used to reflect the time value of money. Discount rates are used in determining the present value as of the measurement date of future cash flows currently expected to be required to satisfy the pension obligation or other postretirement benefit obligation. See Actuarial Present Value.") used to measure an employer's postretirement benefit obligation may be the same rates used to measure its pension benefit obligation under Subtopic 715-30 or they may not be for various reasons. Differences could occur between the discount rates used to measure the pension benefit obligation and the discount rates used to measure the postretirement benefit obligation. For example, the expected timing of postretirement benefit payments may differ from the expected timing of pension benefit payments. Those differences could occur particularly if the participants in each plan are different. In addition, rates implicit in current prices of annuity contracts might be used to measure the pension benefit obligation, and no similar contracts may be available to settle the postretirement benefit obligation (see paragraphs [715-20-55-1 through 55-2](https://asc.understandingaccounting.org/asc/715/20/#715-20-55-1) ). ##### [715-60-55-5](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-5) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:197e3aa1ba1ca53f56981a71d4a2af1fe8a70d72657338730f8a8600d2dc8682 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An employer sponsors a health care plan that provides benefits to both active employees and pre-age-65 [retirees](https://asc.understandingaccounting.org/glossary/r/#retirees "Collectively, that group of plan participants that includes retired employees, their beneficiaries, and covered dependents."). The plan requires active employees and retirees to contribute to the plan. The contributions of active employees may be used to reduce the employer's cost of providing benefits to retirees , but only if the amount contributed by active employees over their service periods exceeds the cost of providing their health care benefits while they are employed and the employer has no obligation to refund that excess. In that case, the excess would be applied to reduce the cost of the retirees' benefits. If active employee contributions do not exceed the cost of active benefits, the full amount of the active employees' contributions should be applied to the cost of their active benefits. The cost of providing health care benefits to active employees should be measured assuming only active employees are covered by the plan. ##### [715-60-55-6](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-6) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:76b5f52d66aca75587f71de93b1fa686505df1e2022b615e10c3a5a94e5088b2 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An employer has a contributory health care plan covering active employees and retirees under which retirees pay 100 percent of the average cost of benefits determined based on the combined experience of active employees and retirees. The employer pays all of the remaining cost. The active employees do not contribute to the plan. Under this arrangement, the employer has an obligation under this Subtopic if the actual cost of providing benefits to the retirees is greater than their contributions. In that case, the employer is subsidizing a portion of the cost of the retirees' benefits. See paragraph [715-60-35-97](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-97). Thus, the employer would have an obligation for the difference between the expected cost of providing the retirees' benefits and the retirees' expected contributions, whether those contributions are established at 100 percent of the average cost or at a lesser amount. ##### [715-60-55-7](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-7) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:c95c50050e2204fefeb0fa298e26ef9edf7c86cec8faffa860d08b45925c8aac Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For a plan that stipulates that the benefit to be provided is the payment of retirees' health care claims, the cost of premiums for insurance that an employer expects to purchase to finance its obligation may be used to measure the obligation if it produces a reasonable estimate of the future cost of benefits covered by the plan. In some situations, such as in a community-rated insurance plan that provides the type of benefits covered by the employer's plan and in which the premium cost to the employer is based on the experience of all participating employers, the claims experience of a single employer generally will have little impact on its premiums. Accordingly, in those situations a projection of future premiums based on the current premium structure and expected changes in the general level of health care costs may provide a reasonable estimate of the employer's obligation. However, if premiums are adjusted for the actual claims experience or the age and sex of the plan's participants (an experience-rated plan), the foregoing projection of the employer's obligation may not produce a reasonable estimate of the future cost of the underlying benefits of the plan. ##### [715-60-55-8](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-8) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:d519b9e980a1b324e5cfd33777418bedcca597a5d7b1202ec77c573d8dee24d8 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An employer that has measured its postretirement health care benefit obligation by projecting the cost of premiums for purchased health care insurance has not reduced or eliminated the applicability of any provisions of this Subtopic. The employer should follow this Subtopic in its entirety including calculating and disclosing the components of [net periodic postretirement benefit cost](https://asc.understandingaccounting.org/glossary/n/#net-periodic-postretirement-benefit-cost "The amount recognized in an employer's financial statements as the cost of a postretirement benefit plan for a period. Components of net periodic postretirement benefit cost include service cost, interest cost, actual return on plan assets, gain or loss, amortization of prior service cost or credit, and amortization of the transition obligation or asset."), which would still include service cost for active employees and interest cost. ##### [715-60-55-9](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-9) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:07236edd754dbca519bd9c5ea198b0c2145dcd7a54d02711b3832a13d8c4f9d0 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. When determining its postretirement benefit obligation , an employer should assume a trend of decreasing (or increasing) [Medicare reimbursement rates](https://asc.understandingaccounting.org/glossary/m/#medicare-reimbursement-rates "The health care cost reimbursements expected to be received by retirees through Medicare as mandated by currently enacted legislation. Medicare reimbursement rates vary by the type of benefits provided.") (for example, certain health care costs may have increased by 15 percent last year but Medicare may have only covered a smaller increase, which increased the employer's or retirees' share of the cost of benefits) only if those changes result from currently enacted legislation or regulations. For instance, to the extent that certain coverage under Medicare changes as a result of applying a legislated formula or historical administrative practice, an employer should consider the effects of those changes in projecting Medicare coverage in future years. Doing so may result in a higher or lower amount of coverage. Future legislation that would change the portion of costs covered by Medicare should not be anticipated even though a historical trend of those changes may be apparent. ##### [715-60-55-10](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-10) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:7e291f8494fa44a6a4d051c57cf1d41b2c3db822c889e92fdf8b958d1c1eaef0 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An employer modifies the eligibility requirements under its [postretirement benefit plan](https://asc.understandingaccounting.org/glossary/p/#postretirement-benefit-plan "See Plan.") by changing the plan's [credited service period](https://asc.understandingaccounting.org/glossary/c/#credited-service-period "Employee service period for which benefits are earned pursuant to the terms of the plan. The beginning of the credited service period may be the date of hire or a later date. For example, a plan may provide benefits only for service rendered after a specified age. Service beyond the end of the credited service period does not earn any additional benefits under the plan. See Attribution Period.") from 25 years of service after age 40 to 15 years of service after both reaching age 50 and rendering 10 years of service. Under the amended plan, the [attribution period](https://asc.understandingaccounting.org/glossary/a/#attribution-period "The period of an employee's service to which the expected postretirement benefit obligation for that employee is assigned. The beginning of the attribution period is the employee's date of hire unless the plan's benefit formula grants credit only for service from a later date, in which case the beginning of the attribution period is generally the beginning of that credited service period. The end of the attribution period is the full eligibility date. Within the attribution period, an equal amount of the expected postretirement benefit obligation is attributed to each year of service unless the plan's benefit formula attributes a disproportionate share of the expected postretirement benefit obligation to employees' early years of service. In that case, benefits are attributed in accordance with the plan's benefit formula. See Credited Service Period.") begins at the date of hire because the plan has an undefined credited service period. The amended plan still requires 25 years of credited service. However, it grants credit for 10 years of service before age 50 and those years of service are not defined. The effect of the change in eligibility requirements is to lengthen the [attribution](https://asc.understandingaccounting.org/glossary/a/#attribution "The process of assigning pension or other postretirement benefits or costs to periods of employee service.") period for employees hired before age 40. ##### [715-60-55-11](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-11) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:5caf33262471c171793490bb354fbabc2fed2b86312e94171fe23d41fee83794 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An employer provides retiree health care and life insurance benefits under one plan. Employees are eligible for health care and death benefits upon attaining age 55 and having rendered 20 years of service; however, the life insurance benefits are based on final pay. Basing the life insurance benefits on final pay extends the [full eligibility date](https://asc.understandingaccounting.org/glossary/f/#full-eligibility-date "The date at which an employee has rendered all of the service necessary to have earned the right to receive all of the benefits expected to be received by that employee (including any beneficiaries and dependents expected to receive benefits). Determination of the full eligibility date is affected by plan terms that provide incremental benefits expected to be received by or on behalf of an employee for additional years of service, unless those incremental benefits are trivial. Determination of the full eligibility date is not affected by plan terms that define when benefit payments commence or by an employee's current marital or dependency status.") to a plan participant's expected retirement date, provided the incremental increase in the life insurance benefits offered under the plan for an employee's service after age 55 is not trivial in relation to the total benefits expected to be received by the employee under that plan. For example, if an employee is expected to fulfill the 20-year service requirement before age 55 and is expected to retire at age 62 with salary increases in all years of service, the employee's full eligibility date is the date he or she reaches age 62. Note that the plan described has an indefinite credited service period, because the qualifying 20-year period is unspecified. Accordingly, the attribution period for that plan begins at the date of hire and ends on the full eligibility date. ##### [715-60-55-12](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-12) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:ab017ac94f20ef9e089f828653bd4ed43615b2c4352d4e7113ba4a7d5fe1b59e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Moreover, even if the terms of the plan described in paragraphs [715-60-55-10 through 55-11](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-10) specified which 20-year service period constituted the credited service period, for example, the first 20 years after date of hire, or the first 20 years of service after age 35, basing life insurance benefits on final pay would still extend the full eligibility date to the expected date of retirement, again, assuming the incremental life insurance benefits after the defined 20 years of service are nontrivial. If the plan formula specifies the first 20 years as the credited service period, the employer needs to assess whether that results in a frontloaded benefit as described in paragraph [715-60-35-62](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-62). If that provision results in a frontloaded benefit, the benefit obligation should not be attributed ratably to each year of service in the attribution period but should be attributed in accordance with the plan's [benefit formula](https://asc.understandingaccounting.org/glossary/b/#benefit-formula "The basis for determining benefits to which participants may be entitled under a postretirement benefit plan. A plan's benefit formula specifies the years of service to be rendered, age to be attained while in service, or a combination of both that must be met for an employee to be eligible to receive benefits under the plan. A plan's benefit formula may also define the beginning of the credited service period and the benefits earned for specific periods of service."). ##### [715-60-55-13](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-13) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:884489f66622e15b61cf96ab919a3e1a56eb98489b1388a392629464e88c5015 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. However, the attribution period for the plan described in paragraphs [715-60-55-10 through 55-11](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-10) would be different if the benefits are provided and accounted for under two separate plans, one providing life insurance benefits and the other providing health care benefits. In that case, the full eligibility date for participants in the life insurance plan would not influence the determination of the full eligibility date for participants in the health care plan. A frontloaded plan may provide two or more benefits, such as health care and life insurance benefits, that are earned under different benefit formulas. For example, assume the typical participant covered by the plan described in paragraphs [715-60-55-10 through 55-11](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-10) is an individual hired at age 20 who is expected to retire at age 62 with 42 years of service. If the [expected postretirement benefit obligation](https://asc.understandingaccounting.org/glossary/e/#expected-postretirement-benefit-obligation "The actuarial present value as of a particular date of the postretirement benefits expected to be paid by the employer's plan to or for each employee, the employee's beneficiaries, and any covered dependents pursuant to the terms of the plan.") at age 40 for that employee is $39,405 ($28,500 for health care benefits and $10,905 for life insurance benefits), a ratable (1/42) allocation of the expected postretirement benefit obligation to each year of service would result in an accumulated postretirement benefit obligation of $18,764 ($13,571 for health care benefits and $5,193 for life insurance benefits) at the end of the 20th year. However, if the plan's benefit formulas for both health care and life insurance benefits stipulate that employees are not required to render additional service after their first 20 years in order to receive those benefits, the aggregate benefits under the plan may be frontloaded, even though life insurance benefits increase for additional years of service beyond the 20th year. See the following calculations: 1. a $10,915 equals 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 life insurance benefits based on final pay, assuming the employee was hired at a salary of $15,000 that increases by 5 percent annually, a life expectancy of 75 years, and a discount rate of 7 percent. 2. b 20/42 x $39,405 = $18,764. 3. c 20/42 x $28,500 = $13,571. 4. d 20/42 x $10,905 = $5,193. ##### [715-60-55-14](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-14) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:3075c2f0d7794a8171788c5de8bfe5b6abe49de4093039b6f0e5128850115793 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If the combined values of both health care and life insurance benefits earned based on their respective benefit formulas after 20 years are significantly greater than the accumulated postretirement benefit obligation that would result from a ratable allocation of the expected postretirement benefit obligation, a disproportionate share of the expected postretirement benefit obligation is attributable under the benefit formulas to the employee's early years of service. In that case, the attribution of the obligation for both benefits under the plan should follow their respective benefit formulas. Following the benefit formulas in this example, the accumulated postretirement benefit obligation for health care and for life insurance benefits for the hypothetical employee at the end of 20 years is $28,500 and $3,728, respectively. Accordingly, the accumulated postretirement benefit obligation for that employee at the end of the first 20 years of service should be $32,228 rather than $18,764; that is, the plan is frontloaded and benefits should be attributed following the benefit formula. (Assumed life insurance benefit equal to Year 20 salary of $39,799 discounted at 7 percent for 35 years = $3,728.) ##### [715-60-55-15](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-15) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:bd19dc697b6e835a2fef68a532012552a6cfa9e3594cc7f5a1fc722680b1e604 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An employer has a retiree health care plan that bases benefits on length of service and requires employees to render a minimum of 10 years of service after attaining age 45 to be eligible for any benefits. However, upon attaining age 45, employees receive credit for 3 percent of the maximum benefit for each year of service before age 45. For example, at age 45 an employee hired at age 25 receives credit for 60 percent (3 percent x 20 years) of the plan's [postretirement health care benefits](https://asc.understandingaccounting.org/glossary/p/#postretirement-health-care-benefits "A form of postretirement benefit provided by an employer to retirees for defined health care services or coverage of defined health care costs, such as hospital and medical coverage, dental benefits, and eye care."). The credited service period begins at the date of hire because the amount of total benefits is based on the years of service rendered after that date. ##### [715-60-55-16](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-16) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:61dd47478342e9bccb051dc0fa6cf948c733185f0b01332f8a247e97532384d9 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An employer requires an employee to participate in its contributory active health care plan to be eligible to participate in its retiree health care plan. An employee can join the active plan at any time before retirement but must have worked 10 years and attained age 55 while in service to be eligible for benefits under the retiree plan. The attribution period for an employee who is or is expected to be a participant in the active plan begins at the date of hire because the plan's eligibility requirements do not specify which 10 years of service must be rendered in exchange for the benefits. That an employee must participate in the contributory active plan does not affect the determination of the attribution period. However, an employee would not be considered a [plan participant](https://asc.understandingaccounting.org/glossary/p/#plan-participant "Any employee or former employee who has rendered service in the credited service period and is expected to receive employer-provided benefits under the postretirement benefit plan, including benefits to or for any beneficiaries and covered dependents. See Active Plan Participant.") if the employer expects that the employee will never contribute to the active plan and, therefore, will not be eligible to participate in the retiree plan. ##### [715-60-55-17](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-17) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:efb2e8f053a1cc8c94ef618c82884659e9b6d5ab5ad90498d7ac2fafc4d78083 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An employer's annual accrual for the service cost component of net periodic postretirement benefit cost should generally relate to only those employees who are in their credited service periods. However, if the credited service period begins later than the date of hire and is considered nominal relative to the employees' average total expected years of service to full eligibility, employees expected to receive benefits under the retiree plan should be considered plan participants at the date of hire, and the expected obligation for their benefits should be accrued from that date. ##### [715-60-55-18](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-18) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:6f0bd074e8416bd7505e5ec2ab75ae88b4785a23d78388c985b42f23148d141c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In determining the attribution period, judgment is required to determine whether a credited service period is nominal. Generally, a nominal credited service period is a period that is very short compared to employees' average total expected years of service before full eligibility. ##### [715-60-55-19](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-19) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:4a750906b89ec28635d2fcb644a6434d1b06a216e0eb9edb293b8061793d074a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An employer's previous accounting for postretirement benefits has considered the written plan to be the substantive plan. On July 1, 20X1, its board of directors approves a negative [plan amendment](https://asc.understandingaccounting.org/glossary/p/#plan-amendment "A change in the existing terms of a plan or the initiation of a new plan. A plan amendment may increase benefits (a positive plan amendment), or reduce or eliminate benefits (a negative plan amendment), including those benefits attributed to years of service already rendered.") (that is, an amendment that reduces benefits attributable to prior service) that will be effective on January 1, 20X3. The employer intends to announce the negative plan amendment to plan participants on July 1, 20X2. The effects of the negative plan amendment should be accounted for as of July 1, 20X2, when it is communicated to plan participants and not as of July 1, 20X1, the date of the board's approval. The amendment in this instance will not be communicated within a reasonable period of time after its adoption. Therefore, the extant unamended written plan continues to be the substantive plan that should be accounted for because it represents the last plan whose terms were mutually understood by the employer and the plan participants. ##### [715-60-55-20](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-20) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:f85b9e456f31305f7e7f2e6a299bbff937ae7c5acbcfde2d6ea5deaef114954a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. It is important to distinguish between a reduction in the accumulated postretirement benefit obligation caused by a negative plan amendment and a reduction caused by a curtailment. Unless the plan is being terminated, a reduction in the accumulated postretirement benefit obligation caused by a negative plan amendment that exceeds any [transition obligation](https://asc.understandingaccounting.org/glossary/t/#transition-obligation "The amount, as of the date Subtopic 715-60 was initially applied, of the accumulated postretirement benefit obligation in excess of the fair value of plan assets plus any recognized accrued postretirement benefit cost or less any recognized prepaid postretirement benefit cost.") or [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.") included in accumulated other comprehensive income is not immediately recognized as a reduction of current postretirement benefit costs. ##### [715-60-55-21](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-21) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:5e2dc99465333725e1efbdeca7323ab1b4218251200ba774a66b0e0a012782b1 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An employer adopts an amendment to its postretirement health care plan that has the dual effect of expanding the plan's coverage and increasing the deductible. The increase in the deductible should not be measured and recognized separately from the benefit improvement. If a plan amendment results in numerous changes to a plan that both increase and decrease benefits attributed to prior service, the net effect of all those changes should be considered at the same time to determine whether there has been a net positive or negative plan amendment. If the combined effect of all the changes is a net increase in benefits (a positive plan amendment), the resulting prior service cost should be accounted for in accordance with paragraphs [715-60-35-16 through 35-17](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-16) or paragraph [715-60-35-18](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-18). If the combined effect is a net decrease in benefits (a negative plan amendment), the effect should be accounted for in accordance with paragraph [715-60-35-20](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-20). ##### [715-60-55-22](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-22) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:aa250715a5437b1ff0d62f7165b275ece451266b759dd17146e366ad9a0b966f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An employer sponsors a contributory postretirement health care plan that has an annual limitation on the dollar amount of the employer's share of the cost of benefits (a defined dollar capped plan). The cap on the employer's share of annual costs and the retirees' contribution rates are increased 5 percent annually. Any amount by which incurred claims costs exceed the combined employer and retiree contributions is initially borne by the employer but is passed back to retirees in the subsequent year through supplemental retiree contributions for that year. In 20X1, incurred claims costs exceed the combined employer and retiree contributions requiring a supplemental retiree contribution in 20X2. The employer decides in 20X2 to absorb the excess that arose in 20X1 rather than pass it on to the retirees. The employer should recognize as a component of net periodic postretirement benefit cost the loss due to that temporary deviation from the substantive plan. The employer should recognize the loss as a component of net periodic postretirement benefit cost in 20X2 when it makes the decision to deviate from the substantive plan. ##### [715-60-55-23](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-23) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:bd51a15e02de8a395d17f0ce0b8ce538412471478e791839c765e97fd0f10b98 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An employer previously projected that health care costs under a defined dollar capped plan would exceed the cap in 20X1 but actual claims in that year do not exceed the cap. The resulting gain should not be recognized immediately as a component of net periodic postretirement benefit cost in 20X1 in accordance with paragraphs [715-60-35-34 through 35-35](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-34) . ##### [715-60-55-24](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-24) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:c43d825fab62e72604a1c2cce0b9d566854405c28534b7809d37c23b01d994be Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The change in the accumulated postretirement benefit obligation due to experience different from that assumed results in a [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.") that should be recognized in accumulated other comprehensive income in accordance with paragraphs [715-60-35-23 through 35-25](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-23) . Paragraphs [715-60-35-34 through 35-35](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-34) addresses the recognition of a temporary deviation from provisions of the substantive plan that increases or decreases the employer's share of the benefit costs incurred in the current or past periods. A situation that would result in a gain or loss that should be recognized immediately as a component of net periodic postretirement benefit cost is one in which an employer has a past practice of changing the cap to reduce its share of expenses such that that practice constitutes the cost-sharing provision of the substantive plan. If, as a result of perceived economic adversity affecting the retiree population, the employer decides in 20X1 and for that year alone not to change the cap to further reduce its share of expenses in 20X1 as had been anticipated in the substantive plan, that action would give rise to a loss that would be required to be recognized immediately as a component of net periodic postretirement benefit cost in 20X1. ##### [715-60-55-25](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-25) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:badba776aab5c7e35b405aa1796b876b73aa2a277395435b2dbaa82348b20e37 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A gain that would be recognized immediately as a component of net periodic postretirement benefit cost in accordance with paragraphs [715-60-35-34 through 35-35](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-34) would occur if participants voluntarily agreed to bear a one-time higher share of costs for a past or current period. For example, if retirees agreed to make a contribution to the plan in one year that is larger than the contribution amount called for by the plan and future contributions would comply with the existing terms of the plan, the employer would recognize immediately as a component of net periodic postretirement benefit cost a one-time gain for the excess of the new retiree contribution amount over the old retiree contribution amount. ##### [715-60-55-26](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-26) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:c6df24c2e7129c8ab24f08564b8ec3ea98df4ac78a4efcbd719f3fb830c355e7 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If a trust arrangement explicitly provides that segregated assets are available to satisfy claims of creditors in bankruptcy, such a provision would effectively permit those assets to be used for other purposes at the discretion of the employer. It is not necessary to determine that a trust is bankruptcy-proof for the assets of the trust to qualify as [plan assets](https://asc.understandingaccounting.org/glossary/p/#plan-assets "Assets—usually stocks, bonds, and other investments (except certain insurance contracts as noted in paragraph 715-60-35-109)—that have been segregated and restricted (usually in a trust) to be used for a health and welfare plan (which can include active, terminated, and retired employees or their dependents or beneficiaries). The amount of plan assets includes amounts contributed by the employer, and by plan participants for a contributory plan, and amounts earned from investing the contributions, less benefits, income taxes, and other expenses incurred. 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. Securities of the employer held by the plan are includable in plan assets provided they are transferable. 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 the employer may intend that those assets be used to provide health and welfare benefits, which may include postretirement benefits. Those assets shall be accounted for in the same manner as other employer assets of a similar nature and with similar restrictions. If a plan has liabilities other than for benefits, those nonbenefit obligations are considered as reductions of plan assets. Amounts accrued by the employer but not yet paid to the plan are not plan assets. If a trust arrangement explicitly provides that segregated assets are available to satisfy claims of creditors in bankruptcy, such a provision would effectively permit those assets to be used for other purposes at the discretion of the employer. It is not necessary to determine that a trust is bankruptcy-proof for the assets of the trust to qualify as plan assets. However, assets held in a trust that explicitly provides that such assets are available to the general creditors of the employer in the event of the employer's bankruptcy would not qualify as plan assets.") under this Subtopic. Assets held in a trust that explicitly provides that such assets are available to the general creditors of the employer in the event of the employer's bankruptcy would not qualify as plan assets under this Subtopic. ##### [715-60-55-27](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-27) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:5cdbf2f937420af149a64f5fdbe31418eb3a662777d004ba80063af3f5a1109d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An employer may not include in plan assets the assets of a rabbi trust. The assets of a rabbi trust do not qualify as plan assets because they are explicitly available to the employer's creditors in the event of bankruptcy. ##### [715-60-55-28](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-28) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:6a390d75f739d7151f5edd747d12857732fd059dc03911624c96bab1c5f93fc1 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An employer that issues its own debt or equity securities directly to its postretirement benefit trust may include those securities as plan assets under this Subtopic provided the securities are currently transferable. To be transferable the securities held by the postretirement benefit trust must be legally and unconditionally transferable to unrelated third parties at any time, for any reason, and without economic penalties. Thus, the trustee of the postretirement benefit trust must have the unilateral right and ability to legally and unconditionally sell, transfer, or otherwise dispose of the securities. Securities that are not transferable in their present state do not meet the transferability requirement even though they can be converted into securities that are transferable or can otherwise be made transferable through other means, such as through future registration of the securities for trading in a public market. For example, if an employer issues to its postretirement benefit trust nontransferable convertible preferred stock that can be converted into transferable common stock of the employer, the convertible preferred stock would not meet the criterion of currently transferable and, thus, would not be included in plan assets. ##### [715-60-55-29](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-29) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:5b4a1adbede93349d1016f3647727b87a822fd14c0487c9d104b9b57b66ff5ad Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An employer has two legally separate postretirement benefit plans. Both plans are unfunded defined benefit plans covering the same employees. One plan provides postretirement medical care and the other provides postretirement dental care. An employer that has two or more such plans is permitted, but not required, to account for those plans as a single plan. The last sentence of paragraph [715-60-35-130](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-130) reinforces the criterion that the plans must be unfunded. ##### [715-60-55-30](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-30) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:7df12a29686faee6b9e5a2db2079aa1c901a704d4336d92ef83478189a44f8cf Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. It would be appropriate for the employer in the preceding paragraph to change from one-plan accounting to two-plan accounting; that is, to accounting for each plan separately if the conditions of paragraph [715-60-35-130](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-130) are no longer satisfied. If the change is elective (that is, it is made even though the conditions of that paragraph are still satisfied), the employer would have to demonstrate the preferability of the change in accounting to satisfy the requirements of Subtopic 250-10, and its effects would be accounted for in accordance with that Subtopic. ##### [715-60-55-31](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-31) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:784e8c430a588877f6e52375cdcd0287f6ca68650c412431e75bc25d156b4307 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph not used](https://asc.understandingaccounting.org/updates/page-1833002/). ##### [715-60-55-32](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-32) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:a5b2b6b0fd009e04a5fc2356bff9534fc0bb492e5b5f399a47b4b460c683fb8d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Any assets of the defined contribution plan described in paragraph [715-70-55-3](https://asc.understandingaccounting.org/asc/715/70/#715-70-55-3) that have not yet been allocated to participants' individual accounts do not reduce the accumulated postretirement benefit obligation of the defined benefit plan. The terms of the defined benefit plan require the payment of benefits that exceed those payable using participants' individual account balances in the defined contribution plan. Pursuant to those terms, assets of a defined contribution plan that have not yet been allocated to participants' individual accounts do not reduce the employer's present obligation under the defined benefit plan. ##### [715-60-55-33](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-33) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:fe290f69620b1877a3cd2e708d252cc0c03fda7da0518d2383b804c1ed543684 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Although an employer's intent may be to allocate the unallocated assets in the future so that participants can use those assets to pay health care costs, that intent is insufficient to offset the present defined benefit plan obligation. When the unallocated assets in the defined contribution plan are allocated, the benefits payable under that plan are increased and the obligation of the defined benefit plan is reduced. That reduction is recognized immediately in determining the net periodic postretirement benefit cost for the defined benefit plan. ##### [715-60-55-34](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-34) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:74e4b5382ed8e02e803958ea22aa69b208e8102e65cbdf956add22f6712d612e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Because the two plans are legally separate and, thus, the assets of one plan are not available to pay the benefits of the other, neither the allocated nor the unallocated assets of the defined contribution plan would be considered plan assets of the defined benefit plan. ##### [715-60-55-35](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-35) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:33404723887d867b8d4fc0f21cee6292efc2e7fb483ebf0f3cfee82d439c9ff4 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following illustrates the notion of the expected postretirement benefit obligation and the relationship between that obligation and the accumulated postretirement benefit obligation at various dates. ##### [715-60-55-36](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-36) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:96cec99e7b1647368b4385f893dc4fe15f7b34f1850b09c3e3e8ec0bd811fce5 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Entity A's plan provides postretirement health care benefits to all employees who render at least 10 years of service and attain age 55 while in service. A 50-year-old employee, hired January 1, 20X3, at age 30 and eligible for benefits upon attaining age 55, is expected to terminate employment at age 62 and is expected to live to age 77. A discount rate of 8 percent is assumed. ##### [715-60-55-37](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-37) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:b07952873488acfba85ab0b5115e77935469603eb4bc22c984e12378a35df0d7 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. At December 31, 20Z2, Entity A estimates the expected amount and timing of benefit payments for that employee as follows. - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-8FF7F2B2-380C-4BD7-91E4-79A1115394D6-low.gif) Expected Future Claims Present Value at Age Age 50 53 55 63 " $2,796 " " $1,028 " " $1,295 " " $1,511 " 64 " 3,093 " " 1,052 " " 1,326 " " 1,547 " 65 856 270 339 396 66 947 276 348 406 67 " 1,051 " 284 357 417 68 " 1,161 " 291 366 427 69 " 1,282 " 297 374 436 70 " 1,425 " 306 385 449 71 " 1,577 " 313 394 460 72 " 1,744 " 321 404 471 73 " 1,934 " 329 415 484 74 " 2,137 " 337 424 495 75 " 2,367 " 346 435 508 76 " 2,620 " 354 446 520 77 " 3,899 " 488 615 717 " $28,889 " " $6,292 " " $7,923 " " $9,244 " ##### [715-60-55-38](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-38) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:7c2ccd6c0fcfb6307881c961d0652114392ee8783b8ab563d2fbba2d624cfb74 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The expected and accumulated postretirement benefit obligations at December 31, 20Z2 (age 50) are $6,292 and $5,034 (20/25 of $6,292), respectively. An equal amount of the expected postretirement benefit obligation is attributed to each year of service from the employee's date of hire to the employee's full eligibility date (age 55) (see paragraphs [715-60-35-62 through 35-66](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-62) ). Therefore, when the employee is age 50, the accumulated postretirement benefit obligation is measured as 20/25 of the expected postretirement benefit obligation, as the employee has rendered 20 years of the 25-year credited service period. See paragraphs [715-60-55-40 through 55-56](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-40) for additional guidance on the full eligibility date and paragraphs [715-60-55-57 through 55-59](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-57) for additional guidance on attribution. ##### [715-60-55-39](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-39) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:d7df911cb3a39d4db9b1769b642438fe2d7ec2b2e7c3e2538fdba078a24531cc Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Assuming no changes in health care costs or other circumstances, the accumulated postretirement benefit obligation at December 31, 20Z5 (age 53), is $7,289 (23/25 of $7,923). At the end of the employee's 25th year of service and thereafter, the expected postretirement benefit obligation and the accumulated postretirement benefit obligation are equal. In this Example, at December 31, 20Z7, when the employee is 55 and fully eligible for benefits, the accumulated and expected postretirement benefit obligations are $9,244. At the end of the 26th year of service (December 31, 20Z8) when the employee is 56, those obligations are $9,984 ($9,244 plus interest at 8 percent for 1 year). ##### [715-60-55-40](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-40) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:7e54779cc22ebd15ef511245addc24718497c59e53f55f227e0beb40cd0657c5 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Paragraphs [715-60-55-41 through 55-56](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-41) are presented to assist in understanding the [full eligibility date](https://asc.understandingaccounting.org/glossary/f/#full-eligibility-date "The date at which an employee has rendered all of the service necessary to have earned the right to receive all of the benefits expected to be received by that employee (including any beneficiaries and dependents expected to receive benefits). Determination of the full eligibility date is affected by plan terms that provide incremental benefits expected to be received by or on behalf of an employee for additional years of service, unless those incremental benefits are trivial. Determination of the full eligibility date is not affected by plan terms that define when benefit payments commence or by an employee's current marital or dependency status."). ##### [715-60-55-41](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-41) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:1b33a836c13e56dcd052a77048b78035740bbc0ea7d779fbbe6a0dba5b7eddcb Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Some plans have benefit formulas that define different benefits for different years of service. ##### [715-60-55-42](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-42) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:519b49e16b5c5e2ab5352a40df419911eb09896cbd1c79adcaaf530ec7e1869a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. To illustrate, assume a plan in which the percentage of postretirement health care coverage to be provided by an employer is defined by groups of years of service. The plan provides 20 percent postretirement health care coverage for 10 years of service after age 35, 50 percent for 20 years of service after age 35, 70 percent for 25 years of service after age 35, and 100 percent for 30 years of service after age 35. The full eligibility date for an employee who was hired at age 35 and is expected to retire at age 62 is at age 60. At that date the employee has rendered 25 years of service after age 35 and is eligible to receive a benefit of 70 percent health care coverage after retirement. The employee receives no additional benefits for the last two years of service. ##### [715-60-55-43](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-43) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:ebc06dc729991a825d82429a903211f0f3534d68ced445522b8c6e11e0a47541 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Some plans may base the amount of benefits or level of benefit coverage on employees' compensation, for example, as a percentage of their final pay. To the extent the plan's postretirement benefit formula defines benefits wholly or partially as a function of future compensation (that is, the plan provides incremental benefits for additional years of service when it