# ASC 960-20-35: Plan Accounting—Defined Benefit Pension Plans — Accumulated Plan Benefits — 35 Subsequent Measurement Source: FASB Accounting Standards Codification, Basic View [Read online](https://asc.understandingaccounting.org/asc/960/20/#35-subsequent-measurement) 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): 2026-09-10T02:22:54.913Z to 2026-09-10T02:22:54.913Z Record version: sha256:3cb554be6809093be8f31b923794ef48ba49c0842473edb560fd73d33c0260fd Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 960-20-35: 35 Subsequent Measurement [Read section](https://asc.understandingaccounting.org/asc/960/20/#35-subsequent-measurement) SEC content: no #### Assumptions Used in Determining Benefit Information ##### [960-20-35-1](https://asc.understandingaccounting.org/asc/960/20/#960-20-35-1) Pending content: no Source downloaded (UTC): 2026-09-10T02:22:54.913Z to 2026-09-10T02:22:54.913Z Record version: sha256:00b4c14d4556fb5b8db35814ee907a369650e6f00e1887b09c6dc42eda94b57d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. An assumption of an ongoing plan shall underlie the other assumptions used in determining the [actuarial present value of accumulated plan benefits](https://asc.understandingaccounting.org/glossary/a/#actuarial-present-value-of-accumulated-plan-benefits "The amount as of a benefit information date that results from applying actuarial assumptions to the benefit amounts determined pursuant to paragraphs 960-20-25-3960-20-25-4960-20-25-5 (that is, the accumulated plan benefits), with the actuarial assumptions being used to adjust those amounts to reflect the time value of money (through discounts for interest) and the probability of payment (by means of decrements such as for death, disability, withdrawal, or retirement) between the benefit information date and the expected date of payment."). Every other significant assumption used in that determination and disclosed pursuant to paragraph [960-20-50-8](https://asc.understandingaccounting.org/asc/960/20/#960-20-50-8) shall reflect the best estimate of the plan's future experience solely with respect to that individual assumption. As to certain assumptions, all of the following shall apply: 1. a Assumed rates of return shall reflect the expected rates of return during the periods for which payment of benefits is deferred and shall be consistent with returns realistically achievable on the types of assets held by the plan and the plan's investment policy. To the extent that assumed rates of return are based on values of existing plan assets, the values used in determining assumed rates of return shall be the values presented in the plan's financial statements pursuant to the requirements of the Plan Accounting—Defined Benefit Pension Plans Topic. 2. b Expected rates of inflation assumed in estimating automatic cost-of-living adjustments shall be consistent with the assumed rates of return. 3. c Administrative expenses expected to be paid by the plan (not those paid by the [sponsor](https://asc.understandingaccounting.org/glossary/s/#sponsor "In the case of a pension plan established or maintained by a single employer, the employer; in the case of a plan established or maintained by an employee entity, the employee entity; in the case of a plan established or maintained jointly by two or more employers or by one or more employers and one or more employee entities, the association, committee, joint board of trustees, or other group of representatives of the parties that have established or that maintain the pension plan.")) that are associated with providing accumulated plan benefits shall be reflected either by appropriately adjusting the assumed rates of return or by assigning those expenses to future periods and discounting them to the benefit information date. ##### [960-20-35-1A](https://asc.understandingaccounting.org/asc/960/20/#960-20-35-1A) Pending content: no Source downloaded (UTC): 2026-09-10T02:22:54.913Z to 2026-09-10T02:22:54.913Z Record version: sha256:c360747b5d30ce3a85d036ce753c59455685473c33aa7ceba70fe6703e814036 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. In selecting certain assumptions to be used in determining the actuarial present value of accumulated plan benefits, an acceptable alternative to that discussed in the preceding paragraph is to use those assumptions that are inherent in the estimated cost at the [benefit information date](https://asc.understandingaccounting.org/glossary/b/#benefit-information-date "The date as of which the actuarial present value of accumulated plan benefits is presented.") to obtain a contract with an insurance entity to provide participants with their [accumulated plan benefits](https://asc.understandingaccounting.org/glossary/a/#accumulated-plan-benefits "Future benefit payments that are attributable under the provisions of a pension plan to employees' service rendered to the benefit information date. Accumulated plan benefits comprise benefits expected to be paid to any of the following: Retired or terminated employees or their beneficiaries Beneficiaries of deceased employees Present employees or their beneficiaries."). Those other assumptions that are necessary but are not inherent in that estimated cost shall be selected pursuant to the requirements of the preceding paragraph. ##### [960-20-35-2](https://asc.understandingaccounting.org/asc/960/20/#960-20-35-2) Pending content: no Source downloaded (UTC): 2026-09-10T02:22:54.913Z to 2026-09-10T02:22:54.913Z Record version: sha256:8a1073dd096fea8cae8c4fe9dc68809877c183451b189b6039b7ba0fed4efe3d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For plans below a certain size, that alternative may be preferable to selection of certain assumptions (for example, mortality rates) appropriate for 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.") group because the validity of actuarial assumptions is dependent on the law of large numbers. The use of insurance entity premium rates might also reduce for some plans the cost of implementing this Subtopic. #### Changes in Assumptions ##### [960-20-35-3](https://asc.understandingaccounting.org/asc/960/20/#960-20-35-3) Pending content: no Source downloaded (UTC): 2026-09-10T02:22:54.913Z to 2026-09-10T02:22:54.913Z Record version: sha256:f9f859f4e4a71b0684feb5b3fe3382b0530a7c8282a346b20fba7e8348990b65 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following discusses the consideration of certain factors related to changes in assumptions used to calculate a plan's accumulated [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."). ##### [960-20-35-4](https://asc.understandingaccounting.org/asc/960/20/#960-20-35-4) Pending content: no Source downloaded (UTC): 2026-09-10T02:22:54.913Z to 2026-09-10T02:22:54.913Z Record version: sha256:cc0d243bb78c03202a4d88128b86abf452e8958256b5cdc42330bec373d8918c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Changes in actuarial assumptions made to reflect changes in the plan's expected experience shall be viewed as changes in estimates. That is, the effects of those changes shall be accounted for in the year of change (or in the year of change and future years if the change affects both) and shall not be accounted for by restating amounts reported in financial statements for prior years or by reporting pro forma amounts for prior years. ##### [960-20-35-5](https://asc.understandingaccounting.org/asc/960/20/#960-20-35-5) Pending content: no Source downloaded (UTC): 2026-09-10T02:22:54.913Z to 2026-09-10T02:22:54.913Z Record version: sha256:d7dfab860ffe35b2254b98f5e4e3825c8e13224e5ecde59fcb8ce8272353bab1 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Assumed rates of return used to determine the actuarial present value of accumulated plan benefits may change periodically due to changes in expected rates of return or as changes occur in the factors affecting estimates. A change in assumed rates of return need not necessarily result when a decision is made to replace fixed-income securities currently held with lower-rated fixed-income securities because the higher yield associated with the lower-rated securities reflects increased risk. Accordingly, a higher ultimate return on the aggregate investment portfolio may not result. ##### [960-20-35-6](https://asc.understandingaccounting.org/asc/960/20/#960-20-35-6) Pending content: no Source downloaded (UTC): 2026-09-10T02:22:54.913Z to 2026-09-10T02:22:54.913Z Record version: sha256:871c83d9529326d48a91df60ecacb2d082d01f63011eb4d6b6fb3ae87b47f9b3 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The assumed rates of return required by this Subtopic relate to the periods for which payment of benefits is deferred and therefore encompass the periods on which automatic cost-of-living adjustments are based. Paragraph [960-20-35-10](https://asc.understandingaccounting.org/asc/960/20/#960-20-35-10) discusses a relationship between assumed