is assumed that final pay will increase), determination of the full eligibility date or an employee is affected by those additional years of service the employee is expected to render. ##### [715-60-55-44](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-44) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:c275b15e8756423c23a95b0c6d97a0fe1f1e860eebc08ecebe36d4d4b7bc6971 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In addition, measurements of the postretirement benefit obligation and service cost reflect the best estimate of employees' future compensation levels (see paragraphs [715-60-35-88 through 35-89](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-88) ). ##### [715-60-55-45](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-45) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:475d8677653b5fd6c7a4714a0c370c6e8a504285c1b91eb0f73aae596789c641 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For example, assume a plan provides life insurance benefits to employees who render 20 years of service and attain age 55 while in service; the benefit is equal to 20 percent of final pay. A 55-year-old employee, who currently earns a salary of $90,000, has worked 22 years for the entity. The employee is expected to retire at age 60 and is expected to be earning $120,000 at that time. The employee is eligible for life insurance coverage under the plan at age 55, when the employee has met the age and service requirements. However, because the employee's salary continues to increase each year, the employee is not fully eligible for benefits until age 60 when the employee retires because the employee earns an incremental benefit for each additional year of service beyond age 55. That is, the employee earns an additional benefit equal to 20 percent of the increase in salary each year from age 55 to retirement at age 60 for service during each of those years. ##### [715-60-55-46](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-46) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:8bf041d00a88f2c11a68d385f6c70a2b72f01dd366c5b2bfa6e01b30117e6c01 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Some postretirement benefit plans provide spousal or dependent coverage or both if the employee works a specified number of years beyond the date at which the employee attains eligibility for single coverage. ##### [715-60-55-47](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-47) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:d7ee0b80f4e91b2afe74e45674bf940bf05f56f251e1b3cf77355dd57863f634 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For example, a postretirement health care plan provides single coverage to employees who work 10 years and attain age 50 while in service; the plan provides coverage for dependents if the employee works 20 years and attains age 60 while in service. Because the additional 10 years of service may provide an incremental benefit to employees, for employees expected to satisfy the age and service requirements and to have covered dependents during the period following the employee's retirement, their full eligibility date is the date at which they have both rendered 20 years of service and attained age 60 while in service. For employees not expected to have covered dependents after their retirement or who are not expected to render at least 20 years of service or attain age 60 while in service, or both, their full eligibility date is the date at which they have both rendered 10 years of service and attained age 50 while in service. ##### [715-60-55-48](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-48) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:61de7afc59971838f96fe6ed9c1cfaad039f743076929f2c64286979ff49ec8c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Some postretirement benefit plans may have different eligibility requirements for different types of benefits. ##### [715-60-55-49](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-49) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:adb7e22b8d95f53a3e642ac6681b7444f288004e23a1baa172086c6d53bf7677 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For example, assume a plan provides a postretirement death benefit of $100,000 to employees who render 20 or more years of service. Fifty percent health care coverage is provided to eligible employees who render 10 years of service, 70 percent coverage to those who render 20 years of service, and 100 percent coverage to those who render 30 years of service. Employees are eligible for the health care and death benefits if they attain age 55 while in service. ##### [715-60-55-50](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-50) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:764eed9c12fcc583b9d8292f3006bc4a0cbc5108d94dc4f4769ceb20e04ba50b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The full eligibility date for an individual hired at age 30 and expected to terminate employment at age 62 is the date on which that employee has rendered 30 years of service and attained age 55 while in service (age 60 in this example). At that date the employee is eligible for all of the benefits expected to be paid to or on behalf of that employee under the postretirement benefit plan ($100,000 death benefits and 100 percent health care coverage). The full eligibility date for an employee hired at age 37 and expected to retire at age 62 is the date on which that employee has rendered 20 years of service and attained age 55 while in service (age 57 in this example). At that date the employee is eligible for all of the benefits expected to be paid to or on behalf of that employee under the postretirement benefit plan ($100,000 death benefits and 70 percent health care coverage). ##### [715-60-55-51](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-51) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:06a9cbcef1ab28c7001387c5f11d86b66deaf878cf361a3c5526adcd33df6f93 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Some postretirement benefit plans provide coverage for the spouse to whom an employee is married when the employee terminates service; that is, the marital status of an employee upon termination of employment determines whether single or spousal coverage is to be provided. ##### [715-60-55-52](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-52) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:609f193d6fbd5ab8e52da9017a98e75c873e88fcf90becb853f1bfb27366a905 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In measuring the expected postretirement benefit obligation, consideration is given to factors such as when benefit coverage will commence, who will receive benefits (employee and any covered dependents), and the expected need for and utilization of benefit coverage. ##### [715-60-55-53](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-53) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:88055428fbf9571150ad9aba32bc21961126f3b3466354b423fb89b1382def3c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For example, assume a plan provides postretirement health care coverage to employees who render at least 10 years of service and attain age 55 while in service; health care coverage also is provided to employees' spouses at the date of the employees' retirement. A 55-year-old employee is single, has worked for the entity for 30 years, and is expected to marry at age 59 and to retire at age 62. Although the employee is entitled to spousal coverage only if married at retirement, at age 55 the employee has earned the right to spousal coverage. The probability that the employee will be married when the employee retires is included in the actuarial [assumptions](https://asc.understandingaccounting.org/glossary/a/#assumptions "Estimates of the occurrence of future events affecting pension costs and other postretirement benefit costs (as applicable), such as turnover, retirement age, mortality, withdrawal, disablement, dependency status, per capita claims costs by age, health care cost trend rates, levels of Medicare and other health care providers' reimbursements, changes in compensation and national pension benefits, and discount rates to reflect the time value of money.") developed to measure the expected postretirement benefit obligation for that plan participant. The full eligibility date (age 55 in this example) is not affected by that measurement assumption. ##### [715-60-55-54](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-54) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:06a24b0172f04805d1e5642751c0b91bff5c87b2656b5f6993f6d385aa500c59 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Some plans provide postretirement benefits to disabled employees. ##### [715-60-55-55](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-55) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:8fa59a892355c10e2fccedfcdcfa4e1e8df547b5a4d9e25513e2651e8f621875 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For example, Entity B provides disability income and health care benefits to employees who become disabled while in service and have rendered 10 or more years of service. Retiree health care benefits are provided to employees who render 20 or more years of service and attain age 55 while in service. Employees receiving disability benefits continue to accrue credit toward their eligibility for retiree health care benefits. Under this plan, an employee hired at age 25, who becomes permanently disabled at age 40, is entitled to receive retiree health care benefits commencing at age 55 (in addition to any disability income benefits commencing at age 40) because that employee worked for Entity B for more than 10 years before becoming disabled. Under the terms of the plan the employee is given credit for working to age 55 even though no actual service is rendered by the employee after the disabling event occurs. ##### [715-60-55-56](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-56) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:cdfc7700f31562b56bafe6112b90ab0738986855bf4530de2275588e04858799 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Because the employee is permanently disabled, the full eligibility date is accelerated to recognize the shorter period of service required to be rendered in exchange for the retiree health care benefits—in this case the full eligibility date is age 40, the date of the disabling event. For a similar employee who is temporarily disabled at age 40 but returns to work and attains age 55 while in service, the full eligibility date is age 55. Entity B's expected postretirement benefit health care obligation for the permanently disabled employee is based on the employee's expected health care costs commencing at age 55 and is attributed ratably to that employee's active service to age 40. ##### [715-60-55-56A](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-56A) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:2e5eeef4c137a9af17e9cdad710420d6407e7de7cf567eb9169638618b64812a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following illustrates the guidance in paragraphs [715-60-35-61 through 35-70](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-61) related to attribution. ##### [715-60-55-57](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-57) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:63c089123bdcb905c71e5c439a551bb1bd067c198b4bcb21bdf504b1a5dc2f40 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A plan that provides benefit coverage to employees who render 30 or more years of service or who render at least 10 years of service and attain age 55 while in service, without specifying when the credited service period begins, the expected postretirement benefit obligation is attributed to service from the date of hire to the earlier of the date at which a plan participant has rendered 30 years of service or has rendered 10 years of service and attained age 55 while in service. However, for a plan that provides benefit coverage to employees who render at least 20 years of service after age 35, the expected postretirement benefit obligation is attributed to a plan participant's first 20 years of service after attaining age 35 or after the date of hire, if later than age 35. ##### [715-60-55-58](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-58) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:c104935e62d58f5bb3b8cb1a27cce57eefaa437979199998b3255f963b3c6746 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A plan with a benefit formula that defines 100 percent benefit coverage for service for the year in which employees attain age 60 has a 1-year credited service period. If plan participants are expected to have rendered an average of 20 years of service at age 60, the credited service period is nominal in relation to their total years of service before their full eligibility dates. In that case, the service cost is recognized from date of hire to age 60. ##### [715-60-55-59](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-59) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:e93fa18908dd316c9839ace6ea455485c86337b2273591634aa5be0d0d9674aa Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An example of a frontloaded plan is a life insurance plan that provides postretirement death benefits of $250,000 for 10 years of service after age 45 and $5,000 of additional death benefits for each year of service thereafter up to age 65 (maximum benefit of $300,000). For plans that frontload the benefit, the expected postretirement benefit obligation is attributed to employee service in accordance with the plan's benefit formula (see paragraph [715-60-35-62](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-62)). In this example, the actuarial present value of a $25,000 death benefit is attributed to each of the first 10 years of service after age 45, and the actuarial present value of an additional $5,000 death benefit is attributed to each year of service thereafter up to age 65. #### Illustrations ##### [715-60-55-60](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-60) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:dffd5dd613a87dcf8327903c1f4cc99c613256f9b6416ed21f8d2c97bc1d1ecc Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Throughout these Examples the accumulated postretirement benefit obligation and service cost are assumed as inputs rather than calculated based on some underlying population. For simplicity, benefit payments are assumed to be made at the end of the year, service cost is assumed to include interest on the portion of the expected postretirement benefit obligation attributed to the current year, and interest cost is based on the accumulated postretirement benefit obligation as of the beginning of the year. For unfunded plans, benefits are assumed to be paid directly by the employer and are reflected as a reduction in the liability for postretirement benefits. In many of the cases, application of the underlying concepts has been simplified by focusing on a single employee for purposes of illustration. In practice, the determination of the full eligibility date and the measurement of postretirement benefit cost and obligation are based on employee groups and consider various possible retirement dates and the probabilities associated with retirement at each of those dates. ##### [715-60-55-61](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-61) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:04fa181c3cd5760985c6a3033efb2b1a7d145c2d50fbacfe01625325a7c683f3 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following Cases illustrate how events that change the accumulated postretirement benefit obligation are reflected in net periodic postretirement benefit cost and other comprehensive income: 1. a Employer accrual of net periodic postretirement benefit cost (Case A) 2. b Plan amendment that increases benefits (Case B) 3. c Negative plan amendments (Case C) 4. d Change in assumptions (Case D). ##### [715-60-55-62](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-62) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:9288c6ddf2af3c77b1ad17d982d9dd233ba9ab1047a641f125fef5483a2b34c4 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The tables in each Case illustrate the effect of changes in assumptions or changes in the plan on measurement of the accumulated postretirement benefit obligation. In each Case, it is assumed that the plan is unfunded. ##### [715-60-55-63](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-63) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:66aa6df3affe1414774e57c18ce047467655d7b04c80b8933f6aa7175e6df9df Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In this Case, benefit payments of $42,000 are made at the end of 20X3. Net periodic postretirement benefit cost and other comprehensive income for 20X3, and changes in the postretirement benefit liability, and accumulated other comprehensive income for 20X3 are summarized as follows. - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-09D8A089-E17B-4E4E-893B-28B5A5185ABA-low.gif) Net Periodic Postretirement Benefit Cost Other Comprehensive Income Postretirement Benefit Liability Transition Obligation Remaining in Accumulated Other Comprehensive Income Beginning of year " $(600,000)" " $400,000 " Recognition of components of net periodic postretirement benefit cost: Service cost " $32,000 " " (32,000)" Interest cost (a) " 48,000 " " (48,000)" Amortization of transition obligation (b) " 30,000 " " $(30,000)" " (30,000)" Total net periodic postretirement benefit cost " $110,000 " Total other comprehensive income " $(30,000)" Benefit payments " 42,000 " Net change " (38,000)" " (30,000)" End of year " $(638,000)" " $370,000 " (a) Assumed discount rate of 8% applied to the accumulated postretirement benefit obligation at the beginning of the year. (b) "The transition obligation of $400,000 is amortized on a straight-line basis over the remaining amortization period of approximately 13 years." ##### [715-60-55-64](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-64) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:1bd5479c271543d951a9a660da506cc0e12957edc9ddf2216f091d73e35fcb24 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In this Case, the plan is amended on January 2, 20X4, resulting in a $90,000 increase in the accumulated postretirement benefit obligation. ##### [715-60-55-65](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-65) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:1c72a0831cea11c1b96089770cd6e285de6ca7640ddded220880a86ac056feb2 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Benefit payments of $39,000 are made at the end of 20X4. Net periodic postretirement benefit cost and other comprehensive income for 20X4, and changes in the postretirement benefit liability and accumulated other comprehensive income for 20X4 are summarized as follows. - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-A7C548D4-AC5A-4EA4-B3A2-0B14685B7623-low.gif) Amounts Remaining in Accumulated Other Comprehensive Income Net Periodic Postretirement Benefit Cost Other Comprehensive Income Postretirement Benefit Liability Transition Obligation Prior Service Cost Beginning of year " $(638,000)" " $370,000 " $- Plan amendment " $90,000 " " (90,000)" " 90,000 " Recognition of components of net periodic postretirement cost: Service cost " $30,000 " " (30,000)" Interest cost (a) " 58,240 " " (58,240)" Amortization of transition obligation " 30,000 " " (30,000)" " (30,000)" Amortization of prior service cost (b) " 9,000 " " (9,000)" " (9,000)" Total net periodic postretirement benefit cost " $127,240 " Total other comprehensive income " $51,000 " Benefit payments " 39,000 " Net change " (139,240)" " (30,000)" " 81,000 " End of year " $(777,240)" " $340,000 " " $81,000 " (a) "Assumed discount rate of 8% applied to the accumulated postretirement benefit obligation at the beginning of the year and to the increase in that obligation for the prior service cost initially recognized in other comprehensive income at the date of the plan amendment \[($638,000 x 8%) + ($90,000 x 8%)\]." (b) "As permitted by paragraph 715-60-35-18, prior service cost of $90,000 is amortized in net periodic postretirement benefit cost on a straight-line basis over the average remaining years of service to full eligibility for benefits of the active plan participants (10 years in this Case)." ##### [715-60-55-66](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-66) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:7fef609f23c28a2d64dd804c1bf7ae60db9ccec6f3c6c3933a72ee1d1bb70f8e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In this Case, the plan is amended on January 4, 20X5, resulting in a $99,000 reduction in the accumulated postretirement benefit obligation. ##### [715-60-55-67](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-67) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:bd472ad6977316696b04e8e197a055f485b71dd8ce9de6f529e4fb794dd35061 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Benefit payments in 20X5 are $40,000. Net periodic postretirement benefit cost and other comprehensive income for 20X5, and the changes in the postretirement benefit liability and accumulated other comprehensive income for 20X5 are summarized as follows. - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-0710E829-D8B3-4482-8645-7AED5D8D4CA6-low.gif) Amounts Remaining in Accumulated Other Comprehensive Income Net Periodic Postretirement Benefit Cost Other Comprehensive Income Postretirement Benefit Liability Transition Obligation Prior Service Cost Beginning of year " $(777,240)" " $340,000 " " $81,000 " Plan amendment (a) " $(99,000)" " 99,000 " " (18,000)" " (81,000)" Recognition of components of net periodic postretirement benefit cost: Service cost " $30,000 " " (30,000)" Interest cost (a) " 54,259 " " (54,259)" Amortization of transition obligation (b) " 29,000 " " (29,000)" " (29,000)" Amortization of prior service cost - - - Total net periodic postretirement benefit cost " $113,259 " Total other comprehensive income " $(128,000)" Benefit payments " 40,000 " Net change " 54,741 " " (47,000)" " (81,000)" End of year " $(722,499)" " $293,000 " $- (a) "Assumed discount rate of 8% applied to the accumulated postretirement benefit obligation at the beginning of the year and to the decrease in that obligation at the date of the plan amendment \[($777,240 x 8%) - ($99,000 x 8%)\]." (b) "Transition obligation remaining in accumulated other comprehensive income of $322,000 ($340,000 - $18,000) is amortized on a straight-line basis over the remaining transition period of approximately 11 years." ##### [715-60-55-68](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-68) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:428f5d043ebf0da1a9d1a260a0303e302ded7e147e4effe783cfa69818751b50 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In this Case, the assumed health care cost trend rates are changed at December 31, 20X5, resulting in a $55,000 increase in the accumulated postretirement benefit obligation. ##### [715-60-55-69](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-69) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:b1b4f8ac4626eeb181211a27dc8bd01c1afa129a8a2cb449a738d3656cb26554 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The net loss that results from a change in the health care cost trend rates assumption is reflected immediately in the postretirement benefit liability. - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-0F7A149B-5313-49BF-B26A-7EA1E7BFA15A-low.gif) Before Change Loss Recognized in other Comprehensive Income After Change Accumulated postretirement benefit obligation " $(722,499)" " $(55,000)" " $(777,499)" Plan assets at fair value - - Funded status and recognized liability " $(722,499)" " $(55,000)" " $(777,499)" Accumulated other comprehensive income: Net loss $- " $55,000 " " $55,000 " Transition obligation " 293,000 " " 293,000 " " $293,000 " " $55,000 " " $348,000 " ##### [715-60-55-70](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-70) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:7d8b33af00994cb2fafe4dd4a83b9977a13790b08ddf4de8c6f2829eeaa94b10 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See Example 4 (paragraphs [715-60-55-96 through 55-102](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-96) ). ##### [715-60-55-71](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-71) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:345325a1c17cd969bde1034b37b33b473a945b676ddab1850045f4ec0ca0c642 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Entity H has a postretirement benefit plan that provides benefits to employees who render at least 20 years of service after age 35. On January 2, 20X4, Entity H amends its postretirement benefit plan to increase the lifetime cap on benefits provided, resulting in prior service cost of $750,000 that is initially recognized in other comprehensive income (the increase in the accumulated postretirement benefit obligation as a result of the plan amendment). Cases A and B illustrate the [amortization](https://asc.understandingaccounting.org/glossary/a/#amortization "The process of reducing a recognized liability systematically by recognizing gains or by reducing a recognized asset systematically by recognizing losses. In accounting for pension benefits or other postretirement benefits, amortization also means the systematic recognition in net periodic pension cost or other postretirement benefit cost over several periods of amounts previously recognized in other comprehensive income, that is, gains or losses, prior service cost or credits, and any transition obligation or asset.") of prior service cost included in accumulated other comprehensive income. ##### [715-60-55-72](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-72) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:2ab6fe256da46de1a0c8676613d842279a2251fa3866bc52cdc92da4c99184c5 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. At the date of the amendment (January 2, 20X4), Entity H has 165 employees of whom 15 are fully eligible for benefits, 10 are under age 35, and 40 are expected to terminate before becoming eligible for any benefits. Because the 10 employees under age 35 have not met the age requirements to participate in the plan (only service after age 35 is credited) and 40 employees are not expected to receive benefits under the plan, those 50 employees are not considered to be plan participants and, therefore, are excluded from the calculation. The 15 fully eligible plan participants also are excluded from the calculation because they do not have to render any additional service to earn the added benefits. The remaining 100 employees have not yet earned the full amount of the benefits they are expected to earn under the plan. Those employees are expected to become fully eligible for those benefits over the next 20 years. Their remaining years of service to full eligibility for benefits is the basis for amortization of the prior service cost. ##### [715-60-55-73](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-73) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:db1cd4fa0ead4cfac456f3ed46cc220e24d59804bc1b8c752e37c7c32624e3d3 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Employees hired after the date of the plan amendment or who attain age 35 after the date of the plan amendment do not affect the amortization nor do revised estimates of remaining years of service, except those due to a curtailment. ##### [715-60-55-74](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-74) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:c0de66d6972f1061e65c0bbc4a3d8918d25ee51c7742c0b4d36985324ad286b2 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Schedule 1—Determination of Expected Remaining Years of Service Prior to Full Eligibility as of January 2, 20X4 - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-72C96605-9B69-4E3F-88DE-0EC744F37F0E-low.gif) Year Indiv. Remaining Years of Service Prior to Full Elig. 20X4 20X5 20X6 20X7 20X8 20X9 20Y0 20Y1 20Y2 20Y3 20Y4 20Y5 20Y6 20Y7 20Y8 20Y9 20Z0 20Z1 20Z2 20Z3 Total Remaining Years of Service Prior to Full Elig. A1-A4 1 4 4 B1-B6 2 6 6 12 C1-C5 3 5 5 5 15 D1-D5 4 5 5 5 5 20 E1-E7 5 7 7 7 7 7 35 F1-F5 6 5 5 5 5 5 5 30 G1-G9 7 9 9 9 9 9 9 9 63 H1-H7 8 7 7 7 7 7 7 7 7 56 I1-I5 9 5 5 5 5 5 5 5 5 5 45 J1-J5 10 5 5 5 5 5 5 5 5 5 5 50 K1-K4 11 4 4 4 4 4 4 4 4 4 4 4 44 L1-L8 12 8 8 8 8 8 8 8 8 8 8 8 8 96 M1-M8 13 8 8 8 8 8 8 8 8 8 8 8 8 8 104 N1-N5 14 5 5 5 5 5 5 5 5 5 5 5 5 5 5 70 O1-O4 15 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 60 P1-P3 16 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 48 Q1-Q4 17 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 68 R1-R3 18 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 54 S1-S2 19 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 38 T1 20 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 20 Service Years Rendered 100 96 90 85 80 73 68 59 52 47 42 38 30 22 17 13 10 6 3 1 932 Amortization Fraction 100 96 90 85 80 73 68 59 52 47 42 38 30 22 17 13 10 6 3 1 932 932 932 932 932 932 932 932 932 932 932 932 932 932 932 932 932 932 932 932 ##### [715-60-55-75](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-75) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:077d36832127e2136c541cb2d7ce85e0a47ada0335f31d5396dbd601617d3196 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For example, in 20X4, individuals A1-A4 meet the entity's age and service requirements for full eligibility for the benefits they are expected to receive under the plan. Although it may be expected that those employees will work beyond 20X4, benefits are not attributed to years of service beyond their full eligibility date. See Case B for less complex amortization approaches. ##### [715-60-55-76](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-76) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:072b812950f6b2a044b524b85b8e09ba42250f5ac55deaa778c5b7b9d3e2ded3 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Schedule 2—Amortization of Prior Service Cost - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-330AE204-D15B-451D-A5C5-D0D7BBD4A21C-low.gif) Year Beginning-of-Year Balance Amortization Rate Amortization End-of-Year Balance 20X4 " $750,000 " 100/932 " $80,472 " " $669,528 " 20X5 " 669,528 " 96/932 " 77,253 " " 592,275 " 20X6 " 592,275 " 90/932 " 72,425 " " 519,850 " 20X7 " 519,850 " 85/932 " 68,401 " " 451,449 " 20X8 " 451,449 " 80/932 " 64,378 " " 387,071 " 20X9 " 387,071 " 73/932 " 58,745 " " 328,326 " 20Y0 " 328,326 " 68/932 " 54,721 " " 273,605 " 20Y1 " 273,605 " 59/932 " 47,479 " " 226,126 " 20Y2 " 226,126 " 52/932 " 41,845 " " 184,281 " 20Y3 " 184,281 " 47/932 " 37,822 " " 146,459 " 20Y4 " 146,459 " 42/932 " 33,798 " " 112,661 " 20Y5 " 112,661 " 38/932 " 30,579 " " 82,082 " 20Y6 " 82,082 " 30/932 " 24,142 " " 57,940 " 20Y7 " 57,940 " 22/932 " 17,704 " " 40,236 " 20Y8 " 40,236 " 17/932 " 13,680 " " 26,556 " 20Y9 " 26,556 " 13/932 " 10,461 " " 16,095 " 20Z0 " 16,095 " 10/932 " 8,047 " " 8,048 " 20Z1 " 8,048 " 6/932 " 4,828 " " 3,220 " 20Z2 " 3,220 " 3/932 " 2,414 " 806 20Z3 806 1/932 806 - ##### [715-60-55-77](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-77) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:737a1291c4675c3dfd7e00f075a2a7cbe9f2e4c29366b1774d7c7bbd9ee0b7e5 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. To reduce the complexity and detail of the computations shown in Case A, alternative amortization approaches that more rapidly reduce prior service cost previously recognized in other comprehensive income may be applied if used consistently (see paragraph [715-60-35-18](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-18)). For example, if Entity H (in Case A) elects to use straight-line amortization of prior service cost over the average remaining years of service before full eligibility for benefits of the [active plan participants](https://asc.understandingaccounting.org/glossary/a/#active-plan-participant "Any active employee who has rendered service during the credited service period and is expected to receive benefits, including benefits to or for any beneficiaries and covered dependents, under the postretirement benefit plan. See Plan Participant.") (932 future service years/100 employees = 9.32 years), the amortization would be as follows. - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-6D168134-82D0-4712-90C8-B99D97EEF5DF-low.gif) Year Beginning-of- Year Balance Amortization End-of-Year Balance 20X4 " $750,000 " " $80,472 " (a) " $669,528 " 20X5 " 669,528 " " 80,472 " " 589,056 " 20X6 " 589,056 " " 80,472 " " 508,584 " 20X7 " 508,584 " " 80,472 " " 428,112 " 20X8 " 428,112 " " 80,472 " " 347,640 " 20X9 " 347,640 " " 80,472 " " 267,168 " 20Y0 " 267,168 " " 80,472 " " 186,696 " 20Y1 " 186,696 " " 80,472 " " 106,224 " 20Y2 " 106,224 " " 80,472 " " 25,752 " 20Y3 " 25,752 " " 25,752 " - (a) "$750,000 ÷ 9.32 years = $80,472." ##### [715-60-55-78](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-78) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:cb155c65ced648f7ed9130bfbe810fef43f53331726d4fb0e9a53d2fc09b3b1b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Note: Under this approach, the first year's amortization is the same as the first year's amortization under the weighted remaining years of service method illustrated in Case A (see paragraph [715-60-55-76](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-76)). Thereafter, the amortization pattern will differ. ##### [715-60-55-79](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-79) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:132add90a7183302d6b4b528f6200677f14c2a2e0b5495f61942bb30a06c62da Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following Cases demonstrate the effects of gains and losses in accounting for postretirement benefits for Entity I from 20X3 to 20X5: 1. a The accounting for a loss resulting from changes in assumptions in measuring the accumulated postretirement benefit obligation (Case A). 2. b The effect of a gain when the return on plan assets exceeds projections (Case B). 3. c The accounting in a year in which both gains and losses are experienced (Case C). ##### [715-60-55-80](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-80) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:c7164b866a054a1caa15a3e885db2a343dae0fd1ca9cac3ce206d42ea50e99fd Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Entity I's plan is unfunded and the accumulated postretirement benefit obligation is $6,000,000 at the beginning of 20X3. There is also a $2,000,000 transition obligation remaining in accumulated other comprehensive income at that date. Beginning in 20X3, and unless otherwise noted, the entity decides to fund at the end of each year an amount equal to the benefits paid that year plus the service cost and interest cost for that year. ##### [715-60-55-81](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-81) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:44e1b4f416f2e5f090adccf04578a6a9ca3be61b3526968efee621ee8d5fa460 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For illustrative purposes, the following assumptions are used to project changes in the accumulated postretirement benefit obligation and plan assets during the period 20X3-20X5. - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-6EE69789-F27C-4E58-A5BE-68F194A2FEB2-low.gif) 20X3 20X4 20X5 Discount rate 9.5% 9.0% 9.0% Expected long-term rate of return on plan assets 10.0% 10.0% Average remaining years of service of active plan participants 12 12 12 ##### [715-60-55-82](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-82) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:1a02601a78d6ccb04fc655b312d7969bdd2a9620acc3ff01dd7dde6c071e13cb Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Pursuant to paragraph [715-60-35-39](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-39), Entity I amortizes the transition obligation remaining in accumulated other comprehensive income over a 20-year period rather than the average remaining service period of active plan participants at the date of transition (12 years). Projected changes in net periodic postretirement benefit cost and other comprehensive income for 20X3 and changes in the postretirement benefit liability and accumulated other comprehensive income for 20X3 are summarized as follows. - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-E135C3F9-DC3A-41CE-97E7-D3A2FF4D13EB-low.gif) Net Periodic Postretirement Benefit Cost Other Comprehensive Income Postretirement Benefit Liability Transition Obligation Remaining in Accumulated Other Comprehensive Income Beginning of year 20X3 " $(6,000,000)" " $2,000,000 " Recognition of components of net periodic postretirement benefit cost: Service cost " $300,000 " " (300,000)" Interest cost " 570,000 " " (570,000)" Amortization of transition obligation " 300,000 " " $(300,000)" " (300,000)" Total net periodic postretirement benefit cost " $1,170,000 " Total other comprehensive income " $(300,000)" "Excess of assets contributed to plan over benefit payments ($1,500,000 - $630,000 = $870,000)" " 870,000 " Benefit payments from plan " 630,000 " Net change " 630,000 " " (300,000)" End of year 20X3—projected " $(5,370,000)" " $1,700,000 " ##### [715-60-55-83](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-83) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:3f04a48c5c066c44c0164853f36a0753d0462c2ec42df2c54807f49c4ec9665a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. When Entity I's plan assets and obligations are measured at December 31, 20X3, the accumulated postretirement benefit obligation is $760,000 greater than projected (a loss occurs) because the discount rate declined to 9 percent and for various other reasons not specifically identified. Entity I elects to amortize amounts in excess of the corridor over the average remaining service period of active plan participants. ##### [715-60-55-84](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-84) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:6e505f81118b45d8e896a51bfad52bbf4aba2dc8e560d5e36860869c7fcf43c5 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. As used herein, amounts in excess of the corridor refers to the portion of the net gain or loss remaining in accumulated other comprehensive income in excess of the greater of those defined amounts. ##### [715-60-55-85](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-85) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:0226e2ebde1d2eb674bde6c3568aea3d4b0f5b451c559ee88c1974f356728367 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The projected and actual postretirement benefit liability and accumulated other comprehensive income at December 31, 20X3, and the difference between those projected and actual amounts at that date follow. - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-71EDFF84-5325-4507-960E-8401D561C1E7-low.gif) Projected 12/31/X3 Loss Recognized in Other Comprehensive Income Actual 12/31/X3 Accumulated postretirement benefit obligation " $(6,240,000)" " $(760,000)" " $(7,000,000)" Plan assets at fair value " 870,000 " " 870,000 " Funded status and recognized liability " $(5,370,000)" " $(760,000)" " $(6,130,000)" Accumulated other comprehensive income: Net loss $- " $760,000 " " $760,000 " Transition obligation " 1,700,000 " " 1,700,000 " " $1,700,000 " " $760,000 " " $2,460,000 " ##### [715-60-55-86](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-86) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:62bf5c09dac2548e81bafa6a8cf36c70318c02bf0f1f655810a946cdce27ba58 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In addition to disclosures regarding changes in plan assets and benefit obligations required by paragraph [715-20-50-1(a) through 1(b)](https://asc.understandingaccounting.org/asc/715/20/#715-20-50-1), the 20X3 financial statements include the following disclosure of the components of net periodic postretirement benefit cost (as required by paragraph [715-20-50-1(h)](https://asc.understandingaccounting.org/asc/715/20/#715-20-50-1)). - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-F6808E76-8546-445D-AD8E-9B7E7AB41E11-low.gif) Service cost " $300,000 " Interest cost " 570,000 " Amortization of transition obligation " 300,000 " Net periodic postretirement benefit cost " $1,170,000 " The components of net periodic postretirement benefit cost other than the service cost component are included in the line item “other income/(expense)” in the income statement. ##### [715-60-55-87](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-87) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:2553b368ea8665518bd94b467905d4c78b6370df8386e5b5e97b48db4e3e6598 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Net periodic postretirement benefit cost and other comprehensive income for 20X4, and changes in the postretirement benefit liability and accumulated other comprehensive income are projected at the beginning of the year. That projection serves as the basis for interim accounting until a subsequent event occurs requiring remeasurement. The projection at the beginning of 20X4 follows. - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-43AB54CC-6BE9-47F1-A0EE-AC725DE525AE-low.gif) Net Periodic Postretirement Benefit Cost Other Comprehensive Income Postretirement Benefit Liability Amounts Remaining in Accumulated Other Comprehensive Income Transition Obligation Net Loss Beginning of year 20X4 " $(6,130,000)" " $1,700,000 " " $760,000 " Recognition of components of net periodic postretirement benefit cost: Service cost " $320,000 " " (320,000)" Interest cost " 630,000 " " (630,000)" Amortization of transition obligation " 300,000 " " $(300,000)" " (300,000)" Amortization of net loss (a) " 5,000 " " (5,000)" " (5,000)" Expected return on plan assets (b) " (87,000)" " 87,000 " "Total net periodic postretirement benefit cost" " $1,168,000 " Total other comprehensive income " $(305,000)" "Excess of assets contributed to plan over benefit payments ($1,650,000 - $700,000 = $950,000)" " 950,000 " Benefit payments from plan " 700,000 " Net change "787,000" " (300,000)" " (5,000)" End of year 20X4—projected " $(5,343,000)" " $1,400,000 " " $755,000 " (a) See Schedule 2 (paragraph 715-60-55-94) for computation. (b) See Schedule 1 (paragraph 715-60-55-93) for computation. ##### [715-60-55-88](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-88) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:9411cabff1357de0cda89ff871ee86465572f0b930e65055198fe3dc5b7f6317 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. When Entity I's plan assets and obligations are measured at December 31, 20X4, the fair value of the plan assets is $150,000 greater than expected (an experience gain) because market performance was better than the 10 percent return that was assumed. The projected and actual postretirement benefit liability and accumulated other comprehensive income at December 31, 20X4, and the difference between those projected and actual amounts at that date follow. - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-F7318070-6A3C-4A20-8079-AE8F4F8B2050-low.gif) Projected 12/31/X4 Gain Recognized in Other Comprehensive Income Actual 12/31/X4 Accumulated postretirement benefit obligation " $(7,250,000)" " $(7,250,000)" Plan assets at fair value " 1,907,000 " " $150,000 " (a) " 2,057,000 " Funded status and recognized liability " $(5,343,000)" " $150,000 " " $(5,193,000)" Accumulated other comprehensive income: Net (gain) or loss " $755,000 " " $(150,000)" " $605,000 " Transition obligation " 1,400,000 " " 1,400,000 " " $2,155,000 " " $(150,000)" " $2,005,000 " (a) See Schedule 1 (paragraph 715-60-55-93) for computation. ##### [715-60-55-89](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-89) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:e9960d8fba180c4027eb0469483999535b135b30f1db2c75df149ce5eb0021e7 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The 20X4 financial statements include the following disclosure of the components of net periodic postretirement benefit cost. - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-4A6E9A0B-D439-48D6-AD9D-E64E85302350-low.gif) Service cost " $320,000 " Interest cost " 630,000 " Expected return on plan assets " (87,000)" Amortization of transition obligation " 300,000 " Amortization of net actuarial loss " 5,000 " Net periodic postretirement benefit cost " $1,168,000 " The components of net periodic postretirement benefit cost other than the service cost component are included in the line item “other income/(expense)” in the income statement. ##### [715-60-55-90](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-90) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:c70a5555c4b4593c751d955c218732e2cc0ba58d1c55c69346d9aa9b439b36e8 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Projected changes in net periodic postretirement benefit cost and other comprehensive income for 20X5 and changes in the postretirement benefit liability and accumulated other comprehensive income for 20X5 are summarized as follows. - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-D69F520B-0193-4E5B-8A78-9832CB6EAD30-low.gif) Net Periodic Postretirement Benefit Cost Other Comprehensive Income Postretirement Benefit Liability Amounts Remaining in Accumulated Other Comprehensive Income Transition Obligation Net Loss Beginning of year 20X5 " $(5,193,000)" " $1,400,000 " " $605,000 " Recognition of components of net periodic postretirement benefit cost: Service cost " $360,000 " " (360,000)" Interest cost " 652,500 " " (652,500)" Amortization of transition obligation " 300,000 " " $(300,000)" " (300,000)" Amortization of net loss (a) Expected return on plan assets (b) " (193,700)" " 193,700 " Total net periodic postretirement benefit cost " $1,118,800 " Total other comprehensive income " $(300,000)" "Excess of plan assets contributed to plan over benefit payments ($1,912,500 - $900,000 = $1,012,500)" " 1,012,500 " Benefit payments from plan " 900,000 " Net change " 1,093,700 " " (300,000)" - End of year 20X5—projected " $(4,099,300)" " $1,100,000 " " $605,000 " (a) See Schedule 2 (paragraph 715-60-55-94) for computation. (b) See Schedule 1 (paragraph 715-60-55-93) for computation. ##### [715-60-55-91](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-91) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:4b0406bb9ebeb8b57fa7c6c64c5a0925b80466cd80f8d701ef51eb312793a4c8 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. When Entity I's plan assets and obligations are measured at December 31, 20X5, both an asset loss of $220,360 and a liability gain of $237,260 are determined. The projected and actual postretirement benefit liability and accumulated other comprehensive income at December 31, 20X5, and the difference between those projected and actual amounts at that date follow. - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-EE29D825-DF62-4B69-9A24-A78BA4FDF83D-low.gif) Projected 12/31/X5 Gain (Loss) Recognized in Other Comprehensive Income Actual 12/31/X5 Accumulated postretirement benefit obligation " $(7,362,500)" " $237,260 " " $(7,125,240)" Plan assets at fair value " 3,263,200 " " (220,360)" (a) " 3,042,840 " Funded status and recognized liability " $(4,099,300)" " $16,900 " " $(4,082,400)" Accumulated other comprehensive income: Net (gain) or loss " $605,000 " " $(16,900)" " $588,100 " Transition obligation " 1,100,000 " " 1,100,000 " " $1,705,000 " " $(16,900)" " $1,688,100 " (a) See Schedule 1 (paragraph 715-60-55-93) for computation. ##### [715-60-55-92](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-92) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:9107f67d178020c530314f9a2e91a1a2fb981b032cc56530234d3509924853bf Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The 20X5 financial statements include the following disclosure of the components of net periodic postretirement benefit cost. - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-F2B9678B-D98C-4362-AEF0-8A29AC1BD4F2-low.gif) Service cost " $360,000 " Interest cost " 652,500 " Expected return on plan assets " (193,700)" Amortization of transition obligation " 300,000 " Net periodic postretirement benefit cost " $1,118,800 " The components of net periodic postretirement benefit cost other than the service cost component are included in the line item “other income/(expense)” in the income statement. ##### [715-60-55-93](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-93) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:64e41e0416167d21106ed996d0a689c85af6ff070a44629d349d628e1af77bd3 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This schedule reflects the calculation of market-related value, the fair value of plan assets, the actual return on plan assets, and the deferred asset gain or loss for the year (the difference between actual and [expected return on plan assets](https://asc.understandingaccounting.org/glossary/e/#expected-return-on-plan-assets "An amount calculated as a basis for determining the extent of delayed recognition of the effects of changes in the fair value of plan assets. The expected return on plan assets is determined based on the expected long-term rate of return on plan assets and the market-related value of plan assets.") included in the net amortization and deferral component of net periodic postretirement benefit cost). - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-C09B5574-1F97-4073-879E-4069D6485E60-low.gif) 20X3 20X4 20X5 Expected long-term rate of return on plan assets 10.0% 10.0% "Beginning balance, market-related value (a)" $- " $870,000 " " $1,937,000 " Contributions to plan (end of year) " 1,500,000 " " 1,650,000 " " 1,912,500 " Benefits paid by plan " (630,000)" " (700,000)" " (900,000)" Expected return on plan assets " 87,000 " " 193,700 " " 870,000 " " 1,907,000 " " 3,143,200 " 20% of each of last 5 years' asset gains (losses) " 30,000 " " (14,072)" "Ending balance, market-related value" " $870,000 " " $1,937,000 " " $3,129,128 " "Beginning balance, fair value of plan assets" $- " $870,000 " " $2,057,000 " Contributions to plan " 1,500,000 " " 1,650,000 " " 1,912,500 " Benefits paid " (630,000)" " (700,000)" " (900,000)" Actual return (loss) on plan assets (b) - " 237,000 " " (26,660)" "Ending balance, fair value of plan assets" " $870,000 " " $2,057,000 " " $3,042,840 " Deferred asset gain (loss) for year (c) $- " $150,000 " " $(220,360)" Gain (loss) not included in ending balance market-related value (d) $- " $120,000 " " $(86,288)" (a) This Example uses an approach that adds in 20% of each of the last 5 years' gains or losses. (b) See Schedule 3 (paragraph 715-60-55-95) for computation. (c) (Actual return on plan assets) - (expected return on plan assets). (d) "(Ending balance, fair value of plan assets) - (ending balance, market-related value of plan assets)." ##### [715-60-55-94](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-94) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:84a421b7f009b98c9dbc8fe448d156be319f2da2cb9d1098e9852ed51e8da6ae Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following Schedule provides a way to calculate the minimum amortization of the net gain or loss included in accumulated other comprehensive income, to be included as a component of net periodic postretirement benefit cost. - ![](https://asc.understandingaccounting.org/asc-img/GUID-199FE02D-AC3E-4E3C-AC43-E2F47262AADD-low.gif) 20X3 20X4 20X5 10% of beginning balance of accumulated postretirement benefit obligation " $600,000 " " $700,000 " " $725,000 " 10% of beginning balance of market-related value of plan assets (a) $- " $87,000 " " $193,700 " Greater of the above " $600,000 " " $700,000 " " $725,000 " Net (gain) loss in accumulated other comprehensive income at beginning of year " $760,000 " " $605,000 " Asset gain (loss) not included in beginning balance of market-related value (b) - " 120,000 " Amount subject to amortization " $760,000 " " $725,000 " Amount in excess of the corridor subject to amortization " $60,000 " $- Divided by average remaining service period (years) 12 Required amortization " $5,000 " (a) See Schedule 1 (the table in the preceding paragraph) for calculation of market-related value of plan assets. (b) See Schedule 1 (the table in the preceding paragraph) for calculation of gain or loss not included in prior year's ending balance market-related value. ##### [715-60-55-95](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-95) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:b1f99510d3c127b0852f1baa3483494c34af3be27ffc740535464d442ddd5491 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The determination of the actual return or loss on plan assets component of net periodic postretirement benefit cost is as follows: - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-1F33A5A3-029F-47AD-992E-615D83D22F59-low.gif) 20X3 20X4 20X5 "Plan assets at fair value, beginning of year" $- " $870,000 " " $2,057,000 " Plus: assets contributed to plan " 1,500,000 " " 1,650,000 " " 1,912,500 " Less: benefit payments from plan " (630,000)" " (700,000)" " (900,000)" " 870,000 " " 1,820,000 " " 3,069,500 " "Less: plan assets at fair value, end of year" " (870,000)" " (2,057,000)" " (3,042,840)" Actual (return) loss on plan assets $- " $(237,000)" " $26,660 " ##### [715-60-55-96](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-96) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:ffd7639dab975873641e422917735584669842fedff2e96d7cc64f55049473a8 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following Cases (Case A and Case B, paragraphs [715-60-55-97 through 55-102](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-97) ) demonstrate the operation of defined dollar capped plans and the possible effect of the cap on projecting costs for purposes of measuring the accumulated postretirement benefit obligation and net periodic postretirement benefit cost. The Cases are simplified and illustrate only one aspect of the measurement process (see paragraphs [715-60-15-7](https://asc.understandingaccounting.org/asc/715/60/#715-60-15-7) and [715-60-35-75](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-75)). ##### [715-60-55-97](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-97) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:9ecc528afc5af2e1f4f5c2fbe4f2270f21f68fe8192bdf5794e4211af5e9f3cc Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Entity J sponsors a postretirement health care plan for its salaried employees. The plan has an annual limitation (a cap) on the dollar amount of the employer's share of the cost of covered benefits incurred by a plan participant. The retiree is responsible, therefore, for the amount by which the cost of the benefit coverage under the plan incurred during a year exceeds that cap. The entity adjusts the cap annually for the effects of inflation. For 20X3, the cap is $1,500; the inflation adjustment in 20X4 and 20X5 is assumed to be 4 percent. The employer's [health care cost trend rate](https://asc.understandingaccounting.org/glossary/h/#health-care-cost-trend-rate "An assumption about the annual rates of change in the cost of health care benefits currently provided by the postretirement benefit plan, due to factors other than changes in the composition of the plan population by age and dependency status, for each year from the measurement date until the end of the period in which benefits are expected to be paid. The health care cost trend rates implicitly consider estimates of health care inflation, changes in health care utilization or delivery patterns, technological advances, and changes in the health status of the plan participants. Differing types of services, such as hospital care and dental care, may have different trend rates.") assumption is 13 percent for 20X4 and 12 percent for 20X5. ##### [715-60-55-98](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-98) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:f4cb35dddf97cb7977c8f0635d893507d0c52b5e6f2bbe2ae16aa5032c27338a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The employer's projected cost of providing benefit coverage in 20X3-20X5 for a 67-year-old retiree follows. Similar projections are made for each age at which a plan participant is expected to receive benefits under the plan. In this Case, the incurred claims cost exceeds the cap on the employer's share of the cost in each year. - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-B9281EB9-499D-4C7E-A45A-3FD24EF83F2A-low.gif) Expected Cost for 67-Year-Old Retiree 20X3 20X4 20X5 Gross eligible charges " $3,065 " " $3,463 " " $3,879 " Medicare (a) (890) " (1,003)" " (1,125)" Deductible or coinsurance (325) (340) (355) Incurred claims cost " $1,850 " " $2,120 " " $2,399 " Annual cap on employer's cost " $1,500 " " $1,560 " " $1,622 " Employer's share of incurred claims cost " $1,500 " " $1,560 " " $1,622 " Retiree's share of gross eligible charges (b) $675 $900 " $1,132 " (a) The change in Medicare reflects the portion of the gross eligible charges for which Medicare is responsible under enacted Medicare legislation. (b) "Deductible and/or coinsurance plus share of incurred claims: 20X3—\[$325 + ($1,850 - $1,500)\]; 20X4—\[$340 + ($2,120 - $1,560)\]; 20X5—\[$355 + ($2,399 - $1,622)\]." ##### [715-60-55-99](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-99) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:d7d27ab54ad23c5f04406f82047fe7067c9021c3a3d9e9f5ab3901f4213b5f22 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If, based on the health care cost trend rate assumptions, the employer's share of costs for each plan participant is not expected to be less than the cap in the future, Entity J could measure its expected postretirement benefit obligation by projecting the annual cap. However, if per capita claims data for some plan participants or estimates of the health care cost trend rate indicate that in the future the employer's share of the incurred claims cost will be less than the cap for at least some plan participants, the employer's obligation is to be measured as described in paragraphs [715-60-35-90 through 35-105](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-90) . ##### [715-60-55-100](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-100) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:d94d4afb2d92543b196a11a94b1707938da92a69a4f6f2b8aa1d2087cf3988fd Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Entity K sponsors a contributory postretirement health care plan for its hourly employees. The plan has an annual limitation (a cap) on the dollar amount of the employer's share of the cost of covered benefits incurred by the retiree group as a whole. The Entity agrees to bear annual costs equal to a specified dollar amount ($1,500 in 20X3) multiplied by the number of retired plan participants (the employer contribution); participating retirees are required to contribute a stated amount each year ($1,000 in 20X3). The cap on the employer's share of annual costs and the retirees' contribution rates are increased 5 percent annually. The shortfall in a year (the amount by which incurred claims cost exceeds the combined employer and retiree contributions) is initially borne by the employer but is passed back to retirees in the subsequent year through supplemental retiree contributions for that year (a retrospective adjustment). ##### [715-60-55-101](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-101) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:ca74ae74fab486ae74dc58e63e342e18d8e80e2b377947a74465308dc28d9319 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The employer projects the aggregate cost of benefits expected to be paid to current plan participants (40 retirees) in each future period as follows. - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-0DFB8399-AA8F-4993-B895-65DFD9858298-low.gif) 20X3 20X4 20X5 Gross eligible charges " $160,000 " " $215,000 " " $197,000 " Medicare " (46,500)" " (62,350)" " (57,300)" Deductible or coinsurance " (20,750)" " (27,440)" " (24,700)" Incurred claims cost " $92,750 " " $125,210 " " $115,000 " Retiree contributions (a) " $40,000 " " $42,000 " " $44,080 " Maximum employer contribution (b) " 60,000 " " 63,000 " " 66,160 " " $100,000 " " $105,000 " " $110,240 " Shortfall (to be recovered by additional retiree contributions in subsequent year) " $20,210 " " $4,760 " Supplemental contribution from retirees due to shortfall in prior year " $20,210 " (a) "Per retiree: 20X3—$1,000; 20X4—$1,050; 20X5—$1,102." (b) "Per retiree: 20X3—$1,500; 20X4—$1,575; 20X5—$1,654." ##### [715-60-55-102](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-102) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:b530714a2dd20bed698a8e78da0fef6e57b9c4620f1652d4fe1967bbd47cdf50 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If, as in this Case, retirees absorb the entire shortfall in annual contributions and if there is a projected shortfall for all future years, the employer could measure its expected postretirement benefit obligation by projecting its annual contribution (contribution rate x expected number of retirees = expected obligation for the year). ### Medicare Prescription Drug, Improvement, and Modernization Act #### Implementation Guidance ##### [715-60-55-103](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-103) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:6f09cc879b4269931a5db5a9f7bc1ef1e217a7cb6dcce9695f0acf6a46b1e0a6 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following flowchart illustrates the application of certain aspects of the accounting for the effects of the Medicare Prescription Drug, Improvement, and Modernization Act. - ![](https://asc.understandingaccounting.org/asc-img/GUID-A5C3235B-37EF-407D-8DEE-90CFDD733962-low.gif) ### Settlements, Curtailments, and Certain Termination Benefits ##### [715-60-55-104](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-104) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:e499c9c9742b67c31b590d604c01c8425cdeac1b3b3dedc095b036d2422480a8 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A transaction that does not meet the three criteria in the definition of the term [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.") does not constitute a settlement for purposes of the Settlements, Curtailments, and Certain Termination Benefits Subsections. ##### [715-60-55-105](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-105) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:8f83b513a56802a24fae977786c082b64899a5f6aba9941135b94fbd91650524 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For example, investing in a portfolio of high-quality fixed-income securities with principal and interest payment dates similar to the estimated payment dates of [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.") may avoid or minimize certain risks. However, that investment decision does not constitute a settlement because that decision can be reversed, and investing in that portfolio does not relieve the employer (or the [plan](https://asc.understandingaccounting.org/glossary/p/#plan "An arrangement that is mutually understood by an employer and its employees, whereby an employer undertakes to provide its employees with benefits after they retire in exchange for their services over a specified period of time, upon attaining a specified age while in service, or a combination of both. A plan may be written or it may be implied by a well-defined, although perhaps unwritten, practice of paying postretirement benefits or from oral representations made to current or former employees. See Substantive Plan.")) of primary responsibility for a postretirement benefit obligation nor does it eliminate significant risks related to that obligation. ##### [715-60-55-106](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-106) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:d83325597af9435d2f46bfdedc451dd398bbee113187e1ee5103d2656f8eccc1 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subtopic requires recognition in [net periodic postretirement benefit cost](https://asc.understandingaccounting.org/glossary/n/#net-periodic-postretirement-benefit-cost "The amount recognized in an employer's financial statements as the cost of a postretirement benefit plan for a period. Components of net periodic postretirement benefit cost include service cost, interest cost, actual return on plan assets, gain or loss, amortization of prior service cost or credit, and amortization of the transition obligation or asset.") of any related [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.") or [transition obligation](https://asc.understandingaccounting.org/glossary/t/#transition-obligation "The amount, as of the date Subtopic 715-60 was initially applied, of the accumulated postretirement benefit obligation in excess of the fair value of plan assets plus any recognized accrued postretirement benefit cost or less any recognized prepaid postretirement benefit cost.") included in accumulated other comprehensive income. ##### [715-60-55-107](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-107) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:ce206b6ba56c8313340a2252d6e5c9145eeef18693240fa1941eed70e07077b9 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A curtailment does not only result from events that occur outside a [postretirement benefit plan](https://asc.understandingaccounting.org/glossary/p/#postretirement-benefit-plan "See Plan."). ##### [715-60-55-108](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-108) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:2788f10c16c050db6c359f200cf90cbf642f333c37e609014dd15d9fa22feb85 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Although many curtailments may result from events that occur outside a plan, such as closing a plant, discontinuing a component of an entity, or otherwise terminating employees, a curtailment also can result from a [plan amendment](https://asc.understandingaccounting.org/glossary/p/#plan-amendment "A change in the existing terms of a plan or the initiation of a new plan. A plan amendment may increase benefits (a positive plan amendment), or reduce or eliminate benefits (a negative plan amendment), including those benefits attributed to years of service already rendered.") (including a negative plan amendment) that has the effect of eliminating the accrual of defined benefits for some or all of the future services of a significant number of active plan participants. (See Example 5, Case B \[paragraphs [715-60-55-143 through 55-145](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-143) \].) ##### [715-60-55-109](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-109) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:6d7e57adcf5f605520894de779ae8270872a2e95a10e56c9c99994616b9c048a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If such an amendment occurs, accounting for a curtailment should be applied to all of the following: 1. a Any decrease in the [accumulated postretirement benefit obligation](https://asc.understandingaccounting.org/glossary/a/#accumulated-postretirement-benefit-obligation "The actuarial present value as of a particular date of all future benefits attributed to an employee's service rendered to that date assuming the plan continues in effect and that all assumptions about future events are fulfilled. The accumulated postretirement benefit obligation generally reflects a ratable allocation of expected future benefits to employee service already rendered in the attribution period. Before an employee's full eligibility date, the accumulated postretirement benefit obligation as of a particular date for an employee is the portion of the expected postretirement benefit obligation attributed to that employee's service rendered to that date; on and after the full eligibility date, the accumulated and expected postretirement benefit obligations for an employee are the same.") representing the reduction or elimination of benefits attributable to future service, which may result in a curtailment gain 2. b Any increase in the accumulated postretirement benefit obligation resulting from employees retiring earlier than expected as a result of the amendment, which may result in a curtailment loss 3. c Any prior service cost or any transition obligation remaining in accumulated other comprehensive income attributable to the future years of service of the employee group for which future accrual of benefits has been eliminated. ##### [715-60-55-110](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-110) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:84e3333e40930d6705eff0e613652b52347e2d083d50c4f8d416c7c4dcd4e401 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A gain results if at the time of a curtailment there exists negative prior service cost included in accumulated other comprehensive income due to a previous plan amendment that reduced benefits under the plan. Under paragraph [715-60-35-20](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-20), negative prior service cost included in accumulated other comprehensive income that results from an amendment that reduces benefits under the plan is treated the same as prior service cost that results from an amendment that improves benefits. For purposes of measuring the effect of a curtailment, prior service cost included in accumulated other comprehensive income includes any negative prior service cost from a prior plan amendment. Thus, the negative prior service cost included in accumulated other comprehensive income associated with the future years of service that are affected by the curtailment is a gain. That gain, to the extent it is not offset by any other effects of the curtailment, is currently recognized as a component of income. (See paragraphs [715-60-55-143 through 55-146](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-143) .) ##### [715-60-55-111](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-111) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:4f38cabacb84c77810ddebab421a8745307dac442c878c33cfcf195bc63c03ab Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An employer that immediately recognized its transition obligation in income upon adopting the provisions of this Subtopic subsequently amends its plan to eliminate its obligation for [postretirement benefits](https://asc.understandingaccounting.org/glossary/p/#postretirement-benefits "All forms of benefits, other than retirement income, provided by an employer to retirees. Those benefits may be defined in terms of specified benefits, such as health care, tuition assistance, or legal services, that are provided to retirees as the need for those benefits arises, such as certain health care benefits, or they may be defined in terms of monetary amounts that become payable on the occurrence of a specified event, such as life insurance benefits.") and partially compensates affected participants by increasing their pension benefits. In this case, the employer has terminated its postretirement benefit plan and effectively settled its remaining postretirement benefit obligation by increasing its obligation to pay pension benefits. Because the cost to the employer of settling its postretirement benefit obligation is the increase in the obligation for pension benefits, the gain on the termination of the plan must be measured taking into account the cost of the pension benefit increase. That increase should be accounted for as an increase in a pension liability (or a decrease in a pension asset). The obligation for postretirement benefits should be eliminated. The difference is a gain on [plan termination](https://asc.understandingaccounting.org/glossary/p/#plan-termination "An event in which the pension plan or postretirement benefit plan ceases to exist and all benefits are settled by the purchase of insurance contracts (for example, annuities) or by other means. The plan may or may not be replaced by another plan. A plan termination with a replacement plan may or may not be in substance a plan termination for accounting purposes.") that should be recognized pursuant to Subtopic 715-30. #### Illustrations ##### [715-60-55-112](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-112) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:7453b0fee976124df8299274486cb6c91816afa64ddb802e2ea589a358a684fe Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following Cases illustrate the accounting for settlements in various circumstances: 1. a Settlement when a transition obligation remains in accumulated other comprehensive income (Case A) 2. b Settlement when a [transition asset](https://asc.understandingaccounting.org/glossary/t/#transition-asset "The amount, as of the date Subtopic 715-60 was initially applied, of the fair value of plan assets plus any recognized accrued postretirement benefit cost or less any recognized prepaid postretirement benefit cost in excess of the accumulated postretirement benefit obligation.") remains in accumulated other comprehensive income (Case B) 3. c Effect of mid-year settlement on transition constraint (Case C). ##### [715-60-55-113](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-113) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:488701bff793be848cf86b5778e706a1e2421deb9218f4feaea88cb73e4cf445 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Entity L sponsors a postretirement life insurance plan. On December 31, 20X4, Entity L settles the accumulated postretirement benefit obligation for its current [retirees](https://asc.understandingaccounting.org/glossary/r/#retirees "Collectively, that group of plan participants that includes retired employees, their beneficiaries, and covered dependents.") ($70,000) through the purchase of nonparticipating life insurance contracts. ##### [715-60-55-114](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-114) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:90aa7590c57550452c68f666c991504fe22d6c3812dab5170be6ee68ea2ba260 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In accounting for the settlement, Entity L must determine whether recognition in income of an additional amount of any transition obligation remaining in accumulated other comprehensive income is required pursuant to the constraint on delayed recognition in income of the transition obligation (see paragraphs [715-60-35-39 through 35-40](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-39) ). At December 31, 20X4, the cumulative postretirement benefit cost accrued after the date of transition exceeds the cumulative benefits payments after that date (including payments made pursuant to the settlement) in this Case; thus, the constraint on delayed recognition in income of the transition obligation remaining in accumulated other comprehensive income is not operative. The results of the settlement are as follows. - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-9D8FADE1-1229-46FA-AAE7-6598CFB6517D-low.gif) "December 31, 20X4" Before Settlement Settlement After Settlement Accumulated postretirement benefit obligation " $(257,000)" " $70,000 " " $(187,000)" Plan assets at fair value " 73,000 " " (70,000)" (a) " 3,000 " Funded status and recognized liability " $(184,000)" $- " $(184,000)" Accumulated other comprehensive income: Net gain " $(44,575)" " $12,124 " (a) " $(32,451)" Prior service cost " 33,000 " " 33,000 " Transition obligation " 195,000 " " (12,124)" (a) " 182,876 " " $183,425 " $- " $183,425 " (a) "The maximum settlement gain subject to recognition in income is the net gain included in accumulated other comprehensive income after transition plus any transition asset remaining in accumulated other comprehensive income ($44,575 + $0 = $44,575) (see paragraph 715-60-35-151). If, as in this Case, only part of the accumulated postretirement benefit obligation is settled, a pro rata portion of the maximum gain based on the relationship of the accumulated postretirement benefit obligation settled to the total accumulated postretirement benefit obligation ($70,000 ÷ $257,000 or 27.2%) is subject to recognition in income. That amount ($44,575 x 27.2% = $12,124) must first reduce any transition obligation remaining in accumulated other comprehensive income; any excess is recognized in income in the current period (see paragraphs 715-60-35-152 through 35-155). In this Case, the settlement gain is entirely offset against the transition obligation remaining in accumulated other comprehensive income." ##### [715-60-55-115](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-115) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:bbd2444ac000c2c8fb888f97885df2763a8ec88f3e29b7bab06fb46e1a36212a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Entity M sponsors a postretirement life insurance plan. On January 2, 20X5, Entity M settles the accumulated postretirement benefit obligation for its current retirees ($200,000) through the purchase of nonparticipating life insurance contracts. ##### [715-60-55-116](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-116) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:fb1ca73eb95cabe57bfee1815385d69a7facb1c55cf73c3d139836d829fad13b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Pursuant to paragraphs [715-60-35-150 through 35-155](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-150) , a settlement gain of $78,506 is recognized in income, determined as follows. - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-51AE5C96-5336-4427-8FB5-4AE667C4AA4D-low.gif) "January 2, 20X5" Before Settlement Settlement After Settlement Accumulated postretirement benefit obligation " $(257,000)" " $200,000 " " $(57,000)" Plan assets at fair value " 350,900 " " (200,000)" " 150,900 " Funded status and recognized asset " $93,900 " $- " $93,900 " Accumulated other comprehensive income: Net gain " $(44,575)" " $34,679 " (a) " $(9,896)" Prior service cost " 33,000 " " 33,000 " Transition asset " (56,333)" " 43,827 " (a) " (12,506)" " $(67,908)" " $78,506 " " $10,598 " (a) "The maximum settlement gain is measured as the net gain included in accumulated other comprehensive income after transition plus the transition asset remaining in accumulated other comprehensive income ($44,575 + $56,333 = $100,908) (see paragraph 715-60-35-151). Since only a portion of the accumulated postretirement benefit obligation is settled, a pro rata portion of the maximum gain based on the relationship of the accumulated postretirement benefit obligation settled to the total accumulated postretirement benefit obligation ($200,000 ÷ $257,000 or 77.8%) is subject to recognition in income. That amount ($100,908 x 77.8% = $78,506) must first reduce any transition obligation remaining in accumulated other comprehensive income ($0); any excess is recognized in income in the current period (see paragraphs 715-60-35-152 through 35-155). In this Case, the entire settlement gain of $78,506 is recognized in income. The transition constraint of paragraph 715-60-35-39 that requires additional recognition in income of a transition obligation remaining in accumulated other comprehensive income in certain circumstances is not applicable because there is a transition asset remaining in accumulated other comprehensive income." ##### [715-60-55-117](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-117) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:a0e35a762d76db96b397a473e4c46019e252181f63e5e6914daf36c0c0e6719d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The transition constraint in paragraph [715-60-35-39](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-39) that requires additional recognition in income of a transition obligation remaining in accumulated other comprehensive income in certain circumstances is not applicable because there is a transition asset remaining in accumulated other comprehensive income. ##### [715-60-55-118](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-118) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:afc007e2f0ffac003f55d905565b045bc5b64b77dae52935ce610ab493e8b2a4 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Case illustrates the accounting for a settlement of part of the accumulated postretirement benefit obligation that occurs mid-year and the interaction between that event and other provisions of this Subtopic, such as the constraint on delayed recognition in net periodic postretirement benefit cost of the transition obligation. ##### [715-60-55-119](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-119) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:c01268ba38843de5a0e19d3db976cc9d2cc94dce73d95808c48693780fa95331 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Entity N's accumulated postretirement benefit obligation for its postretirement life insurance plan was $6,000,000, and there were no [plan assets](https://asc.understandingaccounting.org/glossary/p/#plan-assets "Assets—usually stocks, bonds, and other investments (except certain insurance contracts as noted in paragraph 715-60-35-109)—that have been segregated and restricted (usually in a trust) to be used for a health and welfare plan (which can include active, terminated, and retired employees or their dependents or beneficiaries). The amount of plan assets includes amounts contributed by the employer, and by plan participants for a contributory plan, and amounts earned from investing the contributions, less benefits, income taxes, and other expenses incurred. 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. Securities of the employer held by the plan are includable in plan assets provided they are transferable. 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 the employer may intend that those assets be used to provide health and welfare benefits, which may include postretirement benefits. Those assets shall be accounted for in the same manner as other employer assets of a similar nature and with similar restrictions. If a plan has liabilities other than for benefits, those nonbenefit obligations are considered as reductions of plan assets. Amounts accrued by the employer but not yet paid to the plan are not plan assets. If a trust arrangement explicitly provides that segregated assets are available to satisfy claims of creditors in bankruptcy, such a provision would effectively permit those assets to be used for other purposes at the discretion of the employer. It is not necessary to determine that a trust is bankruptcy-proof for the assets of the trust to qualify as plan assets. However, assets held in a trust that explicitly provides that such assets are available to the general creditors of the employer in the event of the employer's bankruptcy would not qualify as plan assets."). In 20X3, the entity establishes a [policy of funding](https://asc.understandingaccounting.org/glossary/f/#funding-policy "The program regarding the amounts and timing of contributions by the employers, plan participants, and any other sources (for example, state subsidies or federal grants) to provide the benefits a pension plan or other postretirement benefit plan specifies.") at the end of each year an amount equal to the benefits paid during the year plus the service and interest cost for the year. Benefits are paid at the end of each year and in 20X3 are $630,000, which is less than the net periodic postretirement benefit cost accrued for the year ($1,170,000); thus, no additional transition obligation is recognized in net periodic postretirement benefit cost pursuant to paragraph [715-60-35-39](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-39). Entity N elects to amortize net gains and losses included in accumulated other comprehensive income in excess of the corridor over the average remaining service period of plan participants (see paragraphs [715-60-35-29 through 35-30](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-29) and [715-60-55-84](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-84)). ##### [715-60-55-120](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-120) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:2d21c9b5c0e766f0eef027d88e41419ac6c885396bae463e0e9a48f26936836e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. At the beginning of 20X4, Entity N projects the life insurance benefits expected to be paid in 20X4 to retirees' beneficiaries to determine whether recognition in net periodic postretirement benefit cost of an additional amount of the transition obligation remaining in accumulated other comprehensive income will be required (see paragraph [715-60-35-40](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-40)). Although Entity N is considering settling a portion of the accumulated postretirement benefit obligation, the effects of the settlement are not included in the projection because plan settlements are not anticipated for measurement or recognition before their occurrence. The projection indicates that no additional amount is required to be recognized in net periodic postretirement benefit cost. On June 30, 20X4, Entity N contributes additional funds ($1,430,000) and settles a portion ($1,900,000) of the accumulated postretirement benefit obligation for its current retirees through the purchase of nonparticipating life insurance contracts. ##### [715-60-55-121](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-121) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:71904f592bc0cca9634b164dcf9654cc0309474f6af4881d7a2173cc816ed89e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The changes in the funded status of the plan and amounts included in accumulated other comprehensive income during the first six months of the year are as follows. - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-EE99BD22-AE39-460A-A066-1A682BC1A2E7-low.gif) Actual 12/31/X3 Six Months Postretirement Benefit Cost Assets Contributed to Plan Effects of Remeasurement Immediately before Settlement Before Settlement 6/30/X4 Accumulated postretirement benefit obligation " $(6,600,000)" " $(457,000)" (a) " $420,000 " (b) " $(6,637,000)" Plan assets at fair value " 870,000 " " 43,500 " (c) " $1,430,000 " - (b) " 2,343,500 " Funded status and recognized liability " $(5,730,000)" " (413,500)" " $1,430,000 " " $420,000 " " $(4,293,500)" Accumulated other comprehensive income: Net (gain) or loss " $360,000 " - " $(420,000)" (b) " $(60,000)" Transition obligation " 5,700,000 " " (150,000)" " 5,550,000 " Total accumulated other comprehensive income " $6,060,000 " " (150,000)" " $(420,000)" " $5,490,000 " (d) Total net periodic postretirement benefit cost " $(563,500)" (a) "Represents 6 months' service cost of $160,000 and interest cost of $297,000 on the accumulated postretirement benefit obligation for 20X4, assuming a 9% discount rate." (b) A gain results from the remeasurement of the accumulated postretirement benefit obligation immediately before the settlement as a result of a change in the assumed discount rates based on the interest rates inherent in the price at which the accumulated postretirement benefit obligation for the retirees will be settled. No gain or loss results from remeasurement of plan assets. (c) "Represents 6 months' return on plan assets, assuming a 10% return." (d) "Because there is a settlement (treated as a benefit payment) and funds are provided by the employer to effect that settlement, the constraint on delayed recognition in net periodic postretirement benefit cost of the transition obligation pursuant to paragraph 715-60-35-39 may be applicable. The test to determine whether additional recognition in income is necessary should be done based on amounts for the full year." ##### [715-60-55-122](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-122) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:0562f3970c04a4791aef6fd93e1032d2dfaf7eb40f67d676e053d695db5fe91a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Detailed calculations are presented in the following paragraph. - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-A455E413-0C6A-4AAF-A4F9-C9D8ECEB9C18-low.gif) "June 30, 20X4" Before Settlement Settlement Recognition in Income of Transition Obligation After Settlement Accumulated postretirement benefit obligation " $(6,637,000)" " $1,900,000 " " $(4,737,000)" Plan assets at fair value " 2,343,500 " " (1,900,000)" " 443,500 " Funded status and recognized liability " $(4,293,500)" $- " $(4,293,500)" Accumulated other comprehensive income: Net (gain) or loss " $(60,000)" " $17,160 " (a) " $(42,840)" Transition obligation " 5,550,000 " " (17,160)" (a) " $(718,822)" " 4,814,018 " " $5,490,000 " $- " $(718,822)" " $4,771,178 " (a) "The maximum settlement gain subject to recognition in income is the net gain included in accumulated other comprehensive income after transition plus any transition asset remaining in accumulated other comprehensive income ($60,000 + $0 = $60,000). If, as in this Case, only part of the accumulated postretirement benefit obligation is settled, a pro rata portion of the maximum gain based on the relationship of the accumulated postretirement benefit obligation settled to the total accumulated postretirement benefit obligation ($1,900,000 ÷ $6,637,000 or 28.6%) is subject to recognition in income. That amount ($60,000 x 28.6% = $17,160) must first reduce any transition obligation remaining in accumulated other comprehensive income (see paragraphs 715-60-35-152 through 35-155); any excess is recognized in income. In this situation, the settlement gain is entirely offset against the transition obligation remaining in accumulated other comprehensive income." ##### [715-60-55-123](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-123) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:94af28c33fa59583c4f8794687d0a0a6ebc8100b0b0eaec90aa259fd4bc26218 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In this Case, at June 30, 20X4, cumulative benefit payments from the date of transition to December 31, 20X4, are projected to exceed cumulative postretirement benefit cost accrued for that same period as illustrated in the following table. The additional transition obligation to be recognized in income is the amount by which cumulative benefit payments exceed cost accrued, or $718,822. - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-60C75DB1-B8CD-4101-B9E0-C85DD4FB7078-low.gif) Projected 12/31/X4 Benefit payments: Date of transition to beginning of 20X4 " $9,160,000 " 20X4 excluding settlement " 410,000 " Settlement " 1,900,000 " Cumulative benefit payments " $11,470,000 " Postretirement benefit cost recognized: Date of transition to beginning of 20X4 " $9,700,000 " 20X4 " 1,051,178 " (a) Cumulative cost recognized " $10,751,178 " Benefit payments in excess of cost recognized " $718,822 " (a) "$563,500 for period 1/1/X4-6/30/X4 plus $487,678 for period 7/1/X4-12/31/X4. The net postretirement benefit cost of $487,678 recognized in the second half of 20X4 (see the table in the following paragraph) includes amortization ($130,108) of the transition obligation that remains in accumulated other comprehensive income after recognizing in income an additional portion ($718,822) of the transition obligation remaining in accumulated other comprehensive income pursuant to paragraph 715-60-35-39. Because determination of the additional portion of the transition obligation to be recognized in income and the transition obligation amortized in income in the second half of 20X4 are interrelated, those amounts are determined in a single computation that is intended to result in the transition obligation remaining in accumulated other comprehensive income at the end of the year that appropriately reflects the constraint in paragraph 715-60-35-39." ##### [715-60-55-124](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-124) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:e5e0004768480577e176d3ad4c9bf6774774601a706317b9ccdd4c629824b071 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The projected funded status of the plan and the amounts remaining in accumulated other comprehensive income follow. - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-9792E751-8AD1-4A2B-8585-5AFF78CE9C1C-low.gif) After Settlement 6/30/X4 Six Months Postretirement Benefit Cost Benefit Payments Assets Contributed to Plan Projected 12/31/X4 Accumulated postretirement benefit obligation " $(4,737,000)" " $(379,745)" (a) " $410,000 " " $(4,706,745)" Plan assets at fair value " 443,500 " " 22,175 " (b) " (410,000)" " $1,246,745 " " 1,302,420 " Funded status and recognized liability " $(4,293,500)" " (357,570)" $- " $1,246,745 " " $(3,404,325)" Accumulated other comprehensive income: Net gain " $(42,840)" - " $(42,840)" Transition obligation " 4,814,018 " " (130,108)" (c) " 4,683,910 " Total accumulated other comprehensive income " $4,771,178 " " (130,108)" " $4,641,070 " Total net periodic postretirement benefit cost " $(487,678)" (a) "Represents 6 months' service cost of $150,000 and interest cost of $229,745 on the accumulated postretirement benefit obligation, assuming a 9.7% discount rate." (b) "Represents 6 months' return on plan assets, assuming a 10% return." (c) "Transition obligation remaining in accumulated other comprehensive income at 6/30/X4, of $4,814,018 ÷ 18.5 years remaining in amortization period = $260,217; half-year amortization = $130,108." ##### [715-60-55-125](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-125) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:ad686015aaa54c15ab538e55c85c2f7e122d006b8de3faf89297d14aa4488866 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following Cases illustrate the accounting for curtailments: 1. a A gain and a transition obligation remain in accumulated other comprehensive income (Case A). 