rates of inflation and assumed rates of return. ##### [960-20-35-7](https://asc.understandingaccounting.org/asc/960/20/#960-20-35-7) Pending content: no Source downloaded (UTC): 2026-09-10T02:22:54.913Z to 2026-09-10T02:22:54.913Z Record version: sha256:c220dcd3a81a003f93a411607b0a209862d4c659c91aa317df8ab269de8340b2 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The determination of assumed rates of return for most plans is, to a significant degree, a matter of judgment. ##### [960-20-35-8](https://asc.understandingaccounting.org/asc/960/20/#960-20-35-8) Pending content: no Source downloaded (UTC): 2026-09-10T02:22:54.913Z to 2026-09-10T02:22:54.913Z Record version: sha256:6002db17ccf25b867638919c87dd47ce80a39daa3498595c9b170b1c898421c1 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Thus, various factors shall be considered in estimating rates of return to be used in determining the actuarial present value of accumulated plan benefits. Among them are the following: 1. a Rates of return expected from investments currently held or available in the marketplace 2. b Rates of return expected from the reinvestment of actual returns from those investments 3. c The investment policy of the plan, including the diversity of investments currently held and expected to be held in the future. ##### [960-20-35-9](https://asc.understandingaccounting.org/asc/960/20/#960-20-35-9) Pending content: no Source downloaded (UTC): 2026-09-10T02:22:54.913Z to 2026-09-10T02:22:54.913Z Record version: sha256:aa9d9066188addc5f0e4c706e03d7e39e63b8696e69ad7ee0097062c6f44e161 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Accordingly, accumulated plan benefits will generally not be discounted solely at rates of return expected on existing investments, and changes in assumed rates of return will probably not equal the change during the reporting period in either short-term or long-term interest rates. A factor to consider in assessing the extent to which short-term and long-term interest rates should impact assumed rates of return is the degree to which the timing of cash inflows from related existing or potential investments matches the timing of payments of accumulated plan benefits. However, to the extent that assumed rates of return are affected by the rates of return expected from existing investments, this Subtopic requires that those expected rates be based on the values presented for those investments in the plan's financial statements. Further, the assumed rates of return at which accumulated plan benefits are discounted shall be reconsidered in light of changes in the fair values of investments between one period and another. ##### [960-20-35-10](https://asc.understandingaccounting.org/asc/960/20/#960-20-35-10) Pending content: no Source downloaded (UTC): 2026-09-10T02:22:54.913Z to 2026-09-10T02:22:54.913Z Record version: sha256:6447f854c93b0242f9a9d88144b26ed81d69d3880e43f2cab723f2751ce29bdf Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subtopic requires that assumed rates of inflation used in measuring benefits attributable to automatic cost-of-living adjustments be consistent with those inherent in assumed rates of return. If an automatic cost-of-living adjustment is subject to a maximum annual percentage increase (sometimes referred to as a cap), the assumed rate of benefit increase may differ from the assumed rate of inflation. ##### [960-20-35-11](https://asc.understandingaccounting.org/asc/960/20/#960-20-35-11) Pending content: no Source downloaded (UTC): 2026-09-10T02:22:54.913Z to 2026-09-10T02:22:54.913Z Record version: sha256:ac6c409c26c425701be0bf0cb6fa992154cda05740d142bd4922eeb24048267b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [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.") are not paid unless employees live to retirement, and they cease upon death unless there is a coannuitant, as in the case of a joint and survivor option. Therefore, accumulated plan benefits shall be adjusted to reflect participants' longevity. ##### [960-20-35-12](https://asc.understandingaccounting.org/asc/960/20/#960-20-35-12) Pending content: no Source downloaded (UTC): 2026-09-10T02:22:54.913Z to 2026-09-10T02:22:54.913Z Record version: sha256:fbf8437b56070b85524b53d19a27f495389fbdd8e9aa49ca068649713a301aaf Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For reasons other than death or disability, employees may cease rendering [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."). If