2. b Disposal of a portion of the business when a loss and a transition obligation remain in accumulated other comprehensive income (Case B). ##### [715-60-55-126](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-126) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:e787a6f608dac760f25f2fc0095fdd9738a02ac3438f3e74f676f288741047f5 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Entity P sponsors a postretirement benefit plan. On October 29, 20X4, Entity P decides to reduce its operations by terminating a significant number of employees effective December 31, 20X4. On October 29, 20X4, it is expected that a curtailment gain will result from the termination. A consequence of the curtailment is a significant reduction in the number of employees accumulating benefits under the plan. The remaining years of expected service associated with those terminated employees who were plan participants at the date of transition is 22 percent of the remaining years of service of all plan participants at the date of transition. The remaining years of service before full eligibility associated with those terminated employees who were plan participants at the date of a prior plan amendment is 18 percent of the remaining years of service of all plan participants at the date of that plan amendment. ##### [715-60-55-127](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-127) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:c89b4a0f357eedde472b302fa2747d48bd209f93a7534da6039c650d284c900a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The sum of the effects of the plan curtailment is a gain of $5,160 that should be recognized in income when the related employees terminate (see paragraph [715-60-35-171](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-171)). That gain is determined as follows. - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-245FACC0-67B5-4CBE-8975-B3860690EF6D-low.gif) "December 31, 20X4" Before Curtailment Curtailment After Curtailment Accumulated postretirement benefit obligation " $(257,000)" " $54,000 " (a) " $(203,000)" Plan assets at fair value " 73,000 " " 73,000 " Funded status and recognized liability " $(184,000)" " $54,000 " " $(130,000)" Accumulated other comprehensive income: Net gain " $(44,575)" " $(44,575)" Prior service cost " 33,000 " " $(5,940)" (a) " 27,060 " Transition obligation " 195,000 " " (42,900)" (a) " 152,100 " Total accumulated other comprehensive income " $183,425 " " $(48,840)" " $134,585 " Gain from curtailment " $5,160 " (a) The effect of the curtailment consists of two components: a. "The transition obligation and prior service cost remaining in accumulated other comprehensive income associated with remaining years of service no longer expected to be rendered--measured as 22% (reduction in the remaining years of expected service associated with those terminated employees who were plan participants at the date of transition) of the transition obligation remaining in accumulated other comprehensive income of $195,000 ($42,900) and 18% (reduction in the remaining years of service before full eligibility for benefits associated with those terminated employees who were plan participants at the date of a prior plan amendment) of the prior service cost included in accumulated other comprehensive income of $33,000 related to that amendment ($5,940) (see paragraphs 715-60-35-164 through 35-166)" b. "The gain from the decrease in the accumulated postretirement benefit obligation of $54,000 (due to the termination of employees whose accumulated benefits were not vested under the plan) in excess of the net loss included in accumulated other comprehensive income of $0, or $54,000 (see paragraph 715-60-35-169\[a\])." ##### [715-60-55-128](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-128) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:702595d7b0970777730e6729efcb4fdb9deaf94eeac90a405656a01af7390407 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Entity R sponsors a postretirement benefit plan. On December 31, 20X4, Entity R sells a portion of its business at a gain of $100,000 before considering the effect of the related curtailment of its postretirement benefit plan. In connection with the sale, the number of employees accumulating benefits under the plan is significantly reduced; thus, a curtailment occurs. The remaining years of expected service associated with the terminated employees who were plan participants at the date of transition is 22 percent of the remaining years of service of all plan participants at the date of transition. The remaining years of service before full eligibility associated with the terminated employees who were plan participants at the date of that prior plan amendment is 18 percent of the remaining years of service of all plan participants at the date of that plan amendment. ##### [715-60-55-129](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-129) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:92b4c363e0ba02a6d719c58569b73425d7dd3334216bf65038d2c5287646a4c0 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The sum of the effects of the plan curtailment is a loss of $36,265 that should be recognized in income with the gain of $100,000 associated with Entity R's sale of a portion of its business. The loss is determined as follows. - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-7FF3F238-CC89-4291-887D-F5C605C224E5-low.gif) "December 31, 20X4" Before Curtailment Curtailment After Curtailment Accumulated postretirement benefit obligation " $(343,000)" " $54,000 " (a) " $(289,000)" Plan assets at fair value " 73,000 " " 73,000 " Funded status and recognized liability " $(270,000)" " $54,000 " " $(216,000)" Accumulated other comprehensive income: Net loss " $41,425 " " $(41,425)" (a) $- Prior service cost " 33,000 " " (5,940)" (a) " 27,060 " Transition obligation " 195,000 " " (42,900)" (a) " 152,100 " Total accumulated other comprehensive income " $269,425 " " $(90,265)" " $179,160 " Curtailment loss " $36,265 " (a) The effect of the curtailment consists of two components: a. "The transition obligation and prior service cost remaining in accumulated other comprehensive income associated with remaining years of service no longer expected to be rendered--measured as 22% (reduction in the remaining years of expected service associated with those terminated employees who were plan participants at the date of transition) of the transition obligation remaining in accumulated other comprehensive income of $195,000 ($42,900) and 18% (reduction in the remaining years of service before full eligibility for benefits associated with those terminated employees who were plan participants at the date of a prior plan amendment) of the prior service cost included in accumulated other comprehensive income of $33,000 related to that amendment ($5,940) (see paragraphs 715-60-35-164 through 35-166)" b. "The gain from the decrease in the accumulated postretirement benefit obligation of $54,000 (due to the termination of employees whose accumulated benefits were not vested under the plan) in excess of the net loss included in accumulated other comprehensive income of $41,425, or $12,575 (see paragraph 715-60-35-169\[a\])." ##### [715-60-55-130](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-130) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:d768498e3c25fca85abffb81bb008bc8693a47c481f07f51c291da015d0aac82 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Entity S sells a line of business on December 31, 20X4; before that date, the entity had no formal plan for disposal of those operations. Entity S has a separate postretirement benefit plan that provides health care benefits to retirees of the division that is sold. In connection with that sale, all of the employees of that division are terminated by Entity S resulting in no further accumulation of benefits under the postretirement benefit plan (a full curtailment), most of the terminated employees are hired by the acquiring entity (some terminated employees fully eligible for benefits elect to retire immediately), an accumulated postretirement benefit obligation of $80,000 for postretirement benefits related to the hired employees is assumed by the acquiring entity (a partial settlement, since the obligation for current retirees is retained by Entity S), and plan assets of $100,000, representing $80,000 for the settlement of the accumulated postretirement benefit obligation and $20,000 as an excess contribution, are transferred from the plan to the acquiring entity. A $300,000 gain from the sale is calculated before considering the related effects on the plan. ##### [715-60-55-131](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-131) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:735db64de02a31abaa33a5a8acc39eef21eab4a6a3da0253587934e9317eabed Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The employer's accounting policy is to determine the effects of a curtailment before determining the effects of a settlement when both events occur simultaneously. ##### [715-60-55-132](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-132) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:ec7215355d4cdfee7099b93ca42699587140b4caa970e8f87cfc55fffbb863f1 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The effect of the curtailment is determined as follows. - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-C634373A-B6B9-43EA-9370-0087955E7067-low.gif) "December 31, 20X4" Before Curtailment Curtailment-Related Effects Resulting from Sale After Curtailment Accumulated postretirement benefit obligation " $(257,000)" " $(10,000)" (a) " $(267,000)" Plan assets at fair value " 110,000 " " 110,000 " Funded status and recognized liability " $(147,000)" " $(10,000)" " $(157,000)" Accumulated other comprehensive income: Net gain " $(49,575)" " $10,000 " (a) " $(39,575)" Prior service cost " 33,000 " " (33,000)" (b) - Transition obligation " 195,000 " " (195,000)" (c) - Total accumulated other comprehensive income " $178,425 " " $(218,000)" " $(39,575)" Curtailment loss " $228,000 " (a) "The increase in the accumulated postretirement benefit obligation as a result of the fully eligible employees retiring earlier than expected is a loss of $10,000. That loss reduces the net gain included in accumulated other comprehensive income of $49,575; any excess (none in this Example) would be recognized in income as the effect of a curtailment (see paragraphs 715-60-35-169 through 35-170)." (b) "Measured as 100% (reduction in the remaining years of service before full eligibility for benefits associated with those terminated employees who were plan participants at the date of a prior plan amendment) of the prior service cost included in accumulated other comprehensive income of $33,000 related to that amendment (see paragraphs 715-60-35-164 through 35-166)." (c) "Measured as 100% (reduction in the remaining years of expected service associated with those terminated employees who were plan participants at the date of transition) of the transition obligation remaining in accumulated other comprehensive income of $195,000 (see paragraphs 715-60-35-164 through 35-166)." ##### [715-60-55-133](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-133) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:27b581aab442f6c2fc86f0272423b133087bc036a57fdba8018ac488f99bb96c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The $8,128 loss related to the settlement and transfer of plan assets that is recognized in income with the gain from the sale is determined as follows. - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-5657B8CE-28F3-4BE7-99C2-0F854D614D76-low.gif) "December 31, 20X4" After Curtailment Settlement and Transfer of Plan Assets After Settlement Accumulated postretirement benefit obligation " $(267,000)" " $80,000 " (a) " $(187,000)" Plan assets at fair value " 110,000 " " (100,000)" (a) " 10,000 " Funded status and recognized liability " $(157,000)" " $(20,000)" " $(177,000)" Accumulated other comprehensive income: Net gain " $(39,575)" " $11,872 " (b) " $(27,703)" Prior service cost - - Transition obligation - - Total accumulated other comprehensive income " $(39,575)" " $11,872 " " $(27,703)" Settlement loss " $8,128 " (a) "The accumulated postretirement benefit obligation for the employees hired by the purchaser is determined to be $80,000 and is settled when Entity S transfers plan assets of an equal amount to the purchaser. In connection with the purchase agreement, Entity S transfers an additional $20,000 of plan assets." (b) "Represents a pro rata amount of the maximum gain based on the relationship of the accumulated postretirement benefit obligation settled to the total accumulated postretirement benefit obligation ($80,000 / $267,000 or 30%). The maximum gain is measured as the net gain included in accumulated other comprehensive income after transition plus any transition asset remaining in accumulated other comprehensive income ($39,575 + $0 = $39,575). The settlement gain is, therefore, 30% of $39,575, or $11,872; recognition in income of that gain is subject to first reducing any transition obligation remaining in accumulated other comprehensive income. As there is no transition obligation remaining in accumulated other comprehensive income (the remainder was recognized in income in connection with the curtailment), the gain of $11,872 is recognized in income together with the excess $20,000 transfer of plan assets as part of the net gain from the sale (see paragraphs 715-60-35-151 through 35-155)." ##### [715-60-55-134](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-134) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:cf43e1042fc7566e906420ba61b30dc8fc8d8201cd7dc02717a1e7290c4d7428 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The sum of the effects related to postretirement benefits resulting from the sale is a loss of $236,128, the components of which are as follows. - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-FAA35024-21EC-48AF-A35E-2B736D126A0A-low.gif) Curtailment loss (paragraph 715-60-55-132) " $228,000 " Net settlement loss (see the table in the preceding paragraph) " 8,128 " Effects of sale " $236,128 " ##### [715-60-55-135](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-135) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:37755efff450e7eabdad1d74b59c7ef53df386f0209e1c2bbe003a9e4d4caa9c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Example illustrates the measurement of the effects of an offer of special [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.") pursuant to paragraphs [715-60-25-4 through 25-6](https://asc.understandingaccounting.org/asc/715/60/#715-60-25-4) and the accounting for the related curtailment. ##### [715-60-55-136](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-136) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:45f790e5f78c55425fe8ec6109adae10cb1cd8feb3a035d0cfe711e2391bd481 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. On January 16, 20X5, Entity T offers for a short period of time (until January 30, 20X5) special benefits to its employees who elect voluntary termination of employment during that period (special termination benefits). As part of the offer, employees who voluntarily terminate will be credited with an additional five years of service and five years of age to determine eligibility for [postretirement health care benefits](https://asc.understandingaccounting.org/glossary/p/#postretirement-health-care-benefits "A form of postretirement benefit provided by an employer to retirees for defined health care services or coverage of defined health care costs, such as hospital and medical coverage, dental benefits, and eye care."). Employees are normally eligible for those benefits upon attaining age 55 and rendering at least 20 years of service. ##### [715-60-55-137](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-137) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:b6c9a2628a62d87951f0d3741996cb08f5618f4688b4fd2ebc318ce267c67dad Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. On January 30, 20X5, employees representing 18 percent of the work force accept the offer of special termination benefits. For those employees, the accumulated postretirement benefit obligation attributed to prior service periods based on their previously expected retirement dates (without consideration of the special offer) is $280,000. If those employees were assumed to terminate (retire) immediately upon attaining full eligibility for benefits (age 55 with 20 years of service), the accumulated postretirement benefit obligation for those employees would be $450,000. The accumulated postretirement benefit obligation for those employees after they accept the offer of the special termination benefits ([full eligibility date](https://asc.understandingaccounting.org/glossary/f/#full-eligibility-date "The date at which an employee has rendered all of the service necessary to have earned the right to receive all of the benefits expected to be received by that employee (including any beneficiaries and dependents expected to receive benefits). Determination of the full eligibility date is affected by plan terms that provide incremental benefits expected to be received by or on behalf of an employee for additional years of service, unless those incremental benefits are trivial. Determination of the full eligibility date is not affected by plan terms that define when benefit payments commence or by an employee's current marital or dependency status.") accelerated, benefit coverage begins immediately) is $630,000. ##### [715-60-55-138](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-138) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:b0e517c6c4678d67431ec4c7624b12d30cda29ca46fdbf1efe94be289415fc69 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The remaining years of expected service associated with the terminated employees who were plan participants at the date of transition is 24 percent of the remaining years of service of all plan participants at the date of transition. In addition, the portion of the prior service cost remaining in accumulated other comprehensive income arising from a prior plan amendment associated with the remaining years of service before full eligibility that are no longer expected to be rendered by the terminated employees is $25,000. ##### [715-60-55-139](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-139) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:6e0817c18e0bd81ea268aaf085ac6f57a5cd3a0534fa6149074ed071e4c3f8e4 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In this illustration, the effects resulting from the curtailment are not reasonably estimable until January 30, 20X5, the acceptance date of the offer of special termination benefits. Consequently, at January 30, 20X5, the employer recognizes a loss of $453,400 that includes the cost of the special termination benefits ($180,000) and the net loss from the curtailment ($273,400) determined as follows. - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-5F67C2CE-7BB7-4305-A249-99513895F21D-low.gif) "January 30, 20X5" Before Employee Terminations Special Termination Benefits Effect of Curtailment After Employee Terminations Accumulated postretirement benefit obligation: Employees accepting offer " $(280,000)" " $(180,000)" (a) " $(170,000)" (b) " $(630,000)" Other employees " (633,000)" " (633,000)" " (913,000)" " (180,000)" " (170,000)" " (1,263,000)" Plan assets at fair value " 141,000 " " 141,000 " Funded status and recognized liability " $(772,000)" " $(180,000)" " $(170,000)" " $(1,122,000)" Accumulated other comprehensive income: Net gain " $(88,000)" " $88,000 " (b) $- Prior service cost " 148,500 " " (25,000)" (c) " 123,500 " Transition obligation " 693,333 " " (166,400)" (c) " 526,933 " Total accumulated other comprehensive income " $753,833 " " $(103,400)" " $650,433 " Net loss " $180,000 " " $273,400 " (a) "The loss from acceptance of the special termination benefits is $180,000 ($450,000 - $630,000), representing the difference between the accumulated postretirement benefit obligation measured assuming that active plan participants not yet fully eligible for benefits would terminate employment at their full eligibility date and that fully eligible plan participants would retire immediately and the accumulated postretirement benefit obligation reflecting the special termination benefits (see paragraph 715-60-25-5)." (b) "The increase in the accumulated postretirement benefit obligation as a result of the employees (fully eligible plan participants and other active plan participants not yet fully eligible for benefits) retiring at a date earlier than expected is a loss of $170,000 ($280,000 - $450,000). That amount is reduced by the net gain of $88,000 included in accumulated other comprehensive income (see paragraph 715-60-35-169\[b\]) as part of the accounting for the curtailment." (c) "Additional effects of the curtailment are the reduction of $25,000 in the prior service cost included in accumulated other comprehensive income (arising from a prior plan amendment) associated with the remaining years of service before full eligibility that are no longer expected to be rendered by the terminated employees and the reduction of $166,400 in the transition obligation remaining in accumulated other comprehensive income associated with remaining years of service no longer expected to be rendered--measured as 24% (reduction in the remaining years of expected service associated with those employees affected by the early retirement who were plan participants at the date of transition) of the transition obligation remaining in accumulated other comprehensive income of $693,333 (see paragraphs 715-60-35-164 through 35-166)." ##### [715-60-55-140](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-140) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:11d99245fcb20685c87626f7327f4a3d55b273d11ece068b15b830dabd0b40d1 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. It is important to distinguish between a reduction in the accumulated postretirement benefit obligation caused by a negative plan amendment and a reduction caused by a curtailment. Unless the plan is being terminated, a reduction in the accumulated postretirement benefit obligation caused by a curtailment (a curtailment that reduces the [expected postretirement benefit obligation](https://asc.understandingaccounting.org/glossary/e/#expected-postretirement-benefit-obligation "The actuarial present value as of a particular date of the postretirement benefits expected to be paid by the employer's plan to or for each employee, the employee's beneficiaries, and any covered dependents pursuant to the terms of the plan.")) is potentially recognizable as a current component of income. ##### [715-60-55-141](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-141) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:f16265c9a425375af6857eb8349ba2f8706580ee230c124b9997c098d4950e8a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following Cases illustrate when a reduction in the accumulated postretirement benefit obligation is caused by: 1. a A negative plan amendment (Case A) 2. b A curtailment (Case B). ##### [715-60-55-142](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-142) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:9f448bb2156eef95f3c37144b95db6d29938653525250df31177ef6d6fa55799 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. On December 31, 20X1, Entity A changes the terms of its retiree health care plan to require current and future retirees to contribute $100 per month toward the cost of benefits provided by the plan. The plan was previously noncontributory. As a result of the change, the accumulated postretirement benefit obligation for both active employees and retirees at December 31, 20X1, decreases by $500,000. That reduction is a negative plan amendment because the change in plan terms has reduced the benefits under the plan attributed to employee service already rendered. A curtailment has not occurred because there has been no reduction in the expected years of future service of active plan participants and the plan continues to provide additional benefits for future services. ##### [715-60-55-143](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-143) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:545135fb9025449693b4b8ef985f29279827b8f9c851a47ab5ab6ffc4dd7e6c0 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. On December 31, 20X1, Entity B changes the terms of its retiree life insurance plan for future retirees from a death benefit equal to 5 percent of final pay for each year of service to a death benefit equal to 5 percent of the pay rate in effect at December 31, 20X1, for each year of service before that date. Because Entity B switched the terms under which benefits are based to provide benefits only for services rendered before December 31, 20X1, the entity will no longer provide benefits for future service and there will be no increases in retiree life insurance for any employee services rendered after that date. That change constitutes a curtailment because accruals of death benefits for future employee service are no longer required (that is, the change eliminates the need for future accruals of death benefits for all of the future services of the active plan participants). However, the change in plan terms does not result in a termination of the plan because there is a continuing obligation to pay the future death benefits already earned by employees and current retirees. Only the accrual of additional death benefits for employees' future services has been eliminated. ##### [715-60-55-144](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-144) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:62381124898e5fb5ba60413d10c1e807e7d452a9c0e981ef5f4762e8c0fcd4b8 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Because this plan was previously a final-pay plan, the accumulated postretirement benefit obligation at December 31, 20X1, before the amendment included an amount based on projected future employee pay levels. In this Case, that amount equaled $400,000. Thus, the accumulated postretirement benefit obligation at December 31, 20X1, decreases by $400,000 as a result of the plan amendment because increases in employees' future pay levels will no longer increase their death benefits under the plan. That reduction is potentially a currently recognizable curtailment gain. ##### [715-60-55-145](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-145) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:eade4f5e8d0423054fac33fdc70f963bf3efed743b27db29d663f56d79f13d21 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Whether any or all of the $400,000 should be recognized currently as a component of net periodic postretirement benefit cost depends on the existence and amount of any net loss included in accumulated other comprehensive income that must be offset before that curtailment gain can be recognized. Any prior service cost or transition obligation included in accumulated other comprehensive income also will enter into determining the net curtailment [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."). ##### [715-60-55-146](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-146) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:a7346986ccd421b4c2f474250a670b3cafeee665a63f8cd5bc3c5ece764240ca Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following Cases illustrate the accounting for a negative plan amendment that results in a curtailment: 1. a The accounting for a negative plan amendment that results in a curtailment gain (Case A) 2. b The accounting for a negative plan amendment that results in a curtailment loss (Case B) 3. c The accounting for a negative plan amendment and a curtailment that results in recognition as a component of net periodic postretirement benefit cost of prior service cost included in accumulated other comprehensive income (Case C). ##### [715-60-55-147](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-147) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:93948c7f245053b56b7ba1e4083ce47f179dd7e890083278a0fe2425f7f9a5f6 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Entity A sponsors an unfunded postretirement benefit plan whose only benefit is life insurance coverage equal to an employee's final pay. On December 31, 20X1, Entity A amends its plan to eliminate that benefit for active employees who are not 40 years of age or older, which is a significant portion of its work force. The resulting reduction in the accumulated postretirement benefit obligation consists of two components: $150,000 represents benefits based on past pay and service already rendered by employees under age 40 (a negative plan amendment), and $250,000 represents that portion of the accumulated postretirement benefit obligation based on a projection of those employees' future pay. Because the change in plan terms eliminates the accrual of additional benefits for those employees, the $250,000 is potentially a currently recognizable curtailment gain. - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-68C8193E-264A-4008-9928-BC60DF8E36D5-low.gif) "December 31, 20X1" Before Negative Plan Amendment Negative Plan Amendment After Negative Plan Amendment Curtailment After Curtailment Accumulated postretirement benefit obligation (recognized liability) " $(750,000)" " $150,000 " " $(600,000)" " $250,000 " " $(350,000)" Amounts recognized in accumulated other comprehensive income: Prior service cost " $50,000 " " $(50,000)" (a) $- Transition obligation " 70,000 " " (70,000)" (a) - Net loss " 100,000 " " 100,000 " " $(100,000)" (b) Negative prior service cost " (30,000)" " (30,000)" " $(30,000)" " $220,000 " " $(150,000)" " $70,000 " " $(100,000)" " $(30,000)" (a) "The decrease in the accumulated postretirement benefit obligation due to a negative plan amendment is used first to reduce any existing prior service cost recognized in accumulated other comprehensive income, then to reduce any transition obligation recognized in accumulated other comprehensive income." (b) The decrease in the accumulated postretirement benefit obligation due to a curtailment is used first to reduce any net loss recognized in accumulated other comprehensive income at the date of the curtailment. ##### [715-60-55-148](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-148) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:fbd189af804ddc5ae69aa8082f2433af5e357b5b8e6cd3724f078b855701b038 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The journal entry to record the negative plan amendment is as follows. - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-B7D1A0B4-7E98-41D0-8632-4CF1864B8955-low.gif) Postretirement benefit liability " $150,000 " Other comprehensive income " $150,000 " ##### [715-60-55-149](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-149) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:2473cd2bdd4e7e5a9bfb34e5737c1116e530de2c975064686ad5076ed556cc83 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The journal entry to record the curtailment gain is as follows. - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-5A37499A-10D7-405C-BB0E-D1297387854C-low.gif) Postretirement benefit liability " $250,000 " Other comprehensive income " $100,000 " Curtailment gain " $150,000 " (a) (a) The curtailment gain is not a component of net periodic postretirement benefit cost and should be disclosed separately. ##### [715-60-55-150](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-150) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:13c98759d02b1fcb5c118853a1b03315ae06127858d454384dc8767fb2550229 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The negative plan amendment results in negative prior service cost because it reduces the accumulated postretirement benefit obligation by an amount that exceeds the prior service cost and the remaining transition obligation included in accumulated other comprehensive income. The negative prior service cost of $30,000 is recognized in net periodic postretirement benefit cost by amortizing it over future periods beginning January 1, 20X2, in accordance with paragraph [715-60-35-17](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-17). Only those participants who are active at the date of the amendment and who are not yet fully eligible for benefits (that is, participants who are 40 years of age or older) are considered in applying that paragraph to the net negative prior service cost that results from this plan amendment ##### [715-60-55-151](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-151) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:f87782a2ffb17b8614e42e1de1dd168195f9ddff4822edf0aa190dfb716fbe8d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If Entity A had instead amended the plan on October 31, 20X1, and it had a calendar-year fiscal year-end, the effects of the negative plan amendment in determining net periodic postretirement benefit cost for 20X1 would be recognized prospectively starting from November 1, 20X1. The net periodic postretirement benefit cost for the first 10 months of the year would reflect the terms of the plan before the plan amendment. ##### [715-60-55-152](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-152) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:99e0b3dfaa9480de70a8ef43f34096fffad8aae60c2d643cda6bbec70635c2be Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Entity B sponsors an unfunded postretirement health care benefit plan covering employees at five locations. On December 1, 20X1, Entity B amends its plan so that any employee at location X who does not retire by the end of 20X1 will not be entitled to receive benefits. Those employees at location X who retire by December 31, 20X1, will receive benefits under the plan terms. Employees at the other four locations are not affected by the amendment and will continue to earn benefits. ##### [715-60-55-153](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-153) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:700c89fa94524b4d497b0564818d50cecb86f94cc44fce4d15305fefd5f51ca6 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. As a result of the amendment, Entity B's accumulated postretirement benefit obligation is reduced by $400,000, representing the elimination of benefits attributable to years of service already rendered by active employees who are not eligible to retire and those eligible employees who choose not to retire (a negative plan amendment). The remaining employees at location X decide to take early retirement on December 31, 20X1 (a curtailment). The unexpected early retirements cause a $200,000 increase in the accumulated postretirement benefit obligation that is accounted for as part of the curtailment. The previously expected remaining years of service associated with all employees at location X who were plan participants at the date of transition represent 20 percent of the previously expected remaining years of service of all plan participants at the date of transition. As a result, $100,000 (20 percent x $500,000) is recognized representing accelerated [amortization](https://asc.understandingaccounting.org/glossary/a/#amortization "The process of reducing a recognized liability systematically by recognizing gains or by reducing a recognized asset systematically by recognizing losses. In accounting for pension benefits or other postretirement benefits, amortization also means the systematic recognition in net periodic pension cost or other postretirement benefit cost over several periods of amounts previously recognized in other comprehensive income, that is, gains or losses, prior service cost or credits, and any transition obligation or asset.") of the transition obligation remaining in accumulated other comprehensive income. Because the prior service cost included in accumulated other comprehensive income is eliminated by the negative plan amendment, it does not enter into the accounting for the curtailment. ##### [715-60-55-154](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-154) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:b3106e7ea827224ff2c8430a7310e3f8020ee5c4fe8161e3d2f15f3ad6db580b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Unlike the terms of the plan described in Example 6, Case A (see paragraphs [715-60-55-147 through 55-151](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-147) ), benefits under this plan are not pay-related. Thus, the accounting for the curtailment does not include any gain for the elimination of the effects of a projection of final pay. - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-800FD598-6319-4628-9849-BDA02F5ECA69-low.gif) "December 31, 20X1" Before Negative Plan Amendment Negative Plan Amendment After Negative Plan Amendment Curtailment After Curtailment Accumulated postretirement benefit obligation (recognized liability) " $(950,000)" " $400,000 " " $(550,000)" " $(200,000)" " $(750,000)" Amounts recognized in accumulated other comprehensive income: Prior service cost " $100,000 " " $(100,000)" (a) $- Transition obligation " 800,000 " " (300,000)" (a) " 500,000 " " $(100,000)" " $400,000 " Net gain " (150,000)" " (150,000)" " 150,000 " (b) - " $750,000 " " $(400,000)" " $350,000 " " $50,000 " " $400,000 " (a) "The decrease in the accumulated postretirement benefit obligation due to a negative plan amendment is used first to reduce any existing prior service cost recognized in accumulated other comprehensive income, then to reduce any transition obligation recognized in accumulated other comprehensive income." (b) The increase in the accumulated postretirement benefit obligation due to a curtailment is used first to reduce any net gain recognized in accumulated other comprehensive income at the date of the curtailment. ##### [715-60-55-155](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-155) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:ec1e6a390f5af40e382b67e70c02ec936b57a8ca54b6d5c1ee7299770220a1a0 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The journal entry to record the negative plan amendment is as follows. - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-5888894A-58A9-42A2-990F-EAC969F4ABBC-low.gif) Postretirement benefit liability " $400,000 " Other comprehensive income " $400,000 " ##### [715-60-55-156](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-156) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:9840dad055c53ea42ca6975e371ab2d1de60bb936746875fc965e47131e4b480 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The journal entry to record the curtailment loss is as follows. - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-0C1FB562-98D4-4F8A-BA6C-C7CBD3770C7B-low.gif) Curtailment loss " $150,000 " (a) Other comprehensive income " 50,000 " Postretirement benefit liability " $200,000 " (a) The curtailment loss is not a component of net periodic postretirement benefit cost and should be disclosed separately. ##### [715-60-55-157](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-157) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:c9b213e533e3a2458e947b7c9ee7f3bbe024110b72587b736259c37ec0e17799 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Entity C sponsors an unfunded postretirement health care benefit plan. Benefits under the plan are not pay-related; thus, no assumption is required about employees' future pay levels in measuring the accumulated postretirement benefit obligation. When it initially adopted the requirements of this Topic, Entity C immediately recognized its transition obligation in net income. On December 31, 20X1, the entity changes the plan's eligibility requirements from the attainment of age 65 while in service and 20 years of service to 20 years of service to be rendered after attaining age 45. The new [credited service period](https://asc.understandingaccounting.org/glossary/c/#credited-service-period "Employee service period for which benefits are earned pursuant to the terms of the plan. The beginning of the credited service period may be the date of hire or a later date. For example, a plan may provide benefits only for service rendered after a specified age. Service beyond the end of the credited service period does not earn any additional benefits under the plan. See Attribution Period.") is not deemed to be nominal in relation to employees' average total years of service before their full eligibility dates. This change reduces the accumulated postretirement benefit obligation for benefits attributable to past service (a negative plan amendment) by $300,000 for employees hired before age 45. ##### [715-60-55-158](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-158) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:290f1c86d4a05f3feb369662998a3b4e4eb6914d959268df498b01c6d782301a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Because a significant number of employees previously expected to receive benefits under the plan are under age 45, the change in plan terms also meets the definition of a curtailment because it eliminates those employees as active participants under the plan. Their remaining years of expected service represent 15 percent of the previously expected remaining years of service of all plan participants at the date of a prior plan amendment that increased benefits. Because no portion of the accumulated postretirement benefit obligation includes any amounts attributed to future pay levels, the impact of accounting for the curtailment is limited to accelerating the recognition in net periodic postretirement benefit cost of the portion of remaining prior service cost included in accumulated other comprehensive income (15 percent x $100,000) related to those employees' future years of service. - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-CABBA64F-8B33-4798-B90B-6CD5C0BACF72-low.gif) "December 31, 20X1" Before Negative Plan Amendment Negative Plan Amendment After Negative Plan Amendment Curtailment After Curtailment Accumulated postretirement benefit obligation (recognized liability) " $(850,000)" " $300,000 " " $(550,000)" " $(550,000)" Amounts recognized in accumulated other comprehensive income: Prior service cost " $400,000 " " $(300,000)" (a) " $100,000 " " $(15,000)" (b) " $85,000 " " $400,000 " " $(300,000)" " $100,000 " " $(15,000)" " $85,000 " (a) "The decrease in the accumulated postretirement benefit obligation due to a negative plan amendment is used first to reduce any existing prior service cost recognized in accumulated other comprehensive income, then to reduce any transition obligation recognized in accumulated other comprehensive income." (b) "A portion of prior service cost is recognized as a component of net periodic postretirement benefit cost because the net balance of $100,000 arose from a previous amendment and the current employees under age 45 who were participants at the date of the previous amendment are no longer participants. Accordingly, their future service has been eliminated as a basis for delayed recognition of the prior service cost as a component of net periodic postretirement benefit cost. If the negative prior service cost from the new amendment exceeded the prior service cost recognized in accumulated other comprehensive income from the previous amendment, none of the net negative prior service cost would be recognized as a component of net periodic postretirement benefit cost currently. The net negative prior service cost would be amortized over active participants' expected future service periods to full eligibility." ##### [715-60-55-159](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-159) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:b2fc3ac95f8c19cdcc4cac41fa4f4d4a2a1248c0616ac37dd8d4bab3e4f39770 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The journal entry to record the negative plan amendment is as follows. - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-E3C6C9C7-B0E2-4AAD-AC8B-619265A82AA8-low.gif) Postretirement benefit liability " $300,000 " Other comprehensive income " $300,000 " ##### [715-60-55-160](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-160) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:2f9237db8ef2b3748b7eb8533340141e7c2126401ea8f33c861a85da18f3d8af Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The journal entry to record the curtailment loss is as follows. - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-5A76C97D-365F-460C-9B66-5BCE3BFA093C-low.gif) Curtailment loss " $15,000 " Other comprehensive income " $15,000 " ##### [715-60-55-161](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-161) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:9fb66e734f39f54e72cd9b70559054b05be1cb60e04d5ad1a715bd2b3b5eb5cb Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In general an employer should measure the postretirement benefit incentive to be received by employees in exchange for early termination as the difference 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 accrued benefits for employees terminating with the enhanced benefits and the accrued benefits for those employees assuming they terminated without the enhancements. ##### [715-60-55-162](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-162) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:e152002f1266bd3d278844aa03c6506f4512dabbc41c0b996d63f5ba98a27ad1 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following simplified examples address situations involving a typical postretirement benefit plan under which participants become eligible for benefits upon attaining age 55 while in service and rendering 10 years of service and a plan under which benefits are based on years of service. To simplify the examples further, discounting and health care cost trends have been ignored. ##### [715-60-55-163](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-163) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:e908e1bd411bcd41c529a0e03c4f78ee32a8ad75eba706da0ffa6d73a32e8508 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Under Entity X's postretirement health care benefit plan, the annual cost of coverage is estimated to be $4,500 for retirees under age 65 and $1,500 for those 65 and older. The probability of employees retiring is 40 percent at age 57, 50 percent at age 62, and 10 percent at age 65. There is a 100 percent probability that retirees will die at age 75. Employees that retire on or after attaining age 55 while in service and rendering 10 or more years of service receive full employer-paid postretirement benefit coverage. ##### [715-60-55-164](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-164) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:be1a35e41887bd6dbac698d5301f47a2ca9862de32e0629fce829639f9091799 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. As part of an incentive package to encourage employees to retire early, Entity X offers for a short period of time to add three years of age and three years of service to an employee's age and accumulated service credits to determine eligibility for postretirement benefits. Two employees, A and B, accept the offer. A is age 57 and has rendered 20 years of service. B is age 52 and has rendered 12 years of service. ##### [715-60-55-165](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-165) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:4798a365a1af3b99a00adecf568b3c1dbc0bdba382befae3e1e3986bba07cf83 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The expected postretirement benefit obligation for A and B before the offer is $36,150 each, determined as follows. - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-37494531-5E8F-458F-A3B3-C51980788B78-low.gif) Retirement Age Benefits Probability of Retirement Expected Postretirement Benefit Obligation Pre-Age 65 Age 65 to 75 57 "($4,500 x 8 yrs)" + "($1,500 x 10 yrs)" x 40% " $20,400 " 62 "($4,500 x 3 yrs)" + "($1,500 x 10 yrs)" x 50 " 14,250 " 65 "($1,500 x 10 yrs)" x 10 " 1,500 " " $36,150 " ##### [715-60-55-166](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-166) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:0646d84b09e64eae12aed4574e99ae402845a271cacb58e1fe5a944a1ecbc2cf Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The accumulated postretirement benefit obligation for A and B before the offer is $36,150 and $28,920, respectively, determined as follows. - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-204C89FB-24C8-40B9-BAE6-22812401B696-low.gif) Employee Expected Postretirement Benefit Obligation Years of Service Rendered to Total Required Accumulated Postretirement Benefit Obligation A " $36,150 " x 18/18 (a) = " $36,150 " B " 36,150 " x 12/15 (b) = " 28,920 " " $72,300 " " $65,070 " (a) "A was hired at age 37 and, therefore, after 18 years of service has rendered the required 10 years of service and attained age 55 while in service to be fully eligible for benefits." (b) B must render 3 more years of service to attain age 55 while in service to be fully eligible for benefits. ##### [715-60-55-167](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-167) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:8131372c0aa844b4575279e1d61b2c1ae507602175b0a9a8485d5f7be0c869c5 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The special termination postretirement benefit is measured as the difference between the following two amounts: 1. a The benefits attributed to past service based on what A and B receive if they retire at the earliest date at which they could retire and receive postretirement benefits under the plan, ignoring the special termination benefits. That date would be immediately for A and in 3 years (upon attaining age 55) for B. 2. b The benefits A and B receive if they accept the special termination benefits offer and retire immediately. ##### [715-60-55-168](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-168) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:0b047494e74276ea06776789b48fea879bad43fedd47372a9c5334d0449dfdc6 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The calculation of those two amounts follows. - Accrued Benefits Ignoring Special Termination Benefits and Assuming A Retires Immediately and B Retires at Age 55 - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-806F4463-7803-4442-8D70-E02ED8AB8309-low.gif) Benefits Portion Earned Accrued Benefits Employee Pre-Age 65 Age 65 to 75 A "($4,500 x 8 yrs)" + "($1,500 x 10 yrs)" x 18/18 = " $51,000 " B "($4,500 x 10 yrs)" + "($1,500 x 10 yrs)" x 12/15 = " 48,000 " " $99,000 " - Accrued Benefits That Reflect Special Termination Benefits Assuming A and B Retire Immediately - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-683194B5-B2FF-4245-91CA-D9D76AC0DD69-low.gif) Benefits Portion Earned Accrued Benefits Employee Pre-Age 65 Age 65 to 75 A "($4,500 x 8 yrs)" + "($1,500 x 10 yrs)" x 100% = " $51,000 " B "($4,500 x 13 yrs)" + "($1,500 x 10 yrs)" x 100 = " 73,500 " " $124,500 " ##### [715-60-55-169](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-169) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:445582ab6e2734a07a4f14ebf40f9222651bf03492d9f02305f0b2a1d525991d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Thus, the cost of the special termination postretirement benefits is $25,500 ($124,500 - $99,000). If A and B represent a significant portion of Entity X's work force, the increase in the accumulated postretirement benefit obligation attributable solely to their early retirement, $33,930 ($99,000 - $65,070, both calculated without regard to the special termination benefits), would be accounted for as a curtailment. Otherwise, the $33,930 would be an experience loss. ##### [715-60-55-170](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-170) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:bf3baeb030a89afb14158420ba4ad67c9efbd3cd0e1f164d20ce7a71966c9a9b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The facts are the same as in Case A except that under the plan's terms retiring employees receive 2 1/2 percent coverage for each year of service. Thus, before the acceptance of special termination benefits, the full eligibility dates for A and B would be their expected retirement dates. ##### [715-60-55-171](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-171) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:029e9a09d6597213cfb12a24544aa0c0986a6f9617f8e87a9ff7decf29518332 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The accumulated postretirement benefit obligation for A and B before accepting the offer is $28,920, determined as follows. - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-15428D9A-BA88-46F2-847C-5098137D7C55-low.gif) At Retirement Service to Date/ Service to Retirement Accumulated Postretirement Benefit Obligation Age Years of Service Benefits Benefit Coverage Probability of Retirement Pre-Age 65 Age 65 to 75 Employee A 57 20 "($4,500 x 8 yrs)" + "($1,500 x 10 yrs)" x 50% x 40% x 20/20 = " $10,200 " 62 25 "($4,500 x 3 yrs)" + "($1,500 x 10 yrs)" x 62½ x 50 x 20/25 = " 7,125 " 65 28 "($1,500 x 10 yrs)" x 70 x 10 x 20/28 = 750 " 18,075 " Employee B 57 17 "($4,500 x 8 yrs)" + "($1,500 x 10 yrs)" x 42½% x 40% x 12/17 = " 6,120 " 62 22 "($4,500 x 3 yrs)" + "($1,500 x 10 yrs)" x 55 x 50 x 12/17 = " 4,275 " 65 25 "($1,500 x 10 yrs)" x 62½ x 10 x 12/17 = 450 " 10,845 " " $28,920 " ##### [715-60-55-172](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-172) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:783bc5401403b2555c5b7d25ef3255bae4ee91517e079c246c53c482ec175fea Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The special termination postretirement benefit is measured in the same manner as in Case A. ##### [715-60-55-173](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-173) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:bc5d6fff9bf6644fd7755fa3b060bc27526f25da1a3bd80fd7291287c8aef8f0 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Accrued Benefits Ignoring Special Termination Benefits and Assuming A Retires Immediately and B Retires at Age 55 - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-2A14FA63-AF20-4140-990D-C06E1C16233D-low.gif) Benefits Benefit Coverage Portion Earned Accrued Benefits Employee Pre-Age 65 Age 65 to 75 A "($4,500 x 8 yrs)" + "($1,500 x 10 yrs)" x 50% x 20/20 = " $25,500 " B "($4,500 x 10 yrs)" + "($1,500 x 10 yrs)" x 37½ x 12/15 = " 18,000 " " $43,500 " ##### [715-60-55-174](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-174) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:01e03a2c4519881abed7f01104b06ff33befabfff8f66eede32831bf788798b4 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Accrued Benefits That Reflect Special Termination Benefits Assuming A and B Retire Immediately - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-56B15C56-36A0-4612-88FE-DFC7DD1F0721-low.gif) Benefits Benefit Coverage Portion Earned Accrued Benefits Employee Pre-Age 65 Age 65 to 75 A "($4,500 x 8 yrs)" + "($1,500 x 10 yrs)" x 57½% x 100% = " $29,325 " B "($4,500 x 13 yrs)" + "($1,500 x 10 yrs)" x 37½ x 100 = " 27,563 " " $56,888 " ##### [715-60-55-175](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-175) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:a28a0739082679df056815966950be0c00319dbf33691d375dcbd6de6207a5f0 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Thus, the cost of the special termination postretirement benefits is $13,388 ($56,888 - $43,500), and $14,580 ($43,500 - $28,920) would be accounted for as a curtailment or an experience loss. ### Split-Dollar Life Insurance Arrangements #### Implementation Guidance ##### [715-60-55-176](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-176) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:62fa3b93f7e8164db5469cd67ccdc04d423d4930b6babec81662189688edd45a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A typical [endorsement split-dollar life insurance](https://asc.understandingaccounting.org/glossary/e/#endorsement-split-dollar-life-insurance "A split-dollar life insurance arrangement in which the entity owns and controls the insurance policy. The employer enters into a separate agreement that splits the policy benefits between the employer and the employee. The employer owns the policy, controls all rights of ownership, and may terminate the insurance policy (and, in turn, the policy benefits promised to the employee). To effect the split-dollar arrangement, the employer endorses a portion of the death benefits to the employee (the employee designates a beneficiary for this portion of the death benefits). Upon the death of the employee, the employee's beneficiary typically receives the designated portion of the death benefits directly from the insurance entity and the employer receives the remainder of the death benefits.") arrangement may have the following terms: 1. a An employer purchases a life insurance policy to insure the life of an employee and pays a single premium at inception of the policy. Based on the insurance carrier's experience (for example, mortality) it can either charge or credit the policyholder for the negative or positive experience, respectively. The additional premium or credit is typically effectuated through an adjustment to the cash surrender value of the policy. 2. b The employer enters into a separate agreement that splits the policy [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.") between the employer and the employee. The employer owns the policy, controls all rights of ownership, and may terminate the insurance policy (and, in turn, the policy benefits promised to the employee). To effect the split-dollar arrangement, the employer endorses a portion of the death benefits to the employee (the employee designates a beneficiary for this portion of the death benefits). Upon the death of the employee, the employee's beneficiary typically receives the designated portion of the death benefits directly from the insurance entity and the employer receives the remainder of the death benefits. ##### [715-60-55-177](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-177) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:e9e8db7b237aa1672054e425563a21d962df1f065493dfc52f094beee9217299 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The employee's portion of the death benefits is commonly based on one of the following: 1. a Amounts that exceed the gross premiums paid by the employer 2. b Amounts that exceed the sum of the gross premiums paid by the employer and an additional fixed or variable investment return on those premiums 3. c The net insurance at the date of death (that is, the face amount of the death benefit under the policy, less the cash surrender value) 4. d Amounts equal to a multiple of the employee's base salary at retirement or death (for example, twice the employee's base salary). ##### [715-60-55-178](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-178) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:a51c05baade45cef26592608ee7f7bfbef9aec720b0b0d0774eca5139852da58 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. All available evidence should be considered in determining the substance of the arrangement, such as explicit written terms of the arrangement, communications made by the employer to the employee, the employer's past practices in administering the same or similar arrangements, and whether the employer is the primary obligor for the postretirement benefit. ##### [715-60-55-179](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-179) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:e00a1df24468f224b71cde0bb65d687997e59eeba65abad513cd430566b32678 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For example, if the employer agrees to provide a death benefit to the employee even in the event of default by the insurance entity, that would provide an indication that the promise made to the employee is to provide a postretirement death benefit. If the amount of the death benefit is not explicitly tied to an insurance policy, then the amount of the postretirement benefit should also be the amount of the death benefit promised to the employee. Conversely, if the terms of the arrangement are such that the employer has no obligation to the employee upon default of the insurance entity, that would provide an indication that the postretirement benefit is a promise to maintain a life insurance policy during the employee's retirement. In determining the appropriate measurement and [attribution](https://asc.understandingaccounting.org/glossary/a/#attribution "The process of assigning pension or other postretirement benefits or costs to periods of employee service.") of the cost and obligation under any particular arrangement, employers should refer to the guidance in this Subtopic, as applicable. ##### [715-60-55-180](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-180) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:e5ff57086fee819355212ba0fe62f70675f8358c55633458d6fdbfd9e5b17d9a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For example, if the terms of the arrangement are such that the employer has no obligation, either stated or implied, to provide loans to an employee to cover insurance policy premiums in the postretirement period, that may be an indication that there is no postretirement obligation. However, if the employer through the collateral assignment arrangement with the employee has an obligation, either stated or implied, to provide loans to an employee to cover the experience gains and losses of the insurance entity, that may indicate that an employer has a postretirement benefit obligation. In determining the appropriate measurement and attribution of the cost and obligation under any particular arrangement, employers should refer to the guidance in this Subtopic, as applicable. ##### [715-60-55-181](https://asc.understandingaccounting.org/asc/715/60/#715-60-55-181) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:48.222Z to 2026-09-10T01:00:48.222Z Record version: sha256:2458fab19d596a6af546fece328b3a1e5b704a8c7829b3dfec53a003cc48311b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In determining the nature and substance of the arrangement, the employer should assess what future cash flows the employer is entitled to, if any, as well as the employee's obligation and ability to repay the employer. For example, if the arrangement limited the amount the employer could recover to the amount of the cash surrender value of the insurance policy held by the employee (or retiree), and if the employer's loan to the employee (or retiree) is greater than the cash surrender value of the insurance policy, at the balance sheet date the employer's asset would be limited to the amount of the cash surrender value of the insurance policy. Conversely, if the arrangement required the employee to repay the employer irrespective of the collateral assigned and the employer has determined that the employee loan is collectible and intends to seek recovery beyond the cash surrender value of the life insurance policy, the employer should recognize the value of the loan (including accrued interest, if applicable) considering the guidance in Subtopic 835-30. An employer should evaluate all available information in determining the nature and substance of the collateral assignment split-dollar life insurance arrangement. Source downloaded (UTC): 2026-09-10T01:00:51.148Z to 2026-09-10T01:00:51.148Z Record version: sha256:535118db42c7f0ef6ced01acf748ecec59d4d067d274977eec162598021548fc Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 715-60-60: 60 Relationships [Read section](https://asc.understandingaccounting.org/asc/715/60/#60-relationships) SEC content: no #### Business Combinations ##### [715-60-60-1](https://asc.understandingaccounting.org/asc/715/60/#715-60-60-1) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:51.148Z to 2026-09-10T01:00:51.148Z Record version: sha256:7dd8d053fecb132f1d7663d06b2e4e3aa8757576b79e5ae6ee3b5edcc0f849d5 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For guidance on the accounting when an employer is acquired in a business combination and that employer sponsors a single-employer [defined benefit postretirement 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.)"), see paragraph [805-20-25-25](https://asc.understandingaccounting.org/asc/805/20/#805-20-25-25). ##### [715-60-60-2](https://asc.understandingaccounting.org/asc/715/60/#715-60-60-2) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:51.148Z to 2026-09-10T01:00:51.148Z Record version: sha256:ef915e7f106ba2396101d48c27127c506c429977df4c5ab7e4f37a02bc103a7b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For guidance on plans to terminate certain employees if a business combination is probable, see paragraphs [805-20-55-50 through 55-51](https://asc.understandingaccounting.org/asc/805/20/#805-20-55-50) . #### Consolidation ##### [715-60-60-3](https://asc.understandingaccounting.org/asc/715/60/#715-60-60-3) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:51.148Z to 2026-09-10T01:00:51.148Z Record version: sha256:41e7b3348f4487c7b106a02841cae251f27ba7c2168cbbbbe55805e4fab88f73 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For consolidation guidance on employee benefit plans, see paragraph [810-10-15-12](https://asc.understandingaccounting.org/asc/810/10/#810-10-15-12). #### Extractive Activities—Mining ##### [715-60-60-4](https://asc.understandingaccounting.org/asc/715/60/#715-60-60-4) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:51.148Z to 2026-09-10T01:00:51.148Z Record version: sha256:2a959c35e90b5100b6b728b36f7c874f4ad61b3e73c890f9b5317c97824287ce Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For guidance on the United Mine Workers of America Combined Benefit Fund, see Subtopic 930-715. #### Regulated Operations ##### [715-60-60-5](https://asc.understandingaccounting.org/asc/715/60/#715-60-60-5) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:51.148Z to 2026-09-10T01:00:51.148Z Record version: sha256:3cff79880e7f7f85178cdfd32d1de8baa57ebed3817014c73c2a607d3cb1d71a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For guidance on rate-regulated entities, and the actions of regulators that may change the timing of recognition of [net periodic postretirement benefit cost](https://asc.understandingaccounting.org/glossary/n/#net-periodic-postretirement-benefit-cost "The amount recognized in an employer's financial statements as the cost of a postretirement benefit plan for a period. Components of net periodic postretirement benefit cost include service cost, interest cost, actual return on plan assets, gain or loss, amortization of prior service cost or credit, and amortization of the transition obligation or asset."), see Subtopic 980-715. ##### [715-60-60-6](https://asc.understandingaccounting.org/asc/715/60/#715-60-60-6) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:51.148Z to 2026-09-10T01:00:51.148Z Record version: sha256:69ab56d22349b7e9e3e7fb25297585615589731622ff3b0b50b52dbc4cab1163 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For guidance on a continuing other postretirement [plan](https://asc.understandingaccounting.org/glossary/p/#plan "An arrangement that is mutually understood by an employer and its employees, whereby an employer undertakes to provide its employees with benefits after they retire in exchange for their services over a specified period of time, upon attaining a specified age while in service, or a combination of both. A plan may be written or it may be implied by a well-defined, although perhaps unwritten, practice of paying postretirement benefits or from oral representations made to current or former employees. See Substantive Plan.") of a rate-regulated entity, see Subtopic 980-715. Source downloaded (UTC): 2026-09-10T01:00:52.917Z to 2026-09-10T01:00:52.917Z Record version: sha256:e9a14ce13f46fbe09ae819bf43469e7213c6919ff29b53c9d75c65cb8d7b714d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 715-60-65: 65 Transition and Open Effective Date Information [Read section](https://asc.understandingaccounting.org/asc/715/60/#65-transition-and-open-effective-date-information) SEC content: no ##### [715-60-65-1](https://asc.understandingaccounting.org/asc/715/60/#715-60-65-1) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:52.917Z to 2026-09-10T01:00:52.917Z Record version: sha256:8c0774f84dedf0f50893020477fa1b2de96614d17780399396c075dfe251390b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Paragraph superseded on 03/23/2010 after the end of the transition period stated in FASB Statement No. 158, _Employers' Accounting for Defined Benefit Pension and Other Postretirement Plans,_ and FSP FAS 158-1. Source downloaded (UTC): 2026-09-10T01:00:58.143Z to 2026-09-10T01:01:17.755Z Record version: sha256:1ba7a48dadbf9e895541d5af02d41c0ee0f1a7740e03fded8307949fea81e91d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 715-70: Compensation—Retirement Benefits — Defined Contribution Plans ### Machine-generated study aids ```json { "summary": "ASC 715-70 governs employer accounting and disclosure for defined contribution pension and other postretirement benefit plans—plans that provide an individual account for each participant and benefits based only on contributions plus returns. The core rule is that net periodic cost equals the contribution called for in the period in which the employee renders service (715-70-35-1), with costs accrued during the service period if contributions relate to periods after retirement or termination. Plans with characteristics of both defined benefit and defined contribution plans must be accounted for based on their substance (715-70-15-2).", "key_points": [ "An employer's obligation is fully satisfied when the period's contribution is made, provided costs are not deferred and recognized after the related service period (715-70-05-2).", "Net pension or other postretirement benefit cost for a period is the contribution called for in that period; contributions called for after retirement or termination must be accrued during the employee's service period (715-70-35-1).", "If a plan has characteristics of both a defined benefit and defined contribution plan and its substance is to provide a defined benefit (e.g., some target benefit plans), account for it under Subtopic 715-30 or 715-60 and disclose per 715-20-50-1 and 715-20-50-5 (715-70-15-2).", "Employers must disclose defined contribution plan cost for all periods presented separately from defined benefit cost, plus the nature and effect of significant changes affecting comparability such as a change in contribution rate, a business combination, or a divestiture (715-70-50-1).", "A floor-offset arrangement—where account balances in a defined contribution plan reduce the employer's defined benefit obligation—is accounted for as two separate plans, not one (715-70-55-2 through 55-3).", "Assets contributed in excess of the required annual contribution and held in a suspense account pending allocation are recorded as an employer asset (the employer retains the risks and rewards), with compensation expense recognized when the plan makes the allocation, measured at fair value at that time (715-70-55-4 through 55-7).", "Unallocated employer common stock in the plan is reported as treasury stock; unallocated employer and third-party debt securities are reported as assets (not debt extinguishment) measured at the lower of cost or fair value (715-70-55-8 through 55-9)." ], "categories": [ "Compensation and benefits", "Recognition", "Disclosure", "Subsequent measurement" ], "audience_level": "intermediate", "student_note": "Exams love the contrast: defined contribution cost is simply the contribution owed for the period—no actuarial assumptions, no funded status on the balance sheet—whereas defined benefit accounting under 715-30/715-60 is far more complex. The classic trap is assuming a plan labeled \"defined contribution\" is one; substance controls (target benefit and floor-offset arrangements must be analyzed carefully, and floor-offset arrangements are two separate plans).", "related_topics": [ "715-10", "715-20", "715-30", "715-60", "320-10", "321-10" ], "key_concepts": [ "defined contribution plan", "net periodic benefit cost", "individual participant accounts", "floor-offset plan", "target benefit plan", "unallocated suspense account assets", "postretirement health care accounts", "treasury stock presentation" ] } ``` Source downloaded (UTC): 2026-09-10T01:00:58.143Z to 2026-09-10T01:00:58.143Z Record version: sha256:4e83077bcde112e1c6fbf4d08bb90880ad129920235493b7d8e37852e059ae88 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 715-70-00: 00 Status [Read section](https://asc.understandingaccounting.org/asc/715/70/#00-status) SEC content: no ##### [715-70-00-1](https://asc.understandingaccounting.org/asc/715/70/#715-70-00-1) Pending content: no Source downloaded (UTC): 2026-09-10T01:00:58.143Z to 2026-09-10T01:00:58.143Z Record version: sha256:f62a36466a6fd54fa262a58335c576606740c2237d05e3c77f9d6697f477e4bd Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following table identifies the changes made to this Subtopic.
ParagraphActionAccounting Standards UpdateDate
Defined Contribution PlanAmendedAccounting Standards Update No. 2014-0603/14/2014
Defined Contribution Postretirement PlanSupersededAccounting Standards Update No. 2014-0603/14/2014
Fair Value (3rd def.)AddedAccounting Standards Update No. 2012-0410/01/2012
715-70-15-2AddedAccounting Standards Update No. 2012-0410/01/2012
715-70-35-2SupersededAccounting Standards Update No. 2012-0410/01/2012
715-70-50-1AmendedAccounting Standards Update No. 2014-0603/14/2014
715-70-55-6AmendedAccounting Standards Update No. 2016-0101/05/2016
715-70-55-7AmendedAccounting Standards Update No. 2012-0410/01/2012
715-70-55-9AmendedAccounting Standards Update No. 2012-0410/01/2012
Source downloaded (UTC): 2026-09-10T01:01:00.742Z to 2026-09-10T01:01:00.742Z Record version: sha256:2ff3f1feb8eca0b0e55c799dbfd773724ef7fd57343dead20614d0bb1ec2fb02 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 715-70-05: 05 Overview and Background [Read section](https://asc.understandingaccounting.org/asc/715/70/#05-overview-and-background) SEC content: no ##### [715-70-05-1](https://asc.understandingaccounting.org/asc/715/70/#715-70-05-1) Pending content: no Source downloaded (UTC): 2026-09-10T01:01:00.742Z to 2026-09-10T01:01:00.742Z Record version: sha256:3e2340b5b95cb5e3f5280d9092cb9b3413b09aa1a32a4aca0e9a693e56e45227 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subtopic provides guidance on the accounting and reporting of [defined contribution plans](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."). ##### [715-70-05-2](https://asc.understandingaccounting.org/asc/715/70/#715-70-05-2) Pending content: no Source downloaded (UTC): 2026-09-10T01:01:00.742Z to 2026-09-10T01:01:00.742Z Record version: sha256:3a79a8199641f8751f60259b1539fb16bc74f33d5788ade4a07f179bad0e8974 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An employer's present obligation under the terms of a plan is fully satisfied when the contribution for the period is made, provided that costs (defined contributions) are not being deferred and recognized in periods after the related service period of the individual to whose account the contributions are to be made. ##### [715-70-05-3](https://asc.understandingaccounting.org/asc/715/70/#715-70-05-3) Pending content: no Source downloaded (UTC): 2026-09-10T01:01:00.742Z to 2026-09-10T01:01:00.742Z Record version: sha256:a173c78844efc01654b4c21817db39d6907e9b2d5d208f06e5de46cc9a20c47c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In a postretirement health plan, an employer may establish individual postretirement health care accounts for each employee, each year contributing a specified amount to each active employee's account. The balance in each employee's account may be used by that employee after the employee's retirement to purchase health care insurance or for other health care benefits. Rather than providing for defined health care benefits, the employer is providing a defined amount of money that may be used by retirees toward the payment of their health care costs. Source downloaded (UTC): 2026-09-10T01:01:03.844Z to 2026-09-10T01:01:03.844Z Record version: sha256:b5eaaf2045becfc1dea7f774bb1f1d222d42585469a8c5e87935bdf1ba520c2b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 715-70-15: 15 Scope and Scope Exceptions [Read section](https://asc.understandingaccounting.org/asc/715/70/#15-scope-and-scope-exceptions) SEC content: no #### Overall Guidance ##### [715-70-15-1](https://asc.understandingaccounting.org/asc/715/70/#715-70-15-1) Pending content: no Source downloaded (UTC): 2026-09-10T01:01:03.844Z to 2026-09-10T01:01:03.844Z Record version: sha256:4c4ed714c3b6177eca80e7a50366221eee78b2f23d75c4a34777ee6c23c8fcd5 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subtopic follows the same Scope and Scope Exceptions as outlined in the Overall Subtopic, see Section 715-10-15. #### Plans with Characteristics of both a Defined Contribution and a Defined Benefit Plan ##### [715-70-15-2](https://asc.understandingaccounting.org/asc/715/70/#715-70-15-2) Pending content: no Source downloaded (UTC): 2026-09-10T01:01:03.844Z to 2026-09-10T01:01:03.844Z Record version: sha256:db4eb663facb489e071a883f3d84d6d23f50925b2f1e1150e8f728635542bde2 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A pension or other postretirement benefit plan having characteristics of both 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.") requires careful analysis. If the substance of the plan is to provide a defined benefit, as may be the case with some target benefit plans, the accounting requirements shall be determined in accordance with the provisions of Subtopic 715-30 or 715-60 applicable to a defined benefit plan and the disclosure requirements shall be determined in accordance with the provisions of paragraphs [715-20-50-1](https://asc.understandingaccounting.org/asc/715/20/#715-20-50-1) and [715-20-50-5](https://asc.understandingaccounting.org/asc/715/20/#715-20-50-5). Source downloaded (UTC): 2026-09-10T01:01:08.191Z to 2026-09-10T01:01:08.191Z Record version: sha256:835915647fe12255bb8815a81f5dad6d1915f17eb63597306cd3cdd17b5cbd5c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 715-70-35: 35 Subsequent Measurement [Read section](https://asc.understandingaccounting.org/asc/715/70/#35-subsequent-measurement) SEC content: no #### Defined Contribution Plans ##### [715-70-35-1](https://asc.understandingaccounting.org/asc/715/70/#715-70-35-1) Pending content: no Source downloaded (UTC): 2026-09-10T01:01:08.191Z to 2026-09-10T01:01:08.191Z Record version: sha256:31a3274b3d49dae0c5daea65c40f9ce009cc53f17840daff4d6433067088dccd Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. To the extent a plan's defined contributions to an individual's account are to be made for periods in which that individual renders services, the net pension or other postretirement benefit cost for a period shall be the contribution called for in that period. If a plan calls for contributions for periods after an individual retires or terminates, the estimated cost shall be accrued during the employee's service period. ##### [715-70-35-2](https://asc.understandingaccounting.org/asc/715/70/#715-70-35-2) Pending content: no Source downloaded (UTC): 2026-09-10T01:01:08.191Z to 2026-09-10T01:01:08.191Z Record version: sha256:9d895edccbf6d19518e10346d513deb66618f2baf45ca132fe1eff058039ded3 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2012-04](https://asc.understandingaccounting.org/updates/asu-2012-04/). Source downloaded (UTC): 2026-09-10T01:01:10.146Z to 2026-09-10T01:01:10.146Z Record version: sha256:cc1e825dfeb5fb8b00f40762269f79114c0be62f11da8dfcbf6d622b454b5de2 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 715-70-50: 50 Disclosure [Read section](https://asc.understandingaccounting.org/asc/715/70/#50-disclosure) SEC content: no ##### [715-70-50-1](https://asc.understandingaccounting.org/asc/715/70/#715-70-50-1) Pending content: no Source downloaded (UTC): 2026-09-10T01:01:10.146Z to 2026-09-10T01:01:10.146Z Record version: sha256:2571d7760e38cac80daf3e5854d37fb3e3793d566661f1a8afce43ef1e439902 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An employer shall disclose the amount of cost recognized for defined contribution pension plans and for other [defined contribution postretirement benefit plans](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.") for all periods presented separately from the amount of cost recognized for defined benefit plans. The disclosures shall include a description of the nature and effect of any significant changes during the period affecting comparability, such as a change in the rate of employer contributions, a business combination, or a divestiture. 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. Source downloaded (UTC): 2026-09-10T01:01:21.184Z to 2026-09-10T01:01:50.542Z Record version: sha256:bb61d05941c276052db785cd417be6da8eabbf3f059f50479b1b093afe157e83 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 715-80: Compensation—Retirement Benefits — Multiemployer Plans ### Machine-generated study aids ```json { "summary": "ASC 715-80 governs an employer's accounting and disclosure for participation in multiemployer pension and other postretirement benefit plans — plans to which two or more unrelated employers contribute, usually under collective-bargaining agreements. The core rule is defined-contribution-like: the employer recognizes as net pension (or net periodic postretirement benefit) cost the required contribution for the period, including cash and the fair value of noncash contributions, and recognizes a liability only for unpaid required contributions (715-80-35-1). Extensive plan-by-plan disclosures (zone status, EIN, contributions, collective-bargaining agreement expirations, withdrawal exposure) are required so users can assess the distinctive risks of multiemployer participation.", "key_points": [ "An employer recognizes as net pension cost or net periodic postretirement benefit cost the required contribution for the period (cash plus fair value of noncash contributions) and records a liability for any unpaid required contributions (715-80-35-1); an executed agreement to make future contributions does not create a liability beyond contributions currently due and unpaid (715-80-55-2).", "If withdrawal from the plan under circumstances giving rise to an obligation, or an increased contribution under a maintenance of benefits clause, is probable or reasonably possible, Topic 450 contingency accounting applies (715-80-35-2; 715-80-50-2).", "The Subtopic applies to all multiemployer pension and OPEB plans but not to multiple-employer plans, which are in substance aggregations of single-employer plans pooled for investment or administrative efficiency and ordinarily do not involve collective bargaining (715-80-15-2 through 15-3).", "For each individually significant multiemployer pension plan, an employer must disclose (in tabular format when feasible) the plan's legal name, EIN/plan number, most recently available PPA certified zone status (or funded-percentage ranges of <65%, 65–80%, at least 80%), collective-bargaining agreement expiration dates, contributions made, whether contributions exceed 5 percent of total plan contributions per Form 5500, and whether a funding improvement or rehabilitation plan is pending or implemented, whether a surcharge was paid, and any required minimum future contributions (715-80-50-5).", "An employer must give a narrative description of the plans and its participation showing how the risks differ from single-employer plans (715-80-50-4), describe changes affecting period-to-period comparability such as business combinations, divestitures, rate changes, or changes in covered employees (715-80-50-6), and disclose in tabular form total contributions to plans that are not individually significant and total contributions to all plans (715-80-50-9).", "When plan-level information is not publicly available, additional disclosures about the nature of benefits, the extent of the employer's potential responsibility for plan obligations, and available quantitative plan data are required; certain quantitative items may be omitted if they cannot be obtained without undue cost and effort, with an explanation of what was omitted and why (715-80-50-7 through 50-8).", "A multiemployer plan cannot be a substantially equivalent successor plan for a terminated single-employer defined benefit plan, so prior service cost in accumulated other comprehensive income must be recognized on an accelerated basis (715-80-55-3 through 55-4); an arrangement in which retirees lose plan coverage when the former employer stops contributing is not a multiemployer plan (715-80-55-5)." ], "categories": [ "Compensation and benefits", "Disclosure", "Recognition", "Contingencies and guarantees" ], "audience_level": "intermediate", "student_note": "The key exam trap is assuming multiemployer plan participation requires defined benefit accounting: it does not — expense equals the required contribution, and no unfunded benefit obligation is recorded unless withdrawal liability becomes probable or reasonably possible under Topic 450. Also distinguish a true multiemployer plan (obligation to retirees survives an employer's withdrawal) from a multiple-employer plan, which is accounted for as an aggregation of single-employer plans.", "related_topics": [ "715-10", "715-30", "715-60", "715-20", "450", "450-20" ], "key_concepts": [ "multiemployer plan", "required contribution", "withdrawal liability", "pension protection act zone status", "collective-bargaining agreement", "multiple-employer plan", "funding improvement or rehabilitation plan", "successor plan" ] } ``` Source downloaded (UTC): 2026-09-10T01:01:21.184Z to 2026-09-10T01:01:21.184Z Record version: sha256:0abfe5a7bd488a795ef7f0a720870dab9671ed43db07e258e29cc969dd16a20c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 715-80-00: 00 Status [Read section](https://asc.understandingaccounting.org/asc/715/80/#00-status) SEC content: no ##### [715-80-00-1](https://asc.understandingaccounting.org/asc/715/80/#715-80-00-1) Pending content: no Source downloaded (UTC): 2026-09-10T01:01:21.184Z to 2026-09-10T01:01:21.184Z Record version: sha256:bb189f14e0b08fe7209e6af4d55754338afa9b6cf07f875a134e78052da777fe Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following table identifies the changes made to this Subtopic.
ParagraphActionAccounting Standards UpdateDate
Nonpublic EntityAddedAccounting Standards Update No. 2011-0909/21/2011
Pension BenefitsAddedAccounting Standards Update No. 2011-0909/21/2011
Postretirement Benefits Other Than PensionsAddedAccounting Standards Update No. 2011-0909/21/2011
Single-Employer PlanAddedAccounting Standards Update No. 2011-0909/21/2011
Single-Employer Plan (1st def.)AddedAccounting Standards Update No. 2014-0603/14/2014
Single-Employer Plan (2nd def.)SupersededAccounting Standards Update No. 2014-0603/14/2014
715-80-35-1AmendedAccounting Standards Update No. 2012-0410/01/2012
715-80-50-1SupersededAccounting Standards Update No. 2011-0909/21/2011
715-80-50-2AmendedAccounting Standards Update No. 2011-0909/21/2011
715-80-50-3 through 50-11
AddedAccounting Standards Update No. 2011-0909/21/2011
715-80-50-4AmendedAccounting Standards Update No. 2014-0603/14/2014
715-80-50-5AmendedAccounting Standards Update No. 2015-1006/12/2015
715-80-55-6 through 55-8
AddedAccounting Standards Update No. 2011-0909/21/2011
715-80-65-1AddedAccounting Standards Update No. 2011-0909/21/2011
Source downloaded (UTC): 2026-09-10T01:01:23.025Z to 2026-09-10T01:01:23.025Z Record version: sha256:918eef8046a1c3038f75a15ddd17077abce29cc10e7d6e996ff54bd006706fbe Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 715-80-05: 05 Overview and Background [Read section](https://asc.understandingaccounting.org/asc/715/80/#05-overview-and-background) SEC content: no ##### [715-80-05-1](https://asc.understandingaccounting.org/asc/715/80/#715-80-05-1) Pending content: no Source downloaded (UTC): 2026-09-10T01:01:23.025Z to 2026-09-10T01:01:23.025Z Record version: sha256:d87d4195410795795864cbb40281ad5af39b47fb554c3695e748b8cf1315fc9f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subtopic provides guidance on the accounting and reporting of multiemployer pension and other postretirement benefit plans. For purposes of this Subtopic, a [multiemployer plan](https://asc.understandingaccounting.org/glossary/m/#multiemployer-plan "A pension or postretirement benefit plan to which two or more unrelated employers contribute, usually pursuant to one or more collective-bargaining agreements. A characteristic of multiemployer plans is that assets contributed by one participating employer may be used to provide benefits to employees of other participating employers since assets contributed by an employer are not segregated in a separate account or restricted to provide benefits only to employees of that employer. A multiemployer plan is usually administered by a board of trustees composed of management and labor representatives and may also be referred to as a joint trust or union plan. Generally, many employers participate in a multiemployer plan, and an employer may participate in more than one plan. The employers participating in multiemployer plans usually have a common industry bond, but for some plans the employers are in different industries and the labor union may be their only common bond. Some multiemployer plans do not involve a union. For example, local chapters of a not-for-profit entity (NFP) may participate in a plan established by the related national organization.") is a pension plan or other postretirement benefit plan to which two or more unrelated employers contribute, usually pursuant to one or more collective-bargaining agreements. ##### [715-80-05-2](https://asc.understandingaccounting.org/asc/715/80/#715-80-05-2) Pending content: no Source downloaded (UTC): 2026-09-10T01:01:23.025Z to 2026-09-10T01:01:23.025Z Record version: sha256:6654af355a000156e63d4beb5aa247ecf547931c41327ba85feedf9d7c15347e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In a multiemployer setting, eligibility for benefits is defined by the plan; retired employees continue to receive benefits whether or not their former employers continue to contribute to the plan. ##### [715-80-05-3](https://asc.understandingaccounting.org/asc/715/80/#715-80-05-3) Pending content: no Source downloaded (UTC): 2026-09-10T01:01:23.025Z to 2026-09-10T01:01:23.025Z Record version: sha256:9d102569c58f378f40b329a2b3c9cefda4d3eff7f412e779cacef92a1fe85c4c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. However, in a multiemployer postretirement benefit plan, plan participants not yet eligible for benefits may lose accumulated postretirement benefits if their current or former employer withdraws from a plan unless they take or have a job with other employers who participate in the plan. ##### [715-80-05-4](https://asc.understandingaccounting.org/asc/715/80/#715-80-05-4) Pending content: no Source downloaded (UTC): 2026-09-10T01:01:23.025Z to 2026-09-10T01:01:23.025Z Record version: sha256:97ae96f1da38a4d363fffd37c247cef27f29cd0a4d2b86a4cc1893c9d0117d2b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. While the postretirement benefit plan may have the option of canceling the accrued service credits that apply toward the required service, within the bargaining unit, of plan participants who were employed by a withdrawing employer and who become or are employed by another participating employer, that rarely occurs because of the difficulty of matching employees to specific employers. For example, in certain industries, an employee may work for more than one employer in a single day and different employers on different days, making it difficult to associate any portion of that employee's past service with a specific employer. Source downloaded (UTC): 2026-09-10T01:01:25.680Z to 2026-09-10T01:01:25.680Z Record version: sha256:a9aefe160d034958a9dd669b5d47021318b0ad6487b4d84fde6033a8bb77c1ee Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 715-80-15: 15 Scope and Scope Exceptions [Read section](https://asc.understandingaccounting.org/asc/715/80/#15-scope-and-scope-exceptions) SEC content: no #### Overall Guidance ##### [715-80-15-1](https://asc.understandingaccounting.org/asc/715/80/#715-80-15-1) Pending content: no Source downloaded (UTC): 2026-09-10T01:01:25.680Z to 2026-09-10T01:01:25.680Z Record version: sha256:629767baf46509920c1f6e03722cfd01cf7307b3798378f2a8a85357214f553f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subtopic follows the same Scope and Scope Exceptions as outlined in the Overall Subtopic, see Section 715-10-15, with specific exceptions and qualifications noted below. #### Transactions ##### [715-80-15-2](https://asc.understandingaccounting.org/asc/715/80/#715-80-15-2) Pending content: no Source downloaded (UTC): 2026-09-10T01:01:25.680Z to 2026-09-10T01:01:25.680Z Record version: sha256:ed6c78cb7b1727274a1979a89a8210faeb4ed31967b41ffa11e984f2eae08621 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The guidance in this Subtopic applies to all multiemployer pension or other postretirement benefit plans. ##### [715-80-15-3](https://asc.understandingaccounting.org/asc/715/80/#715-80-15-3) Pending content: no Source downloaded (UTC): 2026-09-10T01:01:25.680Z to 2026-09-10T01:01:25.680Z Record version: sha256:ecc5b4ff1314162acb77e33782125ea99955b3b05070dbbf70d0edfcd7e1670d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The guidance in this Subtopic does not apply to multiple-employer plans - as distinguished from multiemployer plans. Multiple-employer plans are in substance aggregations of single-employer plans, combined to allow participating employers to pool plan assets for investment purposes or to reduce the costs of plan administration. Those plans ordinarily do not involve collective-bargaining agreements. They may also have features that allow participating employers to have different benefit formulas, with the employer's contributions to the plan based on the benefit formula selected by the employer. Source downloaded (UTC): 2026-09-10T01:01:32.535Z to 2026-09-10T01:01:32.535Z Record version: sha256:4b305ecdb456bf92382eb4677591875f35b3e824fd45797fa6484ecdc312429a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 715-80-35: 35 Subsequent Measurement [Read section](https://asc.understandingaccounting.org/asc/715/80/#35-subsequent-measurement) SEC content: no ##### [715-80-35-1](https://asc.understandingaccounting.org/asc/715/80/#715-80-35-1) Pending content: no Source downloaded (UTC): 2026-09-10T01:01:32.535Z to 2026-09-10T01:01:32.535Z Record version: sha256:e5794a058e8c1d908933ed2a6d887519c82a1f7f7213e540acf739e7fd7a057a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An employer participating in a [multiemployer plan](https://asc.understandingaccounting.org/glossary/m/#multiemployer-plan "A pension or postretirement benefit plan to which two or more unrelated employers contribute, usually pursuant to one or more collective-bargaining agreements. A characteristic of multiemployer plans is that assets contributed by one participating employer may be used to provide benefits to employees of other participating employers since assets contributed by an employer are not segregated in a separate account or restricted to provide benefits only to employees of that employer. A multiemployer plan is usually administered by a board of trustees composed of management and labor representatives and may also be referred to as a joint trust or union plan. Generally, many employers participate in a multiemployer plan, and an employer may participate in more than one plan. The employers participating in multiemployer plans usually have a common industry bond, but for some plans the employers are in different industries and the labor union may be their only common bond. Some multiemployer plans do not involve a union. For example, local chapters of a not-for-profit entity (NFP) may participate in a plan established by the related national organization.") shall recognize as net pension cost or net periodic postretirement benefit cost the required contribution for the period, which shall include both cash and the fair value of noncash contributions, and shall recognize as a liability any unpaid contributions required for the period. ##### [715-80-35-2](https://asc.understandingaccounting.org/asc/715/80/#715-80-35-2) Pending content: no Source downloaded (UTC): 2026-09-10T01:01:32.535Z to 2026-09-10T01:01:32.535Z Record version: sha256:477b71d9f7f99a231beb4fa9d89099ccdf7267d5725f650e9becb7c38ae66de5 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In some situations, withdrawal from a multiemployer plan may result in an employer having an obligation to the plan for a portion of the unfunded benefit obligation of the pension or other postretirement benefit plans. If withdrawal under circumstances that would give rise to an obligation is either probable or reasonably possible, the provisions of Topic 450 shall apply. Source downloaded (UTC): 2026-09-10T01:01:36.483Z to 2026-09-10T01:01:36.483Z Record version: sha256:dbd51bd27222313267606c591f12b729482bda2e49d8945d3d1747b8d52c580e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 715-80-50: 50 Disclosure [Read section](https://asc.understandingaccounting.org/asc/715/80/#50-disclosure) SEC content: no ##### [715-80-50-1](https://asc.understandingaccounting.org/asc/715/80/#715-80-50-1) Pending content: no Source downloaded (UTC): 2026-09-10T01:01:36.483Z to 2026-09-10T01:01:36.483Z Record version: sha256:23a97dd5037378d7af76f8e8e993d20b45b8be8412861eb574644e7995d19728 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2011-09](https://asc.understandingaccounting.org/updates/asu-2011-09/). ##### [715-80-50-2](https://asc.understandingaccounting.org/asc/715/80/#715-80-50-2) Pending content: no Source downloaded (UTC): 2026-09-10T01:01:36.483Z to 2026-09-10T01:01:36.483Z Record version: sha256:0fcdd2ff270e02fd39a53d4c752b9af1b6cf8282b0bf2576c58dd45df2969edb Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An employer shall apply the provisions of Topic 450 to its participation in a [multiemployer plan](https://asc.understandingaccounting.org/glossary/m/#multiemployer-plan "A pension or postretirement benefit plan to which two or more unrelated employers contribute, usually pursuant to one or more collective-bargaining agreements. A characteristic of multiemployer plans is that assets contributed by one participating employer may be used to provide benefits to employees of other participating employers since assets contributed by an employer are not segregated in a separate account or restricted to provide benefits only to employees of that employer. A multiemployer plan is usually administered by a board of trustees composed of management and labor representatives and may also be referred to as a joint trust or union plan. Generally, many employers participate in a multiemployer plan, and an employer may participate in more than one plan. The employers participating in multiemployer plans usually have a common industry bond, but for some plans the employers are in different industries and the labor union may be their only common bond. Some multiemployer plans do not involve a union. For example, local chapters of a not-for-profit entity (NFP) may participate in a plan established by the related national organization.") if it is either probable or reasonably possible that either of the following would occur: 1. a An employer would withdraw from the plan under circumstances that would give rise to an obligation. 2. b An employer's contribution to the fund would be increased during the remainder of the contract period to make up a shortfall in the funds necessary to maintain the negotiated level of benefit coverage (a maintenance of benefits clause). #### Multiemployer Plans That Provide Pension Benefits ##### [715-80-50-3](https://asc.understandingaccounting.org/asc/715/80/#715-80-50-3) Pending content: no Source downloaded (UTC): 2026-09-10T01:01:36.483Z to 2026-09-10T01:01:36.483Z Record version: sha256:7a527311ed68f8d095cf38ce9c1ce35564e8b1b7552f324e719f06804ef1a68d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An employer shall provide the disclosures required by paragraphs [715-80-50-4 through 50-10](https://asc.understandingaccounting.org/asc/715/80/#715-80-50-4) in annual financial statements. The disclosures of the employer's contributions made to the plan in paragraphs 715-80-50-4 through 50-10 include all items recognized as net pension costs (see paragraph [715-80-35-1](https://asc.understandingaccounting.org/asc/715/80/#715-80-35-1)). The disclosures based on _the most recently available_ information shall be the most recently available through the date at which the employer has evaluated subsequent events. ##### [715-80-50-4](https://asc.understandingaccounting.org/asc/715/80/#715-80-50-4) Pending content: no Source downloaded (UTC): 2026-09-10T01:01:36.483Z to 2026-09-10T01:01:36.483Z Record version: sha256:793f23328f780f698f298e26c97fe10ba11ed8a967ab1adc48b84cf0b89a63f5 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An employer that participates in a multiemployer plan that provides [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.") shall provide a narrative description both of the general nature of the multiemployer plans that provide pension benefits and of the employer's participation in the plans that would indicate how the risks of participating in these plans are different from [single-employer plans](https://asc.understandingaccounting.org/glossary/s/#single-employer-plan "A pension plan or other postretirement benefit plan that is maintained by one employer. The term also may be used to describe a plan that is maintained by related parties such as a parent and its subsidiaries."). ##### [715-80-50-5](https://asc.understandingaccounting.org/asc/715/80/#715-80-50-5) Pending content: no Source downloaded (UTC): 2026-09-10T01:01:36.483Z to 2026-09-10T01:01:36.483Z Record version: sha256:044224ec0066026d56dbd12ab671ed88dd2e465c1f6dcc766235a4fe178fa91f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. When feasible, the information required by this paragraph shall be provided in a tabular format. Information that requires greater narrative description may be provided outside the table. For each individually significant multiemployer plan that provides pension benefits, an employer shall disclose the following: 1. a Legal name of the plan. 2. b The plan's Employer Identification Number and, if available, its plan number. 3. c For each statement of financial position presented, the most recently available certified zone status provided by the plan, as currently defined by the Pension Protection Act of 2006 or a subsequent amendment of that Act. The disclosure shall specify the date of the plan's year-end to which the zone status relates and whether the plan has utilized any extended amortization provisions that affect the calculation of the zone status. If the zone status is not available, an employer shall disclose, as of the most recent date available, on the basis of the financial statements provided by the plan, the total plan assets and accumulated benefit obligations, whether the plan was: 1. 1 Less than 65 percent funded 2. 2 Between 65 percent and 80 percent funded 3. 3 At least 80 percent funded. 4. d The expiration date(s) of the collective-bargaining agreement(s) requiring contributions to the plan, if any. If more than one collective-bargaining agreement applies to the plan, the employer shall provide a range of the expiration dates of those agreements, supplemented with a qualitative description that identifies the significant collective-bargaining agreements within that range as well as other information to help investors understand the significance of the collective-bargaining agreements and when they expire (for example, the portion of employees covered by each agreement or the portion of contributions required by each agreement). 5. e For each period that a statement of income (statement of activities for a [not-for-profit entity](https://asc.understandingaccounting.org/glossary/n/#not-for-profit-entity "An entity that possesses the following characteristics, in varying degrees, that distinguish it from a business entity: Contributions of significant amounts of resources from resource providers who do not expect commensurate or proportionate pecuniary return Operating purposes other than to provide goods or services at a profit Absence of ownership interests like those of business entities. Entities that clearly fall outside this definition include the following: All investor-owned entities Entities that provide dividends, lower costs, or other economic benefits directly and proportionately to their owners, members, or participants, such as mutual insurance entities, credit unions, farm and rural electric cooperatives, and employee benefit plans.")) is presented: 1. 1 The employer's contributions made to the plan 2. 2 Whether the employer's contributions represent more than 5 percent of total contributions to the plan as indicated in the plan's most recently available annual report (Form 5500 for U.S. plans). The disclosure shall specify the year-end date of the plan to which the annual report relates. 6. f As of the end of the most recent annual period presented: 1. 1 Whether a funding improvement plan or rehabilitation plan (for example, as those terms are defined by the Employment Retirement Security Act of 1974) had been implemented or was pending 2. 2 Whether the employer paid a surcharge to the plan 3. 3 A description of any minimum contribution(s), required for future periods by the collective-bargaining agreement(s), statutory obligations, or other contractual obligations, if applicable. Factors other than the amount of the employer's contribution to a plan, for example, the severity of the underfunded status of the plan, may need to be considered when determining whether a plan is significant. ##### [715-80-50-6](https://asc.understandingaccounting.org/asc/715/80/#715-80-50-6) Pending content: no Source downloaded (UTC): 2026-09-10T01:01:36.483Z to 2026-09-10T01:01:36.483Z Record version: sha256:95936fb81f2c74bbe80080e4d622cd8ea65d570849b2408d433c6ae4caf2eba7 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An employer shall provide a description of the nature and effect of any significant changes that affect comparability of total employer contributions from period to period, such as: 1. a A business combination or a divestiture 2. b A change in the contractual employer contribution rate 3. c A change in the number of employees covered by the plan during each year. ##### [715-80-50-7](https://asc.understandingaccounting.org/asc/715/80/#715-80-50-7) Pending content: no Source downloaded (UTC): 2026-09-10T01:01:36.483Z to 2026-09-10T01:01:36.483Z Record version: sha256:e37700c98a23c27a73c609c4c356424c6b4cd7ec5f9285286655e1a95842821d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The requirements in paragraph [715-80-50-5](https://asc.understandingaccounting.org/asc/715/80/#715-80-50-5) assume that the other information about the plan is available in the public domain. For example, for U.S. plans, the plan information in Form 5500 is publicly available. In circumstances in which plan level information is not available in the public domain, an employer shall disclose, in addition to the requirements of paragraphs [715-80-50-5 through 50-6](https://asc.understandingaccounting.org/asc/715/80/#715-80-50-5) , the following information about each significant plan: 1. a A description of the nature of the plan benefits 2. b A qualitative description of the extent to which the employer could be responsible for the obligations of the plan, including benefits earned by employees during employment with another employer 3. c Other quantitative information, to the extent available, as of the most recent date available, to help users understand the financial information about the plan, such as total plan assets, actuarial present value of accumulated plan benefits, and total contributions received by the plan. If the quantitative information in paragraph [715-80-50-5(c)](https://asc.understandingaccounting.org/asc/715/80/#715-80-50-5), [715-80-50-5(e)(2)](https://asc.understandingaccounting.org/asc/715/80/#715-80-50-5), or [715-80-50-7(c)](https://asc.understandingaccounting.org/asc/715/80/#715-80-50-7) cannot be obtained without undue cost and effort, that quantitative information may be omitted and the employer shall describe what information has been omitted and why. In that circumstance, the employer also shall provide any qualitative information as of the most recent date available that would help users understand the financial information that otherwise is required to be disclosed about the plan. ##### [715-80-50-8](https://asc.understandingaccounting.org/asc/715/80/#715-80-50-8) Pending content: no Source downloaded (UTC): 2026-09-10T01:01:36.483Z to 2026-09-10T01:01:36.483Z Record version: sha256:c76a2e001fc67662307bd23b58ab294f5e36aed62ebe58953a5f4b3cfc92b70f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Disclosures about multiemployer plans that are subject to the guidance in the preceding paragraph shall be included in a separate section of the tabular disclosure required by paragraph [715-80-50-5](https://asc.understandingaccounting.org/asc/715/80/#715-80-50-5). ##### [715-80-50-9](https://asc.understandingaccounting.org/asc/715/80/#715-80-50-9) Pending content: no Source downloaded (UTC): 2026-09-10T01:01:36.483Z to 2026-09-10T01:01:36.483Z Record version: sha256:cc7dd4be4b6274a7af527fe155c7a151ee6c8a3476b0ef26871906f56054c1fe Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In addition to the information about the significant multiemployer plans that provide pension benefits required by paragraphs [715-80-50-5](https://asc.understandingaccounting.org/asc/715/80/#715-80-50-5) and [715-80-50-7](https://asc.understandingaccounting.org/asc/715/80/#715-80-50-7), an employer shall disclose in a tabular format for each annual period for which a statement of income or statement of activities is presented, both of the following: 1. a Its total contributions made to all plans that are not individually significant 2. b Its total contributions made to all plans. ##### [715-80-50-10](https://asc.understandingaccounting.org/asc/715/80/#715-80-50-10) Pending content: no Source downloaded (UTC): 2026-09-10T01:01:36.483Z to 2026-09-10T01:01:36.483Z Record version: sha256:2a0900391305a45c9a60485e1a7131db9918d901987261dcf0c8e6bcd01d6611 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See Example 1 (paragraph [715-80-55-6](https://asc.understandingaccounting.org/asc/715/80/#715-80-55-6)) for an illustration of the application of the disclosure requirements in paragraphs [715-80-50-4 through 50-9](https://asc.understandingaccounting.org/asc/715/80/#715-80-50-4) ). #### Multiemployer Plans That Provide Postretirement Benefits Other Than Pensions ##### [715-80-50-11](https://asc.understandingaccounting.org/asc/715/80/#715-80-50-11) Pending content: no Source downloaded (UTC): 2026-09-10T01:01:36.483Z to 2026-09-10T01:01:36.483Z Record version: sha256:27f60273f38f35ce9ff6cdc051f34c9b44be7fc9b83835806f96e5b78cf44992 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An employer shall disclose the amount of contributions to multiemployer plans that provide [postretirement benefits other than pensions](https://asc.understandingaccounting.org/glossary/p/#postretirement-benefits-other-than-pensions "See Postretirement Benefits.") for each annual period for which a statement of income or statement of activities is presented. The disclosures shall include a description of the nature and effect of any changes that affect comparability of total employer contributions from period to period, such as: 1. a A business combination or a divestiture 2. b A change in the contractual employer contribution rate 3. c A change in the number of employees covered by the plan during each year. The disclosures also shall include a description of the nature of the benefits and the types of employees covered by these benefits, such as medical benefits provided to active employees and retirees. Source downloaded (UTC): 2026-09-10T01:01:39.176Z to 2026-09-10T01:01:39.176Z Record version: sha256:b95459a3f0860ee70c994f533077c66fb95ceacf5f0844307b667f40c0a681c9 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 715-80-55: 55 Implementation Guidance and Illustrations [Read section](https://asc.understandingaccounting.org/asc/715/80/#55-implementation-guidance-and-illustrations) SEC content: no #### Implementation Guidance ##### [715-80-55-1](https://asc.understandingaccounting.org/asc/715/80/#715-80-55-1) Pending content: no Source downloaded (UTC): 2026-09-10T01:01:39.176Z to 2026-09-10T01:01:39.176Z Record version: sha256:1d294c3e54d1c80f0117b3b706fc3df8b1322c3471a17562467380faadbbd2f7 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 multiemployer pension and other postretirement benefit plans. ##### [715-80-55-2](https://asc.understandingaccounting.org/asc/715/80/#715-80-55-2) Pending content: no Source downloaded (UTC): 2026-09-10T01:01:39.176Z to 2026-09-10T01:01:39.176Z Record version: sha256:2eba398ba2e805ac240529cc057f6ee9dd61bad88f50e56cb9b8399278742f09 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An employer participates in a multiemployer defined benefit pension plan. When the employer enters the plan or improves benefits under the plan, the employer unconditionally promises to pay certain future contributions to the plan and executes an agreement that specifies the amounts of those future contributions. The amounts of those future contributions are calculated based on the plan's prior service cost associated with the participants entering the plan or the improved benefits. In return, the plan unconditionally promises to pay retirement benefits to the employer's covered participants in the plan. The existence of the executed agreement does not require that a liability be reported beyond any contributions currently due and unpaid. ##### [715-80-55-3](https://asc.understandingaccounting.org/asc/715/80/#715-80-55-3) Pending content: no Source downloaded (UTC): 2026-09-10T01:01:39.176Z to 2026-09-10T01:01:39.176Z Record version: sha256:9e79e934b7c2cde6294d3a0103afec3061de1ac118e63e0f18ba00de09d85eb0 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A [multiemployer plan](https://asc.understandingaccounting.org/glossary/m/#multiemployer-plan "A pension or postretirement benefit plan to which two or more unrelated employers contribute, usually pursuant to one or more collective-bargaining agreements. A characteristic of multiemployer plans is that assets contributed by one participating employer may be used to provide benefits to employees of other participating employers since assets contributed by an employer are not segregated in a separate account or restricted to provide benefits only to employees of that employer. A multiemployer plan is usually administered by a board of trustees composed of management and labor representatives and may also be referred to as a joint trust or union plan. Generally, many employers participate in a multiemployer plan, and an employer may participate in more than one plan. The employers participating in multiemployer plans usually have a common industry bond, but for some plans the employers are in different industries and the labor union may be their only common bond. Some multiemployer plans do not involve a union. For example, local chapters of a not-for-profit entity (NFP) may participate in a plan established by the related national organization.") shall not be considered a substantially equivalent replacement plan (a successor plan) for an employer that terminates its single-employer defined benefit pension or other postretirement plan. Acceleration of the recognition as a component of net periodic postretirement benefit cost of prior service cost included in accumulated other comprehensive income would be required. ##### [715-80-55-4](https://asc.understandingaccounting.org/asc/715/80/#715-80-55-4) Pending content: no Source downloaded (UTC): 2026-09-10T01:01:39.176Z to 2026-09-10T01:01:39.176Z Record version: sha256:09efcf22103f6058d70a9fa21a429f449c762c1a0f7222e4ec058b9eafc313f3 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The characteristics and the accounting for a multiemployer plan are sufficiently different from a single-employer plan that neither plan can be a successor plan for the other. The nature of the employer's promise is different in each plan. In a single-employer plan, the employer promises to provide defined benefits. In a multiemployer plan, the employer promises to make a defined contribution. That employees continue to render service is important only if the accounting for a defined benefit plan is being applied, which includes the deferred recognition in earnings of certain items. Because the unit of account is the individual plan, the termination of a single-employer defined benefit plan without replacing it with a successor defined benefit plan concludes the employer's ability to apply defined benefit plan accounting. Therefore, to continue to recognize the prior service cost as a component of net periodic postretirement benefit cost over future periods for the terminated plan in this situation is not appropriate. ##### [715-80-55-5](https://asc.understandingaccounting.org/asc/715/80/#715-80-55-5) Pending content: no Source downloaded (UTC): 2026-09-10T01:01:39.176Z to 2026-09-10T01:01:39.176Z Record version: sha256:d103e3cdffb5b5de22e6f3ec64259c784e502bf3fffca23962ea58c66250e0af Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An employer that has a single-employer postretirement benefit plan decides to provide health care benefits to its retirees through participation with several unrelated employers in a group postretirement health care benefit arrangement that does not result from collective bargaining. The arrangement is administered by an independent board of trustees and provides a uniform level of benefits to all retirees by utilizing group medical insurance contracts. Each participating employer is assessed an annual contribution for its share of insurance premiums, plus administrative costs, and may require its respective retirees to pay a portion of the annual assessment. Retirees whose former employer discontinues paying the annual assessment have the right to continue participation if they assume the cost of the annual premiums needed to maintain their existing benefits. The employer shall not account for this arrangement as a multiemployer plan. A characteristic of a multiemployer plan is that its obligation to retirees continues even if a former employer discontinues its participation in the plan. That characteristic is not present in the arrangement described. #### Illustrations ##### [715-80-55-6](https://asc.understandingaccounting.org/asc/715/80/#715-80-55-6) Pending content: no Source downloaded (UTC): 2026-09-10T01:01:39.176Z to 2026-09-10T01:01:39.176Z Record version: sha256:b80d1b7c9560c06cc501d3ca533ca6eac822a01c3d7ee22e92f0bd2ee9ec0fa2 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Example illustrates certain, but not all, of the disclosure requirements in paragraphs [715-80-50-4 through 50-9](https://asc.understandingaccounting.org/asc/715/80/#715-80-50-4) . ##### [715-80-55-7](https://asc.understandingaccounting.org/asc/715/80/#715-80-55-7) Pending content: no Source downloaded (UTC): 2026-09-10T01:01:39.176Z to 2026-09-10T01:01:39.176Z Record version: sha256:eaa03ea473a98387759c3dd580068d7dcb4510c2ca7e158cfb569c9954686241 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Entity A contributes to a number of multiemployer defined benefit pension plans under the terms of collective-bargaining agreements that cover its union-represented employees. The risks of participating in these multiemployer plans are different from single-employer plans in the following aspects: 1. a Assets contributed to the multiemployer plan by one employer may be used to provide benefits to employees of other participating employers. 2. b If a participating employer stops contributing to the plan, the unfunded obligations of the plan may be borne by the remaining participating employers. 3. c If Entity A chooses to stop participating in some of its multiemployer plans, Entity A may be required to pay those plans an amount based on the underfunded status of the plan, referred to as a withdrawal liability. ##### [715-80-55-8](https://asc.understandingaccounting.org/asc/715/80/#715-80-55-8) Pending content: no Source downloaded (UTC): 2026-09-10T01:01:39.176Z to 2026-09-10T01:01:39.176Z Record version: sha256:384a287088d0f8bedc97ef9e8e30ad6342c9d0e37b497e2305f5c4b61571844a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Entitiy A's participation in these plans for the annual period ended December 31, 20X0, is outlined in the table below. The "EIN/Pension Plan Number" column provides the Employer Identification Number (EIN) and the three-digit plan number, if applicable. Unless otherwise noted, the most recent Pension Protection Act (PPA) zone status available in 20X0 and 20X9 is for the plan's year-end at December 31, 20X9, and December 31, 20X8, respectively. The zone status is based on information that Entity A received from the plan and is certified by the plan's actuary. Among other factors, plans in the red zone are generally less than 65 percent funded, plans in the yellow zone are less than 80 percent funded, and plans in the green zone are at least 80 percent funded. The "FIP/RP Status Pending/Implemented" column indicates plans for which a financial improvement plan (FIP) or a rehabilitation plan (RP) is either pending or has been implemented. The last column lists the expiration date(s) of the collective-bargaining agreement(s) to which the plans are subject. Finally, the number of employees covered by Entity A's multiemployer plans decreased by 5 percent from 20X9 to 20X0, affecting the period-to-period comparability of the contributions for years 20X9 and 20X0. The significant reduction in covered employees corresponded to a reduction in overall business. There have been no significant changes that affect the comparability of 20X8 and 20X9 contributions. - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-74A4889E-1B7B-4185-BCB7-6BCC3D233761-low.gif) "Pension Fund" EIN/Pension Plan Number Pension Protection Act Zone Status FIP/RP Status Pending/ Contributions of Entity A Surcharge "Expiration Date of Collective- Bargaining Agreement" 20X0 20X9 " Implemented" 20X0 20X9 20X8 Imposed ABC Fund 34 32-1899999 Red as of 9/30/2009 Yellow as of 9/30/2008 Pending " $1,883,000 " " $2,309,000 " " $2,226,000 " Yes 12/31/20X3 ABC Fund 37 52-5599999 - 002 Green Yellow No " 3,342,000 " " 3,609,000 " " 3,586,000 " No "12/31/20X2 to 12/31/20X3" (a) ABC Fund 40 92-3499999 Yellow Yellow No " 5,798,000 " " 6,435,000 " " 6,374,000 " No 12/31/20X5 ABC Fund 43 82-4299999 Red Red Pending " 3,539,000 " " 3,234,000 " " 3,218,000 " Yes 12/31/20X4 ABC Fund 46 (b) 82-6899999 Green Green No " 778,000 " " 816,000 " " 833,000 " No 12/31/20X3 ABC Fund 49 52-6199999 Yellow Yellow No " 534,000 " " 547,000 " " 491,000 " No 12/31/20X2 ABC Fund 52 72-8599999 - 001 Red Green Implemented " 1,349,000 " " 1,134,000 " " 1,050,000 " No 12/31/20X5 ABC Fund 55 82-2999999 Green Green No " 1,224,000 " " 1,046,000 " " 1,151,000 " No 12/31/20X4 Plans for which plan financial information is not publicly available outside Entity A's financial statements ABC Fund 61 (c) N/A N/A N/A N/A " 418,000 " " 482,000 " " 491,000 " N/A 12/31/20X2 ABC Fund 73 (d) N/A N/A N/A N/A " 1,872,000 " " 1,764,000 " " 1,693,000 " N/A 12/31/20X2 Other funds " 147,000 " " 160,000 " " 169,000 " Total contributions: " $20,884,000 " " $21,536,000 " " $21,282,000 " (a) "Entity A is party to two significant collective-bargaining agreements that require contributions to ABC Fund 37. Agreements D and E expire on 12/31/20X2, and 12/31/20X3, respectively. Of the two, Agreement D is more significant because 70 percent of Entity A's employee participants in ABC Fund 37 are covered by that agreement. Agreement E also is significant because its participants are involved in multiple projects that Entity A is scheduled to start in 20X4. " (b) "ABC Fund 46 utilized the special 30-year amortization rules provided by Public Law 111-192, Section 211 to amortize its losses from 2008. The plan recertified its zone status after using the amortization provisions of that law. " (c) "Plan information for ABC Fund 61 is not publicly available. ABC Fund 61 provides fixed, monthly retirement payments on the basis of the credits earned by the participating employees. To the extent that the plan is underfunded, the future contributions to the plan may increase and may be used to fund retirement benefits for employees related to other employers who have ceased operations. Entity A could be assessed a withdrawal liability in the event that it decides to cease participating in the plan. ABC Fund 61's financial statements for the years ended June 30, 20X0 and 20X9 indicated total assets of $62,000,000 and $51,000,000, respectively; total actuarial present value of accumulated plan benefits of $120,000,000 and $110,000,000, respectively; and total contributions for all participating employers of $9,000,000 and $8,000,000, respectively. The plan's financial statements for the plan years ended June 30, 20X0 and 20X9 indicate that the plan was less than 65 percent funded in both years." (d) "Plan information for ABC Fund 73 is not publicly available. ABC Fund 73 provides fixed retirement payments on the basis of the credits earned by the participating employees. However, in the event that the plan is underfunded, the monthly benefit amount can be reduced by the trustees of the plan. Entity A is not responsible for the underfunded status of the plan because ABC Fund 73 operates in a jurisdiction that does not require withdrawing participants to pay a withdrawal liability or other penalty. Entity A is unable to provide additional quantitative information on the plan because Entity A is unable to obtain that information without undue cost and effort. The collective-bargaining agreement of ABC Fund 73 requires contributions on the basis of hours worked. The agreement also has a minimum contribution requirement of $1,000,000 each year. " Entity A was listed in its plans' Forms 5500 as providing more than 5 percent of the total contributions for the following plans and plan years: - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-3406A0A0-CD12-41A6-9B1E-AC5F00048321-low.gif) Fund "Year Contributions to Plan Exceeded More Than 5 Percent of Total Contributions (as of December 31 of the Plan's Year-End)" ABC Fund 34 20X9 and 2008 ABC Fund 43 20X8 ABC Fund 52 20X8 ABC Fund 61 20X9 At the date the financial statements were issued, Forms 5500 were not available for the plan years ending in 20X0. Source downloaded (UTC): 2026-09-10T01:01:48.488Z to 2026-09-10T01:01:48.488Z Record version: sha256:8096146efe0c42ac1a65ef323b3edce23ae09029ebe4d0503f2da1b231b3c09d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 715-80-65: 65 Transition and Open Effective Date Information [Read section](https://asc.understandingaccounting.org/asc/715/80/#65-transition-and-open-effective-date-information) SEC content: no ##### [715-80-65-1](https://asc.understandingaccounting.org/asc/715/80/#715-80-65-1) Pending content: no Source downloaded (UTC): 2026-09-10T01:01:48.488Z to 2026-09-10T01:01:48.488Z Record version: sha256:f834448673856657012f8f896c4fa8a74aa60ba664bed4416ce2a238d5921cb4 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Paragraph superseded on 06/17/2013 after the end of the transition period stated in Accounting Standards Update No. 2011-09, _Compensation—Retirement Benefits—Multiemployer Plans (Subtopic 715-80): Disclosures about an Employer's Participation in a Multiemployer Plan_. Source downloaded (UTC): 2026-09-10T01:01:52.388Z to 2026-09-10T01:02:01.309Z Record version: sha256:7f8264f3a50b1d46cf3b1c5935055a65b2fdbd3d17029954f76edda80312ce59 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 715-912: Compensation—Retirement Benefits — Contractors—Federal Government ### Machine-generated study aids ```json { "summary": "ASC 715-912 is the industry-specific overlay applying retirement benefit accounting to government contractors. Its scope mirrors the Contractors—Federal Government Overall Subtopic (912-10-15), and its only substantive requirement is a disclosure consideration: contractors should consider disclosing the effect of the government's rights to any excess pension plan assets if a plan terminates.", "key_points": [ "The Subtopic provides guidance to government contractors on compensation and postretirement employee benefit costs (715-912-05-1).", "Scope and scope exceptions are the same as the Contractors—Federal Government Overall Subtopic in Section 912-10-15 (715-912-15-1).", "Contractors shall consider disclosing the effect, if any, of the government's rights with respect to any excess pension plan assets in the event of a plan termination (715-912-50-1).", "The Subtopic adds no separate recognition or measurement rules; the general pension and OPEB guidance in Topic 715 continues to apply." ], "categories": [ "Disclosure", "Compensation and benefits", "Industry-specific" ], "audience_level": "intermediate", "student_note": "Remember this as a disclosure-only overlay: when a federal contractor's pension plan holds surplus assets, the government may have a claim on that surplus upon termination, and that fact should be disclosed. A common misunderstanding is thinking ASC 715-912 changes how pension cost is measured or reimbursed—it does neither; measurement still follows Topic 715.", "related_topics": [ "912-10", "715-20", "715-30", "715-60", "912-20" ], "key_concepts": [ "government contractors", "excess pension plan assets", "plan termination", "postretirement benefit costs", "government's rights to plan assets", "industry-specific disclosure" ] } ``` Source downloaded (UTC): 2026-09-10T01:01:52.388Z to 2026-09-10T01:01:52.388Z Record version: sha256:2624546b585e62f0446bf30e5ffd4960f68c03d9b16219a5baf27a9a9ad10707 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 715-912-05: 05 Overview and Background [Read section](https://asc.understandingaccounting.org/asc/715/912/#05-overview-and-background) SEC content: no ##### [715-912-05-1](https://asc.understandingaccounting.org/asc/715/912/#715-912-05-1) Pending content: no Source downloaded (UTC): 2026-09-10T01:01:52.388Z to 2026-09-10T01:01:52.388Z Record version: sha256:50588b87019bc5448ea987945badbfe19a9f94590a47f28f530c560801f47378 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subtopic provides guidance to government contractors related to compensation and postretirement employee benefit costs. Source downloaded (UTC): 2026-09-10T01:01:54.519Z to 2026-09-10T01:01:54.519Z Record version: sha256:d343b95ed4cae7a6f1a85c6044b4d0337f14f387363e8cfeff3c52201fefbe66 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 715-912-15: 15 Scope and Scope Exceptions [Read section](https://asc.understandingaccounting.org/asc/715/912/#15-scope-and-scope-exceptions) SEC content: no #### Overall Guidance ##### [715-912-15-1](https://asc.understandingaccounting.org/asc/715/912/#715-912-15-1) Pending content: no Source downloaded (UTC): 2026-09-10T01:01:54.519Z to 2026-09-10T01:01:54.519Z Record version: sha256:b80f5d8d2488c853b5d9f73943886b7ddfa386e66f235c54ead039b2eec1c029 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subtopic follows the same Scope and Scope Exceptions as outlined in the Overall Subtopic, see Section 912-10-15. Source downloaded (UTC): 2026-09-10T01:01:57.705Z to 2026-09-10T01:01:57.705Z Record version: sha256:1c4f62449816c16b28b44b217cf17ddc7cc377c7a32998e1b8628141d884e5a6 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 715-912-50: 50 Disclosure [Read section](https://asc.understandingaccounting.org/asc/715/912/#50-disclosure) SEC content: no #### Contractors' Compensation and Postretirement Employee Benefit Costs ##### [715-912-50-1](https://asc.understandingaccounting.org/asc/715/912/#715-912-50-1) Pending content: no Source downloaded (UTC): 2026-09-10T01:01:57.705Z to 2026-09-10T01:01:57.705Z Record version: sha256:0585f8521b949862fb90d4e836a77963f609ed089da98462a4b9d3f368da80e7 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Contractors shall consider disclosing the effect, if any, of the government's rights with respect to any excess pension plan assets in the event of a plan termination. Source downloaded (UTC): 2026-09-10T01:02:03.426Z to 2026-09-10T01:02:21.382Z Record version: sha256:aca4e8c74759578599a21f60d8b851d8509486fe68931df2de34bb9f6feb10d6 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 715-930: Compensation—Retirement Benefits — Extractive Activities—Mining ### Machine-generated study aids ```json { "summary": "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": [ "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)." ], "categories": [ "Compensation and benefits", "Recognition", "Presentation", "Industry-specific" ], "audience_level": "advanced", "student_note": "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.", "related_topics": [ "450-20", "715-60", "715-80", "930-715", "715-30" ], "key_concepts": [ "coal industry retiree health benefit act", "umwa combined benefit fund", "multiemployer plan", "postretirement health benefits", "assigned and orphan beneficiaries", "loss contingency", "unusual or infrequently occurring item", "accounting policy election" ] } ``` Source downloaded (UTC): 2026-09-10T01:02:03.426Z to 2026-09-10T01:02:03.426Z Record version: sha256:609f501968cc547ffe3427f969c08bbcbe422fa8b6f692e49b5479cf3edf7ae3 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 715-930-00: 00 Status [Read section](https://asc.understandingaccounting.org/asc/715/930/#00-status) SEC content: no ##### [715-930-00-1](https://asc.understandingaccounting.org/asc/715/930/#715-930-00-1) Pending content: no Source downloaded (UTC): 2026-09-10T01:02:03.426Z to 2026-09-10T01:02:03.426Z Record version: sha256:16496e70ba1777d3802a58d2b56beef1504c248857acce43de99c9a9070ede01 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following table identifies the changes made to this Subtopic.
ParagraphActionAccounting Standards UpdateDate
930-715-45-1AmendedAccounting Standards Update No. 2015-0101/09/2015
Source downloaded (UTC): 2026-09-10T01:02:05.051Z to 2026-09-10T01:02:05.051Z Record version: sha256:e516a8a64c7815b1f25b45f63b61e289ab352bc3a53161eba3e4411fe643ffd4 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 715-930-05: 05 Overview and Background [Read section](https://asc.understandingaccounting.org/asc/715/930/#05-overview-and-background) SEC content: no ##### [715-930-05-1](https://asc.understandingaccounting.org/asc/715/930/#715-930-05-1) Pending content: no Source downloaded (UTC): 2026-09-10T01:02:05.051Z to 2026-09-10T01:02:05.051Z Record version: sha256:07d95954938f0c831529667320fd89ecd84bb6cc54b89467cbe99452729d8bee Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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](https://asc.understandingaccounting.org/asc/715/930/#715-930-05-2) Pending content: no Source downloaded (UTC): 2026-09-10T01:02:05.051Z to 2026-09-10T01:02:05.051Z Record version: sha256:d1915a1fb157f62d63041c714b9bbc208fcaa5c378f00ddf60d9b6bd39cf8a75 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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. Source downloaded (UTC): 2026-09-10T01:02:08.906Z to 2026-09-10T01:02:08.906Z Record version: sha256:3f9950c3d285c74b793cee6cd60310d424c60e916ac5072aca849f9206ba2531 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 715-930-15: 15 Scope and Scope Exceptions [Read section](https://asc.understandingaccounting.org/asc/715/930/#15-scope-and-scope-exceptions) SEC content: no #### Overall Guidance ##### [715-930-15-1](https://asc.understandingaccounting.org/asc/715/930/#715-930-15-1) Pending content: no Source downloaded (UTC): 2026-09-10T01:02:08.906Z to 2026-09-10T01:02:08.906Z Record version: sha256:127d8da9046015528d6f8e717080a6ff8f1cc767cb94820adedb8f31ab861d0e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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](https://asc.understandingaccounting.org/asc/715/930/#715-930-15-2) Pending content: no Source downloaded (UTC): 2026-09-10T01:02:08.906Z to 2026-09-10T01:02:08.906Z Record version: sha256:65dab3ed233024e63f0ab1266d4e56f718e1157e2d7d731aa5ef6c868f9b230a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subtopic only applies to entities with operations in the coal industry with a multiemployer pension obligation. Source downloaded (UTC): 2026-09-10T01:02:12.184Z to 2026-09-10T01:02:12.184Z Record version: sha256:3130d9b900eed6b1e2f903d9f4c272529c846fee042317f5b44649d02e997c2a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 715-930-25: 25 Recognition [Read section](https://asc.understandingaccounting.org/asc/715/930/#25-recognition) SEC content: no ##### [715-930-25-1](https://asc.understandingaccounting.org/asc/715/930/#715-930-25-1) Pending content: no Source downloaded (UTC): 2026-09-10T01:02:12.184Z to 2026-09-10T01:02:12.184Z Record version: sha256:dbaa522a28be04fd5520d01862f43a3488099866fb2262d4c27638ebf671a43c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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. Source downloaded (UTC): 2026-09-10T01:02:14.843Z to 2026-09-10T01:02:14.843Z Record version: sha256:9492cca6ce55f3da2882fdafbfba41574c65f3bc921df66e5136f5b70ad8d99c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 715-930-45: 45 Other Presentation Matters [Read section](https://asc.understandingaccounting.org/asc/715/930/#45-other-presentation-matters) SEC content: no ##### [715-930-45-1](https://asc.understandingaccounting.org/asc/715/930/#715-930-45-1) Pending content: no Source downloaded (UTC): 2026-09-10T01:02:14.843Z to 2026-09-10T01:02:14.843Z Record version: sha256:d39dba4d4d41fb4f5b5797337e991ae2f444750130e6a463630e23839ae3905e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If an entity accounts for its obligation under the Act as a loss (see paragraph [930-715-25-1](https://asc.understandingaccounting.org/asc/715/930/#715-930-25-1)) in accordance with Subtopic 450-20, the estimated loss should be reported as an unusual or infrequently occurring item. Source downloaded (UTC): 2026-09-10T01:02:18.613Z to 2026-09-10T01:02:18.613Z Record version: sha256:3de1b5fb5c6fae10eb468a68cd491fdd83d36606d718840de7d955bb1e3e6fa9 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 715-930-50: 50 Disclosure [Read section](https://asc.understandingaccounting.org/asc/715/930/#50-disclosure) SEC content: no ##### [715-930-50-1](https://asc.understandingaccounting.org/asc/715/930/#715-930-50-1) Pending content: no Source downloaded (UTC): 2026-09-10T01:02:18.613Z to 2026-09-10T01:02:18.613Z Record version: sha256:b6513eb418023403a764c8fb15958c597eb4d9dba13bedfa5e8b10718a571f25 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An entity shall disclose the impact of the Act, including the estimated amount of its total obligation and the method of accounting adopted. Source downloaded (UTC): 2026-09-10T01:02:23.996Z to 2026-09-10T01:02:46.650Z Record version: sha256:a8cd844beb77043fabb30b5852a4db90f1981ec30a60cce5c8c29ddc728e4620 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 715-958: Compensation—Retirement Benefits — Not-for-Profit Entities ### Machine-generated study aids ```json { "summary": "This Subtopic adapts Topic 715 (pension and other postretirement benefits) for not-for-profit entities, which do not report other comprehensive income. Everywhere Topic 715 would require net gains or losses, prior service costs or credits, and transition assets or obligations to run through OCI/AOCI, an NFP instead recognizes those amounts as changes in net assets without donor restrictions that have not yet been reclassified into net periodic benefit cost. Those amounts, and the non-service components of net periodic benefit cost, are presented in separate line items outside any intermediate measure of operations (or performance indicator for business-oriented health care NFPs).", "key_points": [ "An NFP applying the recognition provisions of paragraph 715-30-25-4 substitutes 'changes in net assets without donor restrictions arising from a defined benefit plan (or postretirement benefit plan) not yet reclassified as components of net periodic benefit cost' for AOCI references (715-958-25-1).", "The same substitution applies to gains and losses, prior service costs or credits, and transition assets or obligations under Sections 715-30-35 and 715-60-35, and to paragraphs 715-30-35-65, 715-60-35-127, and 715-30-35-25(a) (715-958-35-1 through 35-5).", "Gains and losses not immediately recognized in net periodic pension cost under 715-30-35-21 are recognized in accordance with 958-715-45-1 (715-958-35-6); NFPs not reporting OCI apply 715-30-35-79 through 35-96 in an analogous manner (715-958-35-7).", "The net gain or loss, prior service costs or credits, and transition asset or obligation that would go to OCI are reported as a separate line item or items, apart from expenses, outside an intermediate measure of operations or performance indicator (954-220-45-5), within changes in net assets without donor restrictions (715-958-45-1).", "Amounts previously so recognized are reclassified to net periodic pension cost under 715-30-35-3 through 35-28 or to net periodic postretirement benefit cost under 715-60-35-7 through 35-40, with the contra adjustment reported in the same line item (715-958-45-2).", "Service cost is reported in the same line item(s) as other employee compensation costs (unless capitalized), while the other components defined in 715-30-35-4 and 715-60-35-9 are reported separately and outside any intermediate measure of operations; both are reported by functional expense classification per 958-720-45-2 and 958-720-45-15 (715-958-45-3).", "Disclosures under Section 715-20-50 are made with substitutions: 'changes in net assets without donor restrictions' for OCI/AOCI and results of operations, and 'statement of activities' for 'statement of income' (715-958-50-1)." ], "categories": [ "Compensation and benefits", "Not-for-profit", "Presentation", "Disclosure" ], "audience_level": "intermediate", "student_note": "The whole point of this Subtopic is translation: NFPs have no OCI, so every Topic 715 reference to OCI/AOCI becomes a change in (and cumulative amount within) net assets without donor restrictions. Students commonly confuse the two required separate line items — one for the non-service components of net periodic benefit cost, and a different one for gains/losses, prior service cost, and transition amounts not yet reclassified into that cost.", "related_topics": [ "715-30", "715-60", "715-20", "958-720", "954-220", "220" ], "key_concepts": [ "not-for-profit entity", "net assets without donor restrictions", "net periodic pension cost", "net periodic postretirement benefit cost", "prior service cost or credit", "transition asset or obligation", "intermediate measure of operations", "performance indicator" ] } ``` Source downloaded (UTC): 2026-09-10T01:02:23.996Z to 2026-09-10T01:02:23.996Z Record version: sha256:aff7a60a0008df5aec7c9deb9afc5e37bbb85bb7cc66bc7e2a911a453bf11e63 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 715-958-00: 00 Status [Read section](https://asc.understandingaccounting.org/asc/715/958/#00-status) SEC content: no ##### [715-958-00-1](https://asc.understandingaccounting.org/asc/715/958/#715-958-00-1) Pending content: no Source downloaded (UTC): 2026-09-10T01:02:23.996Z to 2026-09-10T01:02:23.996Z Record version: sha256:3d5210ba7e2d7a24d5611f68b4e0bbf7c7723edb8935ee7052ab1bac491af7e7 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following table identifies the changes made to this Subtopic.
ParagraphActionAccounting Standards UpdateDate
Conditional ContributionAddedAccounting Standards Update No. 2018-0806/21/2018
ContributionAmendedAccounting Standards Update No. 2018-0806/21/2018
ContributionAmendedAccounting Standards Update No. 2010-0701/28/2010
Donor-Imposed ConditionAddedAccounting Standards Update No. 2018-0806/21/2018
Donor-Imposed RestrictionAddedAccounting Standards Update No. 2016-1408/18/2016
Functional ClassificationSupersededAccounting Standards Update No. 2016-1408/18/2016
Functional Expense ClassificationAddedAccounting Standards Update No. 2016-1408/18/2016
Net Assets without Donor RestrictionsAddedAccounting Standards Update No. 2016-1408/18/2016
Promise to GiveAddedAccounting Standards Update No. 2018-0806/21/2018
Unrestricted Net AssetsSupersededAccounting Standards Update No. 2016-1408/18/2016
958-715-25-1AmendedAccounting Standards Update No. 2016-1408/18/2016
958-715-35-1 through 35-5
AmendedAccounting Standards Update No. 2016-1408/18/2016
958-715-45-1AmendedAccounting Standards Update No. 2017-0703/10/2017
958-715-45-1AmendedAccounting Standards Update No. 2016-1408/18/2016
958-715-45-2AmendedAccounting Standards Update No. 2017-0703/10/2017
958-715-45-2AmendedAccounting Standards Update No. 2016-1408/18/2016
958-715-45-3AddedAccounting Standards Update No. 2017-0703/10/2017
958-715-50-1AmendedAccounting Standards Update No. 2018-1408/28/2018
958-715-50-1AmendedAccounting Standards Update No. 2016-1408/18/2016
958-715-55-4AmendedAccounting Standards Update No. 2017-0703/10/2017
958-715-55-4 through 55-8
AmendedAccounting Standards Update No. 2016-1408/18/2016
958-715-55-6AmendedAccounting Standards Update No. 2017-0703/10/2017
958-715-55-7AmendedAccounting Standards Update No. 2017-0703/10/2017
958-715-55-8SupersededAccounting Standards Update No. 2017-0703/10/2017
Source downloaded (UTC): 2026-09-10T01:02:26.533Z to 2026-09-10T01:02:26.533Z Record version: sha256:157331563ea9f274aa20f9f37fe2eec4618036db8a4cb890d9b6f1e490a26bbb Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 715-958-05: 05 Overview and Background [Read section](https://asc.understandingaccounting.org/asc/715/958/#05-overview-and-background) SEC content: no ##### [715-958-05-1](https://asc.understandingaccounting.org/asc/715/958/#715-958-05-1) Pending content: no Source downloaded (UTC): 2026-09-10T01:02:26.533Z to 2026-09-10T01:02:26.533Z Record version: sha256:a966b25fb84ab02ff6fe988d76bca670905a472321c3edda646f9a1468deb079 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subtopic provides accounting and reporting guidance for retirement benefit plans sponsored by [not-for-profit entities](https://asc.understandingaccounting.org/glossary/n/#not-for-profit-entity "An entity that possesses the following characteristics, in varying degrees, that distinguish it from a business entity: Contributions of significant amounts of resources from resource providers who do not expect commensurate or proportionate pecuniary return Operating purposes other than to provide goods or services at a profit Absence of ownership interests like those of business entities. Entities that clearly fall outside this definition include the following: All investor-owned entities Entities that provide dividends, lower costs, or other economic benefits directly and proportionately to their owners, members, or participants, such as mutual insurance entities, credit unions, farm and rural electric cooperatives, and employee benefit plans.") (NFPs). This guidance is essential to the application of Topic 715 by an NFP and shall be applied in conjunction with that Topic. Source downloaded (UTC): 2026-09-10T01:02:28.764Z to 2026-09-10T01:02:28.764Z Record version: sha256:16306cdff951c79aa388888a5ce435909bcec767f99de3e58416dc0b09b26698 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 715-958-15: 15 Scope and Scope Exceptions [Read section](https://asc.understandingaccounting.org/asc/715/958/#15-scope-and-scope-exceptions) SEC content: no #### Overall Guidance ##### [715-958-15-1](https://asc.understandingaccounting.org/asc/715/958/#715-958-15-1) Pending content: no Source downloaded (UTC): 2026-09-10T01:02:28.764Z to 2026-09-10T01:02:28.764Z Record version: sha256:7b5a5ce9b00bda7b8c0485ce09da5293a3cce2bc61d375933f88b7742db13634 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subtopic follows the same Scope and Scope Exceptions as outlined in the Overall Subtopic, see Section 958-10-15, with specific qualifications noted below. #### Transactions ##### [715-958-15-2](https://asc.understandingaccounting.org/asc/715/958/#715-958-15-2) Pending content: no Source downloaded (UTC): 2026-09-10T01:02:28.764Z to 2026-09-10T01:02:28.764Z Record version: sha256:4e189a5d4c598c3bc81b3e941f9bc65c0cf2ba78d1af72c16a893c58f4a128b3 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subtopic applies to the same transactions outlined in Section 715-10-15. Source downloaded (UTC): 2026-09-10T01:02:35.378Z to 2026-09-10T01:02:35.378Z Record version: sha256:1f0acd99f2c40dafd25db10d4dc13aff6ac47c463c4d305acdfe344f48934775 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 715-958-25: 25 Recognition [Read section](https://asc.understandingaccounting.org/asc/715/958/#25-recognition) SEC content: no ##### [715-958-25-1](https://asc.understandingaccounting.org/asc/715/958/#715-958-25-1) Pending content: no Source downloaded (UTC): 2026-09-10T01:02:35.378Z to 2026-09-10T01:02:35.378Z Record version: sha256:0c56ff66ef5edd4fce6aaacedaf91c536017cb057d0c1b1a2a2a084460df079e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. When a [not-for-profit entity](https://asc.understandingaccounting.org/glossary/n/#not-for-profit-entity "An entity that possesses the following characteristics, in varying degrees, that distinguish it from a business entity: Contributions of significant amounts of resources from resource providers who do not expect commensurate or proportionate pecuniary return Operating purposes other than to provide goods or services at a profit Absence of ownership interests like those of business entities. Entities that clearly fall outside this definition include the following: All investor-owned entities Entities that provide dividends, lower costs, or other economic benefits directly and proportionately to their owners, members, or participants, such as mutual insurance entities, credit unions, farm and rural electric cooperatives, and employee benefit plans.") (NFP) applies the recognition provisions of the following paragraph, the references to net gains or losses, prior service costs or credits, and transition asset or obligation in accumulated other comprehensive income shall instead be to the gains or losses, the prior service costs or credits, and the transition asset or obligation that have been recognized as changes in [net assets without donor restrictions](https://asc.understandingaccounting.org/glossary/n/#net-assets-without-donor-restrictions "The part of net assets of a not-for-profit entity that is not subject to donor-imposed restrictions (donors include other types of contributors, including makers of certain grants).") arising from a defined benefit plan (or a postretirement benefit plan) but not yet reclassified as components of net periodic pension cost (or net periodic postretirement benefit cost): 1. a Paragraph [715-30-25-4](https://asc.understandingaccounting.org/asc/715/30/#715-30-25-4). Source downloaded (UTC): 2026-09-10T01:02:37.266Z to 2026-09-10T01:02:37.266Z Record version: sha256:19eaf5eb9e5de18031be8b7a50b01630fee6766ba21a4a68b67161655a1d0498 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 715-958-35: 35 Subsequent Measurement [Read section](https://asc.understandingaccounting.org/asc/715/958/#35-subsequent-measurement) SEC content: no ##### [715-958-35-1](https://asc.understandingaccounting.org/asc/715/958/#715-958-35-1) Pending content: no Source downloaded (UTC): 2026-09-10T01:02:37.266Z to 2026-09-10T01:02:37.266Z Record version: sha256:c037bcd1c82bff4b696d6a2cb10818d4d189648b14ec22889b46cf155ef4761f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. When a [not-for-profit entity](https://asc.understandingaccounting.org/glossary/n/#not-for-profit-entity "An entity that possesses the following characteristics, in varying degrees, that distinguish it from a business entity: Contributions of significant amounts of resources from resource providers who do not expect commensurate or proportionate pecuniary return Operating purposes other than to provide goods or services at a profit Absence of ownership interests like those of business entities. Entities that clearly fall outside this definition include the following: All investor-owned entities Entities that provide dividends, lower costs, or other economic benefits directly and proportionately to their owners, members, or participants, such as mutual insurance entities, credit unions, farm and rural electric cooperatives, and employee benefit plans.") (NFP) applies the subsequent measurement provisions of the following Sections, the references to the prior service costs or credits included in accumulated other comprehensive income shall instead be to the prior service costs or credits that have been recognized as changes in [net assets without donor restrictions](https://asc.understandingaccounting.org/glossary/n/#net-assets-without-donor-restrictions "The part of net assets of a not-for-profit entity that is not subject to donor-imposed restrictions (donors include other types of contributors, including makers of certain grants).") arising from a defined benefit plan (or a postretirement benefit plan) but not yet reclassified as components of net periodic pension cost (or net periodic postretirement benefit cost): 1. a Section 715-30-35 2. b Section 715-60-35. ##### [715-958-35-2](https://asc.understandingaccounting.org/asc/715/958/#715-958-35-2) Pending content: no Source downloaded (UTC): 2026-09-10T01:02:37.266Z to 2026-09-10T01:02:37.266Z Record version: sha256:b24c075658f923cbabe7ff03e912f11ae21c8b5e3afde69e82922a89337553ac Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. When an NFP applies the subsequent measurement guidance in the following Sections, the references to gains and/or losses included in accumulated other comprehensive income shall instead be to the gains and/or losses that have been recognized as changes in net assets without donor restrictions arising from a defined benefit plan (or a postretirement benefit plan) but not yet reclassified as components of net periodic pension cost (or net periodic postretirement benefit cost): 1. a Section 715-30-35 2. b Section 715-60-35. ##### [715-958-35-3](https://asc.understandingaccounting.org/asc/715/958/#715-958-35-3) Pending content: no Source downloaded (UTC): 2026-09-10T01:02:37.266Z to 2026-09-10T01:02:37.266Z Record version: sha256:001148a5c2f78cb6c486e6ecc471f3c5c21d5cca7cdb850ac20032c5e131125a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. When an NFP applies the subsequent measurement provisions of the following Sections, the references to the transition obligation or asset remaining in accumulated other comprehensive income shall instead be to the transition obligation or asset that has been recognized as a change in net assets without donor restrictions arising from a defined benefit plan (or a postretirement benefit plan) but not yet reclassified as a component of net periodic pension cost (or net periodic postretirement benefit cost): 1. a Section 715-30-35 2. b Section 715-60-35. ##### [715-958-35-4](https://asc.understandingaccounting.org/asc/715/958/#715-958-35-4) Pending content: no Source downloaded (UTC): 2026-09-10T01:02:37.266Z to 2026-09-10T01:02:37.266Z Record version: sha256:b7f32ba1060bcdc1d5f84b79571a56bb0c93cdc8828f6c5f6904f017f0560225 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. When an NFP applies the subsequent measurement provisions of the following paragraphs, references to amounts previously recognized in other comprehensive income shall be instead to amounts that have been recognized as a change in net assets without donor restrictions arising from a defined benefit plan (or a postretirement benefit plan) but not yet reclassified as components of net periodic pension cost (or net periodic postretirement benefit cost): 1. a Paragraph [715-30-35-65](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-65) 2. b Paragraph [715-60-35-127](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-127). ##### [715-958-35-5](https://asc.understandingaccounting.org/asc/715/958/#715-958-35-5) Pending content: no Source downloaded (UTC): 2026-09-10T01:02:37.266Z to 2026-09-10T01:02:37.266Z Record version: sha256:b056d29b87e9c0ad459f36ec1faf08d117630b093473020fc6a98046041fcfa1 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. When an NFP applies the subsequent measurement provisions of paragraph [715-30-35-25(a)](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-25), references to the net balance included in accumulated other comprehensive income shall be instead to the net balance that has been recognized as a change in net assets without donor restrictions arising from a defined benefit plan but not yet reclassified as components of net periodic pension cost. ##### [715-958-35-6](https://asc.understandingaccounting.org/asc/715/958/#715-958-35-6) Pending content: no Source downloaded (UTC): 2026-09-10T01:02:37.266Z to 2026-09-10T01:02:37.266Z Record version: sha256:c54c6b2a34465372eb931bdf304a0d82b34e2a8109a4f399b48f9fc7da6621ea Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. When an NFP applies the subsequent measurement guidance in paragraph [715-30-35-21](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-21), the gains and losses that are not recognized immediately as a component of net periodic pension cost shall be recognized in accordance with paragraph [958-715-45-1](https://asc.understandingaccounting.org/asc/715/958/#715-958-45-1). ##### [715-958-35-7](https://asc.understandingaccounting.org/asc/715/958/#715-958-35-7) Pending content: no Source downloaded (UTC): 2026-09-10T01:02:37.266Z to 2026-09-10T01:02:37.266Z Record version: sha256:ac1368ba325d6a4ecc8f98c43e7c9b45b290fc9b67a5da85c920153f789fb5c8 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Not-for-profit employers that do not report other comprehensive income in accordance with the provisions of Topic 220, shall apply the provisions of paragraphs [715-30-35-79 through 35-91](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-79) and [715-30-35-92 through 35-96](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-92) in an analogous manner that is appropriate for their method of reporting financial performance and financial position. Source downloaded (UTC): 2026-09-10T01:02:40.011Z to 2026-09-10T01:02:40.011Z Record version: sha256:4fbe160c2eaa74bc4f889dce450ec6f8fc2ebe08b8bc2c34df537aa4e366e690 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 715-958-45: 45 Other Presentation Matters [Read section](https://asc.understandingaccounting.org/asc/715/958/#45-other-presentation-matters) SEC content: no ##### [715-958-45-1](https://asc.understandingaccounting.org/asc/715/958/#715-958-45-1) Pending content: no Source downloaded (UTC): 2026-09-10T01:02:40.011Z to 2026-09-10T01:02:40.011Z Record version: sha256:cb016aae50644b5f746384d41f8fae10032200b8610852b32de6699411b0d83e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A [not-for-profit entity](https://asc.understandingaccounting.org/glossary/n/#not-for-profit-entity "An entity that possesses the following characteristics, in varying degrees, that distinguish it from a business entity: Contributions of significant amounts of resources from resource providers who do not expect commensurate or proportionate pecuniary return Operating purposes other than to provide goods or services at a profit Absence of ownership interests like those of business entities. Entities that clearly fall outside this definition include the following: All investor-owned entities Entities that provide dividends, lower costs, or other economic benefits directly and proportionately to their owners, members, or participants, such as mutual insurance entities, credit unions, farm and rural electric cooperatives, and employee benefit plans.") (NFP) shall recognize as a separate line item or items, outside an intermediate measure of operations, if one is presented, or a performance indicator as required by paragraph [954-220-45-5](https://asc.understandingaccounting.org/asc/220/954/#220-954-45-5) for NFP business-oriented health care entities, within changes in [net assets without donor restrictions](https://asc.understandingaccounting.org/glossary/n/#net-assets-without-donor-restrictions "The part of net assets of a not-for-profit entity that is not subject to donor-imposed restrictions (donors include other types of contributors, including makers of certain grants)."), apart from expenses, the net gain or loss, the prior service costs or credits, and the transition asset or obligation that would be recognized in other comprehensive income pursuant to the following Sections: 1. a Section 715-30-35 2. b Section 715-60-35. ##### [715-958-45-2](https://asc.understandingaccounting.org/asc/715/958/#715-958-45-2) Pending content: no Source downloaded (UTC): 2026-09-10T01:02:40.011Z to 2026-09-10T01:02:40.011Z Record version: sha256:48153004897401a345fa2d0fca24b4600db47f3dfaef034f8200979f58980942 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An NFP shall reclassify a portion of the net gain or loss, the prior service costs or credits, and the transition asset or obligation previously recognized in accordance with paragraph [958-715-45-1](https://asc.understandingaccounting.org/asc/715/958/#715-958-45-1) as follows: 1. a To net periodic pension cost, pursuant to the recognition and amortization provisions of paragraphs [715-30-35-3 through 35-28](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-3) 2. b To net periodic postretirement benefit cost, pursuant to the recognition and amortization provisions of paragraphs [715-60-35-7 through 35-40](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-7) . The contra adjustment or adjustments to the initially recognized net gain or loss, the prior service costs or credits, and the transition asset or obligation shall be reported in the same line item or items, outside an intermediate measure of operations, if one is presented, or a performance indicator as required by paragraph [954-220-45-5](https://asc.understandingaccounting.org/asc/220/954/#220-954-45-5) for NFP business-oriented health care entities, within changes in net assets without donor restrictions, apart from expenses, as the initially recognized amounts as identified in paragraph [958-715-45-1](https://asc.understandingaccounting.org/asc/715/958/#715-958-45-1). ##### [715-958-45-3](https://asc.understandingaccounting.org/asc/715/958/#715-958-45-3) Pending content: no Source downloaded (UTC): 2026-09-10T01:02:40.011Z to 2026-09-10T01:02:40.011Z Record version: sha256:b9ef317f97fa418f33555ada8b11e0868de424e8b9c4e821e0aa1b901fcf9d2e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An NFP shall report in the statement of activities: 1. a The service cost component of net periodic pension cost and net periodic postretirement benefit cost in the same line item(s) as other compensation costs arising from services rendered by the pertinent employees during the period (except for the amount being capitalized, if appropriate, in connection with production or construction of an asset) 2. b The other components as defined in paragraphs [715-30-35-4](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-4) and [715-60-35-9](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-9) separately from the service cost component and outside an intermediate measure of operations, if one is presented, within changes in net assets without donor restrictions. If a separate line item or items are used to present the other components, that line item or items shall be appropriately described and different from the separate line item or items used to present the net gain or loss, the prior service costs or credits, and the transition asset or obligation that would be recognized in other comprehensive income in accordance with Sections 715-30-35 and 715-60-35. The service cost component and the other components of net periodic pension cost and net periodic postretirement benefit cost shall be reported by [functional expense classification](https://asc.understandingaccounting.org/glossary/f/#functional-expense-classification "A method of grouping expenses according to the purpose for which costs are incurred. The primary functional classifications of a not-for-profit entity are program services and supporting activities.") in accordance with paragraphs [958-720-45-2](https://asc.understandingaccounting.org/asc/720/958/#720-958-45-2) and [958-720-45-15](https://asc.understandingaccounting.org/asc/720/958/#720-958-45-15). Source downloaded (UTC): 2026-09-10T01:02:42.723Z to 2026-09-10T01:02:42.723Z Record version: sha256:5f5cbce102e6b0793888021c9ce0c36d17c66e911b9d2d9b32fd29b08259f17e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 715-958-50: 50 Disclosure [Read section](https://asc.understandingaccounting.org/asc/715/958/#50-disclosure) SEC content: no ##### [715-958-50-1](https://asc.understandingaccounting.org/asc/715/958/#715-958-50-1) Pending content: no Source downloaded (UTC): 2026-09-10T01:02:42.723Z to 2026-09-10T01:02:42.723Z Record version: sha256:fa110e8757ce44b425a23eefb80cc2fbd3cab2190780b02a485f1c72a12e3fa3 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Not-for-profit entities](https://asc.understandingaccounting.org/glossary/n/#not-for-profit-entity "An entity that possesses the following characteristics, in varying degrees, that distinguish it from a business entity: Contributions of significant amounts of resources from resource providers who do not expect commensurate or proportionate pecuniary return Operating purposes other than to provide goods or services at a profit Absence of ownership interests like those of business entities. Entities that clearly fall outside this definition include the following: All investor-owned entities Entities that provide dividends, lower costs, or other economic benefits directly and proportionately to their owners, members, or participants, such as mutual insurance entities, credit unions, farm and rural electric cooperatives, and employee benefit plans.") (NFPs) shall make the following substitutions when applying the disclosure requirements of Section 715-20-50: 1. a The references to the net gain or loss, net prior service cost or credit, and net transition asset or obligation recognized in other comprehensive income in paragraphs [715-20-50-1(i)](https://asc.understandingaccounting.org/asc/715/20/#715-20-50-1) and [715-20-50-5(h)](https://asc.understandingaccounting.org/asc/715/20/#715-20-50-5) shall instead be to such amounts recognized as changes in [net assets without donor restrictions](https://asc.understandingaccounting.org/glossary/n/#net-assets-without-donor-restrictions "The part of net assets of a not-for-profit entity that is not subject to donor-imposed restrictions (donors include other types of contributors, including makers of certain grants).") arising from a defined benefit plan but not yet included in net periodic benefit cost. 2. b The references to reclassification adjustments of other comprehensive income in paragraphs [715-20-50-1(i)](https://asc.understandingaccounting.org/asc/715/20/#715-20-50-1) and [715-20-50-5(h)](https://asc.understandingaccounting.org/asc/715/20/#715-20-50-5) shall instead be to reclassifications to net periodic benefit cost of amounts previously recognized as changes in net assets without donor restrictions arising from a defined benefit plan but not included in net periodic benefit cost when they arose. 3. c The references to the net gain or loss, net prior service cost or credit, and net transition asset or obligation recognized in accumulated other comprehensive income in the following paragraphs shall instead be to such amounts that have been recognized as changes in net assets without donor restrictions arising from a defined benefit plan but not yet reclassified as components of net periodic benefit cost: 1. 1 Paragraph [715-20-50-5(i)](https://asc.understandingaccounting.org/asc/715/20/#715-20-50-5) 2. 2 Paragraph [715-20-50-1(j)](https://asc.understandingaccounting.org/asc/715/20/#715-20-50-1) 3. 3 [Subparagraph superseded by Accounting Standards Update No. 2018-14](https://asc.understandingaccounting.org/updates/asu-2018-14/). 4. 4 [Subparagraph superseded by Accounting Standards Update No. 2018-14](https://asc.understandingaccounting.org/updates/asu-2018-14/). 4. d The references to results of operations (including items of other comprehensive income) in paragraphs [715-20-50-1](https://asc.understandingaccounting.org/asc/715/20/#715-20-50-1) and [715-20-50-5](https://asc.understandingaccounting.org/asc/715/20/#715-20-50-5) shall instead be to changes in net assets without donor restrictions and the references to a statement of income in those paragraphs shall instead be to a statement of activities. Source downloaded (UTC): 2026-09-10T01:02:44.737Z to 2026-09-10T01:02:44.737Z Record version: sha256:51b921576256993641c7ed34c33801f762052eb45b3d27d7a4ab7ccf8c912006 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 715-958-55: 55 Implementation Guidance and Illustrations [Read section](https://asc.understandingaccounting.org/asc/715/958/#55-implementation-guidance-and-illustrations) SEC content: no ##### [715-958-55-1](https://asc.understandingaccounting.org/asc/715/958/#715-958-55-1) Pending content: no Source downloaded (UTC): 2026-09-10T01:02:44.737Z to 2026-09-10T01:02:44.737Z Record version: sha256:6d1c9c4e325ae4b5e117105a7e3265fa4522924194f33b170cec71c7d13e811b 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 to be used by a [not-for-profit entity](https://asc.understandingaccounting.org/glossary/n/#not-for-profit-entity "An entity that possesses the following characteristics, in varying degrees, that distinguish it from a business entity: Contributions of significant amounts of resources from resource providers who do not expect commensurate or proportionate pecuniary return Operating purposes other than to provide goods or services at a profit Absence of ownership interests like those of business entities. Entities that clearly fall outside this definition include the following: All investor-owned entities Entities that provide dividends, lower costs, or other economic benefits directly and proportionately to their owners, members, or participants, such as mutual insurance entities, credit unions, farm and rural electric cooperatives, and employee benefit plans.") (NFP) in reporting its retirement benefit plans. #### Implementation Guidance ##### [715-958-55-2](https://asc.understandingaccounting.org/asc/715/958/#715-958-55-2) Pending content: no Source downloaded (UTC): 2026-09-10T01:02:44.737Z to 2026-09-10T01:02:44.737Z Record version: sha256:1a98acc17ad2551eff0ce7f61fc684ad3623b83874993dfe18d8bc6e13e7fb62 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For reporting by a not-for-profit entity (NFP) that has a defined benefit pension plan that covers employees at the national and all local chapters to which each chapter is required to contribute based on a predetermined formula and for which plan assets are not segregated or restricted on a chapter-by-chapter basis, see paragraph [715-30-55-63](https://asc.understandingaccounting.org/asc/715/30/#715-30-55-63). #### Illustrations ##### [715-958-55-3](https://asc.understandingaccounting.org/asc/715/958/#715-958-55-3) Pending content: no Source downloaded (UTC): 2026-09-10T01:02:44.737Z to 2026-09-10T01:02:44.737Z Record version: sha256:cc37ab79212224abba8fc9b32eb4bab52e0e0abe59d4b13c52be8a446beb30b3 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Example illustrates the guidance in Sections 958-715-35 and 958-715-45. ##### [715-958-55-4](https://asc.understandingaccounting.org/asc/715/958/#715-958-55-4) Pending content: no Source downloaded (UTC): 2026-09-10T01:02:44.737Z to 2026-09-10T01:02:44.737Z Record version: sha256:34c8f8d9f85a3bf2f1d0d38d13ad4b71bc6db14a0ead98974d55c92439a7ba08 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Not-for-Profit Entity A's (NFP A's) actuary prepares a 12-month projection of net periodic pension cost for July 1, 20X7, to June 30, 20X8. The funded status of NFP A's defined benefit pension plan as of June 30, 20X7, and June 30, 20X8, and amounts to be recognized as components of net periodic pension cost are shown in paragraph [958-715-55-5](https://asc.understandingaccounting.org/asc/715/958/#715-958-55-5). The cumulative net loss not yet recognized as a component of net periodic pension cost is less than 10 percent of the greater of the projected benefit obligation and the market-related value of plan assets. No plan amendments affect the period from July 1, 20X7, to June 30, 20X8. Assumptions about benefit payments and [contributions](https://asc.understandingaccounting.org/glossary/c/#contribution "An unconditional transfer of cash or other assets, as well as unconditional promises to give, to an entity or a reduction, settlement, or cancellation of its liabilities in a voluntary nonreciprocal transfer by another entity acting other than as an owner. Those characteristics distinguish contributions from:Exchange transactions, which are reciprocal transfers in which each party receives and sacrifices approximately commensurate valueInvestments by owners and distributions to owners, which are nonreciprocal transfers between an entity and its ownersOther nonreciprocal transfers, such as impositions of taxes or legal judgments, fines, and thefts, which are not voluntary transfers. In a contribution transaction, the resource provider often receives value indirectly by providing a societal benefit although that benefit is not considered to be of commensurate value. In an exchange transaction, the potential public benefits are secondary to the potential direct benefits to the resource provider. The term contribution revenue is used to apply to transactions that are part of the entity's ongoing major or central activities (revenues), or are peripheral or incidental to the entity (gains). See also Inherent Contribution and Conditional Contribution.") made by NFP A have not been included in this Example. During the fiscal year ending June 30, 20X8, NFP A does the following: 1. a Recognizes the additional net loss as a change in [net assets without donor restrictions](https://asc.understandingaccounting.org/glossary/n/#net-assets-without-donor-restrictions "The part of net assets of a not-for-profit entity that is not subject to donor-imposed restrictions (donors include other types of contributors, including makers of certain grants).") and a change in the liability that reflects the underfunded status of the plan 2. b Recognizes the amortization of the transition obligation as a component of net periodic pension cost 3. c Recognizes the amortization of prior service cost as a component of net periodic pension cost 4. d Recognizes net periodic pension cost within the appropriate functional expense categories for 20X8, with the service cost component reported as part of the intermediate measure of operations (for example, increase in net assets from operating activities) and the other components reported in a separate line item, outside the intermediate measure of operations presented by NFP A, within changes in net assets without donor restrictions. ##### [715-958-55-5](https://asc.understandingaccounting.org/asc/715/958/#715-958-55-5) Pending content: no Source downloaded (UTC): 2026-09-10T01:02:44.737Z to 2026-09-10T01:02:44.737Z Record version: sha256:24808ecec820749f9a9513de91ce82cc2c956fe6dcdf159845bbe4d35e66c43b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. These facts are illustrated in the following table. - ![](https://asc.understandingaccounting.org/asc-img/GUID-00F3E019-32A7-4BDD-B829-2E264795C0EE-low.gif) 6/30/X7 6/30/X8 (in thousands) Projected benefit obligation " $(3,670)" " $(3,600)" Plan assets at fair value " 2,510 " " 2,385 " Funded status " $(1,160)" " $(1,215)" Items not yet recognized as a component of net periodic pension cost: Transition obligation $240 $200 Prior service cost 275 175 Net loss 315 365 $830 $740 Components of projected 12 months' net periodic pension cost for fiscal year 20X8: Service cost $110 Interest cost 120 Expected return on plan assets (125) Amortization of prior service cost 100 Amortization of net (gain) loss - Amortization of transition obligation 40 Net periodic pension cost $245 ##### [715-958-55-6](https://asc.understandingaccounting.org/asc/715/958/#715-958-55-6) Pending content: no Source downloaded (UTC): 2026-09-10T01:02:44.737Z to 2026-09-10T01:02:44.737Z Record version: sha256:dcbc81bdb4f6ee51c4ef2cbd33234f3c4ede645997eb169ce14cddee9d943f6e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For the year ending June 30, 20X8, NFP A recognizes the amortizations of the transition obligation and prior service cost as components of net periodic pension cost and recognizes the additional loss arising during the year. The journal entries are as follows: 1. a Recognize the additional loss in net assets without donor restrictions. - ![](https://asc.understandingaccounting.org/asc-img/GUID-15741455-49DE-4F4F-8C3B-FA3454835F1E-low.gif) Net loss not yet recognized in net periodic pension cost 50 Liability for pension benefits 50 2. b Recognize the amortization of the transition obligation in net periodic pension cost. - ![](https://asc.understandingaccounting.org/asc-img/GUID-00C9B11D-4518-4221-A003-C052C08CFFA6-low.gif) "Net periodic pension cost—transition obligation (functionalized)" 40 Transition obligation not yet recognized in net periodic pension cost 40 3. c Recognize the amortization of prior service cost in net periodic pension cost. - ![](https://asc.understandingaccounting.org/asc-img/GUID-E2C73C65-0D1C-461D-8369-78A2CA2D528E-low.gif) "Net periodic pension cost—prior service cost (functionalized)" 100 "Prior service cost not yet recognized in net periodic pension cost" 100 4. d Recognize service cost separately and recognize the interest cost and the expected return on plan assets together in net periodic pension cost. - ![](https://asc.understandingaccounting.org/asc-img/GUID-B13ABB02-0C2A-47EB-87C3-21AC7BE2EB55-low.gif) Net periodic pension cost—service cost (functionalized) 110 Net periodic pension cost—interest cost and expected return on plan assets (functionalized) 5 (b) Liability for pension benefits 105 "(a) Footnote superseded. " (b) Equals $120 interest cost - $125 expected return on plan assets. In its statement of activities, NFP A presents the service cost component by appropriate functional expense categories within the intermediate measure of operations (for example, increase in net assets from operating activities), within changes in net assets without donor restrictions, and presents the other components (encompassing the interest cost, the expected return on plan assets, and the amortizations of the transition obligation and prior service cost) in a separate line item (different from the separate line item discussed below for the items not yet recognized as components of net periodic pension cost) outside the intermediate measure of operations, within changes in net assets without donor restrictions. NFP A presents in a separate line item, outside the intermediate measure of operations, within changes in net assets without donor restrictions, the items (encompassing the net loss arising during the year and the changes in the transition obligation and prior service cost) not yet recognized as components of net periodic pension cost. NFP A would disclose, in the notes to financial statements, the information required by paragraph [958-715-50-1](https://asc.understandingaccounting.org/asc/715/958/#715-958-50-1). NFP A also would disclose, in the notes to financial statements, an analysis of all expenses (including the service cost component and the other components of net periodic pension cost) by their nature and function in accordance with paragraphs [958-720-45-2](https://asc.understandingaccounting.org/asc/720/958/#720-958-45-2) and [958-720-45-15](https://asc.understandingaccounting.org/asc/720/958/#720-958-45-15). ##### [715-958-55-7](https://asc.understandingaccounting.org/asc/715/958/#715-958-55-7) Pending content: no Source downloaded (UTC): 2026-09-10T01:02:44.737Z to 2026-09-10T01:02:44.737Z Record version: sha256:45a825b8f2def05ef2614e405f6bdfb484d48c50e7e36e98e71ccde36dd9d1b0 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following statement of activities reflects how NFP A presents the service cost component and the other components of net periodic pension cost and the items not yet recognized as components of net periodic pension cost in its statement of activities, which presents an intermediate measure of operations. - ![](https://asc.understandingaccounting.org/asc-img/GUID-605828B5-FCAE-4B8B-9D6F-A457325C722B-low.gif) Not-for-Profit Entity A Statement of Activities "Year Ended June 30, 20X8" (in thousands) Without Donor Restrictions With Donor Restrictions Total Operating: "Revenues, gains, and other support:" "Private contributions, other than bequests" " $60,000 " " $14,200 " " $74,200 " Bequests " 17,000 " " 17,000 " Government grants " 9,000 " " 9,000 " "Investment return appropriated by the governing board for operations" " 11,500 " " 1,000 " " 12,500 " Sales of educational materials " 2,000 " " 2,000 " Other " 2,000 " " 2,000 " Net assets released from restrictions " 17,000 " " (17,000)" - "Total revenues, gains, and other support" " 109,500 " " 7,200 " " 116,700 " Expenses: Program services: Research and medical support " 59,000 " " 59,000 " Public education " 9,500 " " 9,500 " Community service " 15,500 " " 15,500 " Total program services " 84,000 " " 84,000 " Supporting services: Fund raising " 15,000 " " 15,000 " Management and general " 9,000 " " 9,000 " Total supporting services " 24,000 " " 24,000 " Total expenses " 108,000 " " 108,000 " Increase in net assets from operating activities " 1,500 " " 7,200 " " 8,700 " Nonoperating: "Investment return, net" " 13,000 " " 1,100 " " 14,100 " "Investment return appropriated by the governing board for operations" " (11,500)" " (1,000)" " (12,500)" Contributions for endowment funds " 15,000 " " 15,000 " Other components of net periodic pension cost (135) (b) (135) "Pension-related changes other than net periodic pension cost" 90 (a) 90 Increase in net assets " 2,955 " " 22,300 " " 25,255 " "Net assets, beginning of year" " 147,110 " " 78,800 " " 225,910 " "Net assets, end of year" " $150,065 " " $101,100 " " $251,165 " "(a) Changes in the pension-related items not yet recognized in net periodic cost were due to $40 amortization of transition obligation, $100 amortization of prior service cost, and $50 net loss." "(b) Equals $40 amortization of transition obligation + $100 amortization of prior service cost + $120 interest cost - $125 expected return on plan assets." ##### [715-958-55-8](https://asc.understandingaccounting.org/asc/715/958/#715-958-55-8) Pending content: no Source downloaded (UTC): 2026-09-10T01:02:44.737Z to 2026-09-10T01:02:44.737Z Record version: sha256:5c3e005e1774f3c7875c1162f20fbeac13b581ea72a3f5022ae2000ebe879433 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/). Source downloaded (UTC): 2026-09-10T01:02:46.650Z to 2026-09-10T01:02:46.650Z Record version: sha256:cb28a9a29d239e641954a1d007640d4ca09d4eaec61335e789ddf968aa011882 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 715-958-65: 65 Transition and Open Effective Date Information [Read section](https://asc.understandingaccounting.org/asc/715/958/#65-transition-and-open-effective-date-information) SEC content: no ##### [715-958-65-1](https://asc.understandingaccounting.org/asc/715/958/#715-958-65-1) Pending content: no Source downloaded (UTC): 2026-09-10T01:02:46.650Z to 2026-09-10T01:02:46.650Z Record version: sha256:e46d6b91ab7518e0adfd70ee10cd703332b8ba87e6697d16a1644c814828c360 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Paragraph superseded on 03/23/2010 after the end of the transition period stated in FASB Statement No. 158, _Employers' Accounting for Defined Benefit Pension and Other Postretirement Plans_, and FSP FAS 158-1. Source downloaded (UTC): 2026-09-10T01:02:48.718Z to 2026-09-10T01:03:11.702Z Record version: sha256:e30c5398aa4902cf36430aa709fb389442cf43923fc3398a4c0b97b04d51437b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 715-980: Compensation—Retirement Benefits — Regulated Operations ### Machine-generated study aids ```json { "summary": "ASC 715-980 tells rate-regulated entities how to account for the difference between net periodic pension cost (715-30) or net periodic postretirement benefit cost (715-60) and the amounts of those costs allowed for rate-making purposes. The regulator's actions create a regulatory asset (deferred cost whose recovery is probable) or a liability (unearned revenue collected for future costs), which changes only the timing of expense recognition, not the underlying 715-30/715-60 measurement. Deferral of 715-60 costs as a regulatory asset is permitted only if strict criteria about the rate order, five-year phase-in, roughly 20-year deferral-recovery period, and non-increasing rate escalation are met.", "key_points": [ "The difference between net periodic pension cost under Subtopic 715-30 and pension cost allowed for rate-making purposes is recognized as an asset or liability created by the actions of the regulator; those actions change only the timing of expense recognition (715-980-25-1).", "An employer with regulated operations must apply 715-30 for financial reporting even if a different method is used to determine allowable pension cost for rate-making purposes (715-980-55-2); the difference is an asset if 980-340-25-1 criteria are met or a liability if the 980-405-25-1(b) situation exists (715-980-55-4).", "No regulatory asset for 715-60 costs may be recorded for a continuing plan if the regulator continues to include other postretirement benefit costs in rates on a pay-as-you-go basis (715-980-25-4).", "For a continuing plan, a regulatory asset for the 715-60 vs. rate-recovery difference is recognized only if recovery of future revenue at least equal to the deferred cost is probable and all four criteria of 715-980-25-5(b) are met: an enabling rate order/policy statement, inclusion of annual 715-60 costs in rates within about five years of adoption, a combined deferral-recovery period not exceeding about 20 years, and scheduled rate increases that do not escalate year over year.", "For discontinued plans (no current service cost), a regulatory asset is recorded if it is probable that future revenue at least equal to the deferred 715-60 costs will be recovered in rates within about 20 years after adoption, and pay-as-you-go rate recovery may continue (715-980-25-7).", "If the 715-980-25-5 criteria are not met initially but are met later, the regulatory asset is recognized in the period the criteria are met (715-980-25-8).", "A regulator cannot eliminate a liability it did not impose, so the requirement to recognize a plan's underfunded status as a liability under 715-30-25-1 through 25-2 is unaffected by regulation (715-980-55-7); disclosure must describe the regulatory treatment, pending regulatory action, deferred 715-60 costs at the balance sheet date, and the expected recovery period (715-980-50-1)." ], "categories": [ "Compensation and benefits", "Industry-specific", "Recognition", "Disclosure" ], "audience_level": "advanced", "student_note": "This is a narrow utility-industry overlay: the pension/OPEB expense in the income statement is still the 715-30/715-60 amount, and the regulator's actions only shift timing via a regulatory asset or unearned-revenue liability. The common misunderstanding is thinking rate-regulated entities may report the rate-making pension cost as their expense, or that a regulator's pay-as-you-go treatment can eliminate the recognized underfunded status of the plan.", "related_topics": [ "980-10", "980-340", "980-405", "715-30", "715-60", "715-20" ], "key_concepts": [ "regulatory asset", "rate-making purposes", "net periodic pension cost", "net periodic postretirement benefit cost", "unearned revenue liability", "probable future rate recovery", "deferral-recovery period", "discontinued plan" ] } ``` Source downloaded (UTC): 2026-09-10T01:02:48.718Z to 2026-09-10T01:02:48.718Z Record version: sha256:90ff48a2088668665f648ba3dacbe53cbc7dc2e0b0660a7117872038f036d407 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 715-980-00: 00 Status [Read section](https://asc.understandingaccounting.org/asc/715/980/#00-status) SEC content: no ##### [715-980-00-1](https://asc.understandingaccounting.org/asc/715/980/#715-980-00-1) Pending content: no Source downloaded (UTC): 2026-09-10T01:02:48.718Z to 2026-09-10T01:02:48.718Z Record version: sha256:4ed53217fbcaf9bba75cd47270545456100012304c2f124f14e146eb32fc0200 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following table identifies the changes made to this Subtopic.
ParagraphActionAccounting Standards UpdateDate
Defined Benefit PlanAddedAccounting Standards Update No. 2014-0603/14/2014
980-715-15-1AmendedAccounting Standards Update No. 2017-0703/10/2017
980-715-45-1AddedAccounting Standards Update No. 2017-0703/10/2017
980-715-55-7AmendedAccounting Standards Update No. 2014-0603/14/2014
980-715-55-10AmendedAccounting Standards Update No. 2017-0703/10/2017
980-715-55-25AmendedAccounting Standards Update No. 2017-0703/10/2017
Source downloaded (UTC): 2026-09-10T01:02:52.334Z to 2026-09-10T01:02:52.334Z Record version: sha256:e3e373ca9a59dad7db887d7313f9948e747310ecb611424765028059db85a584 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 715-980-05: 05 Overview and Background [Read section](https://asc.understandingaccounting.org/asc/715/980/#05-overview-and-background) SEC content: no ##### [715-980-05-1](https://asc.understandingaccounting.org/asc/715/980/#715-980-05-1) Pending content: no Source downloaded (UTC): 2026-09-10T01:02:52.334Z to 2026-09-10T01:02:52.334Z Record version: sha256:e4487404b76fb003b62d27a7ae4423baca07b9816a12122dc048755d8e54e4f2 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subtopic provides guidance for compensation related to pension costs and other postretirement benefit costs for entities with regulated operations. #### Postretirement Pension Cost ##### [715-980-05-2](https://asc.understandingaccounting.org/asc/715/980/#715-980-05-2) Pending content: no Source downloaded (UTC): 2026-09-10T01:02:52.334Z to 2026-09-10T01:02:52.334Z Record version: sha256:f98d7bf6665c6843d7abd4eb3832d4f96030b37d641f64a5699384061905a2cd Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subtopic provides guidance for the difference between net periodic pension cost as defined in Subtopic 715-30 and amounts of pension cost considered for rate-making purposes as an asset or a liability created by the actions of the regulator. #### Other Postretirement Benefit Cost ##### [715-980-05-3](https://asc.understandingaccounting.org/asc/715/980/#715-980-05-3) Pending content: no Source downloaded (UTC): 2026-09-10T01:02:52.334Z to 2026-09-10T01:02:52.334Z Record version: sha256:2c4fbe8057bfaffc1f6e36178912c3d8dd24a33b4fb1a17de890e1ef5d8c812b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subtopic provides guidance for the difference between net periodic postretirement benefit cost as defined in Subtopic 715-60 and amounts of postretirement benefit cost considered for rate-making purposes as an asset or a liability created by the actions of the regulator. Source downloaded (UTC): 2026-09-10T01:02:54.639Z to 2026-09-10T01:02:54.639Z Record version: sha256:76882b100ce62108c88631d07b63c83acfcbba6d7d89978a5e7e65afcb671dac Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 715-980-15: 15 Scope and Scope Exceptions [Read section](https://asc.understandingaccounting.org/asc/715/980/#15-scope-and-scope-exceptions) SEC content: no #### Overall Guidance ##### [715-980-15-1](https://asc.understandingaccounting.org/asc/715/980/#715-980-15-1) Pending content: no Source downloaded (UTC): 2026-09-10T01:02:54.639Z to 2026-09-10T01:02:54.639Z Record version: sha256:d5a952b7128b5cbc803bb474e9bee74c9f724154e04ef7c9e9d4b9d9c2b022fd Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subtopic follows the same Scope and Scope Exceptions as outlined in the Overall Subtopic, see Section 980-10-15. Accordingly, the guidance related to the accounting for regulatory assets related to other postretirement benefit costs (see Subtopic 715-60) is for rate-regulated entities that meet the criteria for applying this Topic. In addition, the provisions of paragraphs [715-30-35-7A](https://asc.understandingaccounting.org/asc/715/30/#715-30-35-7A) and [715-60-35-10A](https://asc.understandingaccounting.org/asc/715/60/#715-60-35-10A) shall not change the accounting for regulatory assets related to postretirement pension cost and other postretirement benefit cost for rate-regulated entities. Source downloaded (UTC): 2026-09-10T01:03:00.783Z to 2026-09-10T01:03:00.783Z Record version: sha256:b5ce7482f7f2981e21544289029d9a7256a0b55eebcf329fb2c642b4b62974fe Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 715-980-25: 25 Recognition [Read section](https://asc.understandingaccounting.org/asc/715/980/#25-recognition) SEC content: no #### Postretirement Pension Cost ##### [715-980-25-1](https://asc.understandingaccounting.org/asc/715/980/#715-980-25-1) Pending content: no Source downloaded (UTC): 2026-09-10T01:03:00.783Z to 2026-09-10T01:03:00.783Z Record version: sha256:dbeac4df65c6b25eceedba7e68273a1f946ca57d3d0c806dd960e70084a2a11b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subtopic requires that the difference between net periodic pension cost as defined in Subtopic 715-30 and amounts of pension cost considered for rate-making purposes be recognized as an asset or a liability created by the actions of the regulator. Those actions of the regulator change the timing of recognition of net pension cost as an expense; they do not otherwise affect the requirements of that Subtopic. ##### [715-980-25-2](https://asc.understandingaccounting.org/asc/715/980/#715-980-25-2) Pending content: no Source downloaded (UTC): 2026-09-10T01:03:00.783Z to 2026-09-10T01:03:00.783Z Record version: sha256:5ed95ca828de4017e7bd959af50827fb1051883dc9fe6687cf6b6d065873d24a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Example 1 (see paragraph [980-715-55-9](https://asc.understandingaccounting.org/asc/715/980/#715-980-55-9)) illustrates accounting for pensions by an employer with regulated operations. #### Other Postretirement Benefit Cost ##### [715-980-25-3](https://asc.understandingaccounting.org/asc/715/980/#715-980-25-3) Pending content: no Source downloaded (UTC): 2026-09-10T01:03:00.783Z to 2026-09-10T01:03:00.783Z Record version: sha256:ac0f8bc59d0e6263714a398f41add3454b9bcb993f5ef7744efa2872ce3c80d3 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For purposes of this Subtopic, other postretirement benefits refer to all forms of benefits, other than pensions, provided by an employer to retirees. ##### [715-980-25-4](https://asc.understandingaccounting.org/asc/715/980/#715-980-25-4) Pending content: no Source downloaded (UTC): 2026-09-10T01:03:00.783Z to 2026-09-10T01:03:00.783Z Record version: sha256:153d7691921001926063b6f4c855f47dc596e4f2632f2c410b470ef12e855241 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For continuing postretirement benefit plans, a regulatory asset related to Subtopic 715-60 costs shall not be recorded if the regulator continues to include other postretirement benefit costs in rates on a pay-as-you-go basis. The application of this Topic requires that a rate-regulated entity's rates be designed to recover the specific entity's costs of providing the regulated service or product. Accordingly, an entity's cost of providing a regulated service or product includes the costs provided for in Subtopic 715-60. ##### [715-980-25-5](https://asc.understandingaccounting.org/asc/715/980/#715-980-25-5) Pending content: no Source downloaded (UTC): 2026-09-10T01:03:00.783Z to 2026-09-10T01:03:00.783Z Record version: sha256:fa4628dea5fdb304a8f0bba42d2badce3c9e9be084c0ea0d335dcded0d5d5088 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For a continuing postretirement benefit plan a rate-regulated entity shall recognize a regulatory asset for the difference between Subtopic 715-60 costs and other postretirement benefit costs included in the entity's rates if the entity does both of the following: 1. a Determines that it is probable that future revenue in an amount at least equal to the deferred cost (regulatory asset) will be recovered in rates 2. b Meets all of the following criteria: 1. 1 The rate-regulated entity's regulator has issued a rate order or issued a policy statement or a generic order applicable to entities within the regulator's jurisdiction that allows both for the deferral of Subtopic 715-60 costs and for the subsequent inclusion of those deferred costs in the entity's rates. 2. 2 The annual Subtopic 715-60 costs (including amortization of the transition obligation) will be included in rates within approximately five years from the date of adoption of that Subtopic. The change to full accrual accounting may take place in steps, but the period for deferring additional amounts shall not exceed approximately five years. 3. 3 The combined deferral-recovery period authorized by the regulator for the regulatory asset shall not exceed approximately 20 years from the date of adoption of Subtopic 715-60. To the extent that the regulator imposes a deferral-recovery period for those costs provided for in Subtopic 715-60 greater than approximately 20 years, any proportionate amount of such costs not recoverable within approximately 20 years shall not be recognized as a regulatory asset. 4. 4 The percentage increase in rates scheduled under the regulatory recovery plan for each future year shall be no greater than the percentage increase in rates scheduled under the plan for each immediately preceding year. This criterion is similar to that required for phase-in plans in paragraph [980-340-25-3(d)](https://asc.understandingaccounting.org/asc/340/980/#340-980-25-3). Recovery of the regulatory asset in rates on a straight-line basis would meet this criterion. ##### [715-980-25-6](https://asc.understandingaccounting.org/asc/715/980/#715-980-25-6) Pending content: no Source downloaded (UTC): 2026-09-10T01:03:00.783Z to 2026-09-10T01:03:00.783Z Record version: sha256:086502ed4c32fa411099017e4e3dfed364cc92da316c78d08361dd19c1bc3cd8 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This guidance applies to rate-regulated entities that elect to immediately recognize their postretirement benefit transition obligation under Subtopic 715-60 as well as those entities that elect to delay the recognition of and amortize their postretirement benefit transition obligation in accordance with that Subtopic. ##### [715-980-25-7](https://asc.understandingaccounting.org/asc/715/980/#715-980-25-7) Pending content: no Source downloaded (UTC): 2026-09-10T01:03:00.783Z to 2026-09-10T01:03:00.783Z Record version: sha256:e7a043b976f65ddd79eca7a780a31a8f308deb486608fd406ae6f93e44627399 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For discontinued plans, a regulatory asset related to Subtopic 715-60 costs shall be recorded if it is probable that future revenue in an amount at least equal to any deferred that Subtopic costs will be recovered in rates within approximately 20 years following the adoption of that Subtopic. Rate recovery during that period may continue on a pay-as-you-go basis. For purposes of this guidance, a discontinued plan is one that results in employees not earning additional benefits for future service (that is, one that has no current service costs). ##### [715-980-25-8](https://asc.understandingaccounting.org/asc/715/980/#715-980-25-8) Pending content: no Source downloaded (UTC): 2026-09-10T01:03:00.783Z to 2026-09-10T01:03:00.783Z Record version: sha256:9f95828b282a56a18739386dab47c1ca723c662554905ee1dcd3bef1142dca48 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If an entity does not initially meet the criteria established in Section 980-715-25 but meets those criteria in a subsequent period, then a regulatory asset related to Subtopic 715-60 costs shall be recognized in the period those criteria are met. Source downloaded (UTC): 2026-09-10T01:03:02.875Z to 2026-09-10T01:03:02.875Z Record version: sha256:4b53c4e1284c6cab40cd526e4ad801a7efac2ead9c773831afdebd64754757f6 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 715-980-45: 45 Other Presentation Matters [Read section](https://asc.understandingaccounting.org/asc/715/980/#45-other-presentation-matters) SEC content: no ##### [715-980-45-1](https://asc.understandingaccounting.org/asc/715/980/#715-980-45-1) Pending content: no Source downloaded (UTC): 2026-09-10T01:03:02.875Z to 2026-09-10T01:03:02.875Z Record version: sha256:977c68142b825a387cc9733bf7dd08c6c305e02e2017b7ed7bb344024c27487e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A rate-regulated entity shall present the amount of net periodic pension cost and net periodic postretirement benefit cost in accordance with the provisions of paragraph [715-20-45-3A](https://asc.understandingaccounting.org/asc/715/20/#715-20-45-3A). Source downloaded (UTC): 2026-09-10T01:03:06.373Z to 2026-09-10T01:03:06.373Z Record version: sha256:db80c11e3ad96a6a30a3625ab1415b41de8b15482a5b7fafd27b1cdea3619889 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 715-980-50: 50 Disclosure [Read section](https://asc.understandingaccounting.org/asc/715/980/#50-disclosure) SEC content: no #### Regulatory Treatment of Postretirement Benefit Costs ##### [715-980-50-1](https://asc.understandingaccounting.org/asc/715/980/#715-980-50-1) Pending content: no Source downloaded (UTC): 2026-09-10T01:03:06.373Z to 2026-09-10T01:03:06.373Z Record version: sha256:358d56be0efaab8400a23e6b70ffd1911d0763a6fee8cf559b04ba9e05011ccc Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. A rate-regulated entity shall disclose in its financial statements a description of the regulatory treatment of postretirement benefit costs, the status of any pending regulatory action, the amount of any Subtopic 715-60 costs deferred as a regulatory asset at the balance sheet date, and the period over which the deferred amounts are expected to be recovered in rates. Source downloaded (UTC): 2026-09-10T01:03:08.836Z to 2026-09-10T01:03:08.836Z Record version: sha256:3aabc5d48d3b4f29e9c40e24527243e2fed607f147f0d199ec9015dafd54ce31 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 715-980-55: 55 Implementation Guidance and Illustrations [Read section](https://asc.understandingaccounting.org/asc/715/980/#55-implementation-guidance-and-illustrations) SEC content: no ##### [715-980-55-1](https://asc.understandingaccounting.org/asc/715/980/#715-980-55-1) Pending content: no Source downloaded (UTC): 2026-09-10T01:03:08.836Z to 2026-09-10T01:03:08.836Z Record version: sha256:c55ef6f8d0adfdb3b0a8d90cbf79d7a8a24d7aa6069d1b43ad735e3501759609 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. All implementation guidance and illustrations assume that the entity meets the criteria of paragraph [980-10-15-2](https://asc.understandingaccounting.org/asc/980/10/#980-10-15-2) for the application of this Topic by the entity; thus recovery of any cost is probable if that cost is designated for future recovery by the regulator. #### Implementation Guidance ##### [715-980-55-2](https://asc.understandingaccounting.org/asc/715/980/#715-980-55-2) Pending content: no Source downloaded (UTC): 2026-09-10T01:03:08.836Z to 2026-09-10T01:03:08.836Z Record version: sha256:3318482c7bfeaf0af0dba78412d29cc6990e27ce9c9d59c0e4163d08b5994b4b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An employer with regulated operations shall account for the effects of applying Subtopic 715-30 for financial reporting purposes even if another method of accounting for pensions is used for determining allowable pension cost for rate-making purposes. ##### [715-980-55-3](https://asc.understandingaccounting.org/asc/715/980/#715-980-55-3) Pending content: no Source downloaded (UTC): 2026-09-10T01:03:08.836Z to 2026-09-10T01:03:08.836Z Record version: sha256:5681e7ffad7fa8123f27280abb9b7e9169bee26db98c57b5938086e0d4f23c9a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. As indicated in paragraph [980-715-25-1](https://asc.understandingaccounting.org/asc/715/980/#715-980-25-1), Subtopic 715-30 applies to employers with regulated operations. ##### [715-980-55-4](https://asc.understandingaccounting.org/asc/715/980/#715-980-55-4) Pending content: no Source downloaded (UTC): 2026-09-10T01:03:08.836Z to 2026-09-10T01:03:08.836Z Record version: sha256:01e30a1cc9157a05699e74ed005e424bda2ecc8c756afaea5759538f628131da Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If this Subtopic applies to the employer, and the amount of net periodic pension cost determined under the method used for rate-making purposes differs from that determined under Subtopic 715-30, the difference would be either of the following: 1. a An asset if the criteria in paragraph [980-340-25-1](https://asc.understandingaccounting.org/asc/340/980/#340-980-25-1) are met 2. b A liability if the situation is as described in paragraph [980-405-25-1(b)](https://asc.understandingaccounting.org/asc/405/980/#405-980-25-1). ##### [715-980-55-5](https://asc.understandingaccounting.org/asc/715/980/#715-980-55-5) Pending content: no Source downloaded (UTC): 2026-09-10T01:03:08.836Z to 2026-09-10T01:03:08.836Z Record version: sha256:af17485072a5476c1e0d6054ee956045850dccde0c0babdbf37f91ca98f88de9 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Usually, continued use of different methods for rate-making purposes and general-purpose external financial reporting purposes would result in either the criteria in paragraph [980-340-25-1](https://asc.understandingaccounting.org/asc/340/980/#340-980-25-1) being met or the situation described in paragraph [980-405-25-1(b)](https://asc.understandingaccounting.org/asc/405/980/#405-980-25-1). However, if pension cost determined in accordance with Subtopic 715-30 exceeds pension cost determined in accordance with the method used in setting current rates, the criteria in paragraph [980-340-25-1](https://asc.understandingaccounting.org/asc/340/980/#340-980-25-1) would not be met if both of the following conditions exist: 1. a It is probable that the regulator soon will accept a change for rate-making purposes so that pension cost is determined in accordance with Subtopic 715-30. 2. b It is not probable that the regulator will provide revenue to recover the excess cost that results from the use of Subtopic 715-30 for financial reporting purposes during the period between the date that the employer adopts that Subtopic and the rate case implementing the change. ##### [715-980-55-6](https://asc.understandingaccounting.org/asc/715/980/#715-980-55-6) Pending content: no Source downloaded (UTC): 2026-09-10T01:03:08.836Z to 2026-09-10T01:03:08.836Z Record version: sha256:67baa743a7fd4bb0cb9e503978586edb87027af7260791d64460fb1649affb69 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Similarly, if pension cost determined in accordance with the method used in setting current rates exceeds pension cost determined in accordance with Subtopic 715-30, the situation would not be as described in paragraph [980-405-25-1(b)](https://asc.understandingaccounting.org/asc/405/980/#405-980-25-1) if it is probable that all of the following conditions exist: 1. a The regulator soon will accept a change for rate-making purposes so that pension cost is determined in accordance with Subtopic 715-30. 2. b The regulator will not hold the employer responsible for the costs that were intended to be recovered by the current rates and that have been deferred by the change in method. 3. c The regulator will provide revenue to recover those same costs when they are eventually recognized under the method required by Subtopic 715-30. ##### [715-980-55-7](https://asc.understandingaccounting.org/asc/715/980/#715-980-55-7) Pending content: no Source downloaded (UTC): 2026-09-10T01:03:08.836Z to 2026-09-10T01:03:08.836Z Record version: sha256:827240165fad63bb84becfb552e3dcff22dbbd019aa3f8ec8bbbeea7d43ca178 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Because a regulator cannot eliminate a liability that was not imposed by its actions, the need to recognize the underfunded status of a [defined benefit 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.)") as a liability under paragraphs [715-30-25-1 through 25-2](https://asc.understandingaccounting.org/asc/715/30/#715-30-25-1) is unaffected by regulation. ##### [715-980-55-8](https://asc.understandingaccounting.org/asc/715/980/#715-980-55-8) Pending content: no Source downloaded (UTC): 2026-09-10T01:03:08.836Z to 2026-09-10T01:03:08.836Z Record version: sha256:d627e81941eaab87dca247251e0201675cee67883c37d7c1d0de8f4517b5f59c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See Example 1 (paragraphs [980-715-55-9](https://asc.understandingaccounting.org/asc/715/980/#715-980-55-9)) for the employer's accounting when paragraphs [980-340-25-1](https://asc.understandingaccounting.org/asc/340/980/#340-980-25-1) and [980-405-25-1(b)](https://asc.understandingaccounting.org/asc/405/980/#405-980-25-1) apply. #### Illustrations ##### [715-980-55-9](https://asc.understandingaccounting.org/asc/715/980/#715-980-55-9) Pending content: no Source downloaded (UTC): 2026-09-10T01:03:08.836Z to 2026-09-10T01:03:08.836Z Record version: sha256:f621411b01d4834a76019cae01a2837d4974fc25dcc71a7a3b359fd3ce80b3cc Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Example illustrates the guidance for recognition of postretirement pension cost in paragraph [980-715-25-1](https://asc.understandingaccounting.org/asc/715/980/#715-980-25-1). ##### [715-980-55-10](https://asc.understandingaccounting.org/asc/715/980/#715-980-55-10) Pending content: no Source downloaded (UTC): 2026-09-10T01:03:08.836Z to 2026-09-10T01:03:08.836Z Record version: sha256:33efb6ed6bff68785f4a70a6bad02a10e11d4ce75b7709aa555dcd0dcbae123b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An employer with regulated operations sponsors a defined benefit pension plan that is accounted for pursuant to Subtopic 715-30. To simplify the Example, it is assumed that there are no remaining differences between amounts previously recognized as net periodic pension cost and amounts allowable for rate-making purposes. The employer's determination of net periodic pension cost under that Subtopic, however, differs from that allowable for rate-making purposes in the timing of recognition of net periodic pension cost as an expense. The following schedule shows the amounts under both bases for the years 20X0-20X3. - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-BA65EB87-B8E3-42E2-AB73-54E8C03530E5-low.gif) Year Net periodic pension cost under Subtopic 715-20 Allowable for Rate-Making Difference for the Period Cumulative Difference 20X0 $120 $200 $(80) $(80) 20X1 200 100 100 20 20X2 170 140 30 50 20X3 120 200 (80) (30) ##### [715-980-55-11](https://asc.understandingaccounting.org/asc/715/980/#715-980-55-11) Pending content: no Source downloaded (UTC): 2026-09-10T01:03:08.836Z to 2026-09-10T01:03:08.836Z Record version: sha256:393d395bf75a8b161c5890372cb2d8bd77aa8313765ebe53ff4f035c22717d4c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In 20X0, the amount allowable for rate-making purposes exceeds net periodic pension cost determined under Subtopic 715-30. In that case, paragraph [980-405-25-1(b)](https://asc.understandingaccounting.org/asc/405/980/#405-980-25-1) requires the amount determined under Subtopic 715-30 ($120) to be recognized as net periodic pension cost in the employer's financial statements. ##### [715-980-55-12](https://asc.understandingaccounting.org/asc/715/980/#715-980-55-12) Pending content: no Source downloaded (UTC): 2026-09-10T01:03:08.836Z to 2026-09-10T01:03:08.836Z Record version: sha256:44dcbcaf6f02e1025e5577fc732beef18554df0dfc63b2c81e6a175bfd46c9b7 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The difference ($80) between net periodic pension cost determined under Subtopic 715-30 ($120) and that allowable for rate-making purposes ($200) is recognized as a liability (unearned revenue) and represents an amount collected or collectible for recovery of future pension cost. When that pension cost is incurred for financial reporting purposes, the liability (unearned revenue) shall be eliminated and revenue shall be recognized. ##### [715-980-55-13](https://asc.understandingaccounting.org/asc/715/980/#715-980-55-13) Pending content: no Source downloaded (UTC): 2026-09-10T01:03:08.836Z to 2026-09-10T01:03:08.836Z Record version: sha256:877d9064bfe2c58bebbddb7c7c656b31bb3ae9166326bc7329a83c8f432f8736 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The journal entries to account for the accrual of net periodic pension cost and the contribution made to the pension plan during the year are as follows. - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-CA314FFC-7CBE-4A43-9ABA-22943F5BE1C4-low.gif) Journal Entry 1 Net periodic pension cost $120 Revenue 80 Pension liability $120 Unearned revenue 80 - To record net periodic pension cost for the period and the liability created by actions of the regulator - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-F12F49A4-9130-460B-B197-472449BFAC1B-low.gif) Journal Entry 2 Pension liability $200 Cash $200 - To record contribution to pension plan ##### [715-980-55-14](https://asc.understandingaccounting.org/asc/715/980/#715-980-55-14) Pending content: no Source downloaded (UTC): 2026-09-10T01:03:08.836Z to 2026-09-10T01:03:08.836Z Record version: sha256:da4dee068b9f109bb2d1b7a5d2874c7b3459a3ab4a99852223c97d3f8bbef8f7 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. No modifications of the disclosure required by paragraph [715-20-50-1(h)](https://asc.understandingaccounting.org/asc/715/20/#715-20-50-1) are required in this case because the accounting required by this Topic does not change the amount of net periodic pension cost recognized under Subtopic 715-30. (See the table in paragraph [980-715-55-10](https://asc.understandingaccounting.org/asc/715/980/#715-980-55-10).) ##### [715-980-55-15](https://asc.understandingaccounting.org/asc/715/980/#715-980-55-15) Pending content: no Source downloaded (UTC): 2026-09-10T01:03:08.836Z to 2026-09-10T01:03:08.836Z Record version: sha256:222eaae5221a66e2d8925a7ae04c0a6a31a8a2c8a4790dcba2a3f64e54188820 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In 20X1, the amount allowable for rate-making purposes is less than net periodic pension cost determined under Subtopic 715-30 by $100. Of that amount, $80 was allowable for rate-making purposes in 20X0. Therefore, the 20X0 unearned revenue of $80 is recognized as revenue for 20X1. Paragraph [980-340-25-1](https://asc.understandingaccounting.org/asc/340/980/#340-980-25-1) requires the remaining portion of the $100 difference ($20) to be capitalized as an [incurred cost](https://asc.understandingaccounting.org/glossary/i/#incurred-cost "A cost arising from cash paid out or obligation to pay for an acquired asset or service, a loss from any cause that has been sustained and has been or must be paid for.") for which future recovery is assured by actions of the regulator. ##### [715-980-55-16](https://asc.understandingaccounting.org/asc/715/980/#715-980-55-16) Pending content: no Source downloaded (UTC): 2026-09-10T01:03:08.836Z to 2026-09-10T01:03:08.836Z Record version: sha256:e8e5c7c12746af8335e84673ca5a749113e27cfbe34c1eb2378d3b0a72aa4fd1 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The journal entries to account for the accrual of net periodic pension cost and the contribution made to the pension plan during the year are as follows. - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-0AD66722-0661-47B7-9983-0E469DC89F3B-low.gif) Journal Entry 1 Net periodic pension cost $180 Capitalized cost for future recovery 20 Unearned revenue 80 Pension liability $200 Revenue 80 - To record net periodic pension cost for the period and the asset created by actions of the regulator - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-19CB1CD8-56CE-425F-B88B-5B3D927B3417-low.gif) Journal Entry 2 Pension liability $100 Cash $100 - To record contribution to pension plan ##### [715-980-55-17](https://asc.understandingaccounting.org/asc/715/980/#715-980-55-17) Pending content: no Source downloaded (UTC): 2026-09-10T01:03:08.836Z to 2026-09-10T01:03:08.836Z Record version: sha256:e2057cafb5151d65614e3cd97f3ef181e7c5aa5bbe5583e3eb5dd62928ecd884 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In this case, the accounting required by this Topic changes the amount of net periodic pension cost that otherwise would have been recognized under Subtopic 715-30 requiring modification of the disclosure required by paragraph [715-20-50-1(h)](https://asc.understandingaccounting.org/asc/715/20/#715-20-50-1). (See the table in paragraph [980-715-55-10](https://asc.understandingaccounting.org/asc/715/980/#715-980-55-10).) ##### [715-980-55-18](https://asc.understandingaccounting.org/asc/715/980/#715-980-55-18) Pending content: no Source downloaded (UTC): 2026-09-10T01:03:08.836Z to 2026-09-10T01:03:08.836Z Record version: sha256:696752f732070d1d2d4e621aef774ac605fe8e92d77d6c7f5e460eed95791ae2 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In 20X2, the amount allowable for rate-making purposes is less than net periodic pension cost determined under Subtopic 715-30 by $30. None of that amount was allowable for rate-making purposes in prior years. Paragraph [980-340-25-1](https://asc.understandingaccounting.org/asc/340/980/#340-980-25-1) requires the $30 to be capitalized as an incurred cost for which future recovery is assured by actions of the regulator. ##### [715-980-55-19](https://asc.understandingaccounting.org/asc/715/980/#715-980-55-19) Pending content: no Source downloaded (UTC): 2026-09-10T01:03:08.836Z to 2026-09-10T01:03:08.836Z Record version: sha256:74bff1078a6cccb33d8395e2c4bfa381b31dd084986ca9b201a899058933473c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The journal entries to account for the accrual of net periodic pension cost and the contribution made to the pension plan during the year are as follows. - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-E25FB726-F308-4415-9133-91E9E84A8F7C-low.gif) Journal Entry 1 Net periodic pension cost $140 Capitalized cost for future recovery 30 Pension liability $170 - To record net periodic pension cost for the period and the asset created by actions of the regulator - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-6687FE66-88B8-4E29-97BA-494E92D28F3D-low.gif) Journal Entry 2 Pension liability $140 Cash $140 - To record contribution to pension plan ##### [715-980-55-20](https://asc.understandingaccounting.org/asc/715/980/#715-980-55-20) Pending content: no Source downloaded (UTC): 2026-09-10T01:03:08.836Z to 2026-09-10T01:03:08.836Z Record version: sha256:754260bd56c9de4293dfb26744aae02725d2cb8de5ea1a672ea9d4577d493113 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The situation in 20X2 is similar to that in 20X1, necessitating additional disclosure. (See the table in paragraph [980-715-55-10](https://asc.understandingaccounting.org/asc/715/980/#715-980-55-10).) ##### [715-980-55-21](https://asc.understandingaccounting.org/asc/715/980/#715-980-55-21) Pending content: no Source downloaded (UTC): 2026-09-10T01:03:08.836Z to 2026-09-10T01:03:08.836Z Record version: sha256:1d038e41807c9a09b9e3819bb47da0a896a1b1787cde2f828590f57f8d5affb5 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In 20X3, the amount allowable for rate-making purposes exceeds net periodic pension cost determined under Subtopic 715-30 by $80. In prior years (20X1 and 20X2), $50 of that amount was recognized as a capitalized cost. ##### [715-980-55-22](https://asc.understandingaccounting.org/asc/715/980/#715-980-55-22) Pending content: no Source downloaded (UTC): 2026-09-10T01:03:08.836Z to 2026-09-10T01:03:08.836Z Record version: sha256:d1cc5fe973022d0cab1d2caf7171d7e48172b60c4583709859d5159b0ed96dcb Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Accordingly, that capitalized cost ($50) is expensed in 20X3. Additionally, paragraph [980-405-25-1](https://asc.understandingaccounting.org/asc/405/980/#405-980-25-1) requires recognition of a liability (unearned revenue) equal to the remaining portion ($30) of the amount allowable for rate-making purposes in excess of net periodic pension cost determined under Subtopic 715-30 \[($200 - $120) - $50 = $30\]. When that pension cost is incurred for financial reporting purposes, the $30 liability (unearned revenue) shall be eliminated and revenue shall be recognized. ##### [715-980-55-23](https://asc.understandingaccounting.org/asc/715/980/#715-980-55-23) Pending content: no Source downloaded (UTC): 2026-09-10T01:03:08.836Z to 2026-09-10T01:03:08.836Z Record version: sha256:ed85aeca734a92205f74001a42c83496394d0802cdcd922846eaa7cc10542aa2 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The journal entries to account for the accrual of net periodic pension cost and the contribution made to the pension plan during the year are as follows. - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-B37C13C8-1163-4AB5-8277-479353ED01EB-low.gif) Journal Entry 1 Net periodic pension cost $170 Revenue 30 Capitalized cost for future recovery $50 Pension liability 120 Unearned revenue 30 - To record net periodic pension cost for the period and the liability created by actions of the regulator - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-234D1171-8393-4D58-A736-05B150732DBF-low.gif) Journal Entry 2 Pension liability $200 Cash $200 - To record contribution to pension plan ##### [715-980-55-24](https://asc.understandingaccounting.org/asc/715/980/#715-980-55-24) Pending content: no Source downloaded (UTC): 2026-09-10T01:03:08.836Z to 2026-09-10T01:03:08.836Z Record version: sha256:b08d86de20911534c54dd10c87cb171188386031af4e7be3eea2f6c0f78c96b1 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The situation in 20X3 is similar to that in 20X1 and 20X2, necessitating additional disclosure. (See the table in paragraph [980-715-55-10](https://asc.understandingaccounting.org/asc/715/980/#715-980-55-10).) ##### [715-980-55-25](https://asc.understandingaccounting.org/asc/715/980/#715-980-55-25) Pending content: no Source downloaded (UTC): 2026-09-10T01:03:08.836Z to 2026-09-10T01:03:08.836Z Record version: sha256:a8ae9ee158444030599bd06a20a0259847f7e39cb979c99d90459793988c1e06 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following illustrates the disclosure of the components of net periodic pension cost for 20X0-20X3. It is assumed that there is no transition asset or obligation remaining in accumulated other comprehensive income and there are no gains or losses for the four-year period. - ![ ](https://asc.understandingaccounting.org/asc-img/GUID-30044AC7-4F9C-4579-971F-AAADAF363CDB-low.gif) 20X0 20X1 20X2 20X3 Service cost (a) $ XXX $ XXX $ XXX $ XXX Interest cost (a) XXX XXX XXX XXX Actual return on plan assets (a) (XXX) (XXX) (XXX) (XXX) Net amortization and deferral - - - - Net periodic pension cost determined under Subtopic 715-20 120 200 170 120 Amount (capitalized) expensed due to actions of the regulator (20) (30) 50 Net periodic pension cost recognized $120 $180 $140 $170 (a) Amounts are excluded for illustrative purposes only.