they do so before their pension benefits become fully vested, some or all of those benefits (depending on the plan's vesting provision) are forfeited. ##### [960-20-35-13](https://asc.understandingaccounting.org/asc/960/20/#960-20-35-13) Pending content: no Source downloaded (UTC): 2026-09-10T02:22:54.913Z to 2026-09-10T02:22:54.913Z Record version: sha256:885d13beb308832ab6578088b61e0deecf8803180209634136e4986487c61711 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Nonrecognition of future withdrawals would overstate the benefits reasonably expected to become payable. Consideration of future withdrawals is also consistent with consideration of future service in determining employees' expected eligibility for increased benefits. ##### [960-20-35-14](https://asc.understandingaccounting.org/asc/960/20/#960-20-35-14) Pending content: no Source downloaded (UTC): 2026-09-10T02:22:54.913Z to 2026-09-10T02:22:54.913Z Record version: sha256:11df38f5bd09c0080ca9cfa9c7f8146e41bb52b570ed4b6953afab606bedf581 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The selection of assumed rates of return at which to discount accumulated plan benefits is designed to present the net assets and [benefit information](https://asc.understandingaccounting.org/glossary/b/#benefit-information "The actuarial present value of accumulated plan benefits.") on comparable bases and is independent of the plan's benefit formula. ##### [960-20-35-15](https://asc.understandingaccounting.org/asc/960/20/#960-20-35-15) Pending content: no Source downloaded (UTC): 2026-09-10T02:22:54.913Z to 2026-09-10T02:22:54.913Z Record version: sha256:50842fcaf5d3b4cd16d20a17a447c5b6e72d9ac8b7899273e0ac02eded2881ac Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Because administrative expenses are incurred when making benefit payments, those expenses shall be considered in determining the benefit information. However, in similar circumstances, their use results in the disclosure (pursuant to paragraph [960-20-50-8](https://asc.understandingaccounting.org/asc/960/20/#960-20-50-8)) of different rates of return. See paragraph [960-20-35-1(c)](https://asc.understandingaccounting.org/asc/960/20/#960-20-35-1) for alternate methods of reflecting administrative expenses in the determination of benefit information. #### Use of Averages or Reasonable Approximations ##### [960-20-35-16](https://asc.understandingaccounting.org/asc/960/20/#960-20-35-16) Pending content: no Source downloaded (UTC): 2026-09-10T02:22:54.913Z to 2026-09-10T02:22:54.913Z Record version: sha256:f2f2e63dd491c1a6b523f8095fb71f335a759380ae716db396a8571d3b9722e6 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The literal application of certain of the requirements of the Plan Accounting—Defined Benefit Pension Plans Topic could require a degree of detail in recordkeeping and computation that might be unduly burdensome. Accordingly, the use of averages or other methods of approximation is appropriate, provided the results obtained are substantially the same as the results contemplated by this Topic. ##### [960-20-35-17](https://asc.understandingaccounting.org/asc/960/20/#960-20-35-17) Pending content: no Source downloaded (UTC): 2026-09-10T02:22:54.913Z to 2026-09-10T02:22:54.913Z Record version: sha256:5056128681f52dbce719b45575b7168307214ebb861c86c73f94ae4de294e13d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Thus, rolling back to the beginning of the year or projecting to the end of the year detailed [employee](https://asc.understandingaccounting.org/glossary/e/#employee "A person who has rendered or is presently rendering service.") service-related data as of a date within the year may be acceptable in approximating beginning- or end-of-year [benefit information](https://asc.understandingaccounting.org/glossary/b/#benefit-information "The actuarial present value of accumulated plan benefits."). It is expected that only in unusual circumstances will projecting the data collected during a triennial valuation to a [benefit information date](https://asc.understandingaccounting.org/glossary/b/#benefit-information-date "The date as of which the actuarial present value of accumulated plan benefits is presented.") in a subsequent year satisfy the criterion of providing results that are substantially the same as those that would be obtained using data as of that latter date. An example of such unusual circumstances might be a small plan with a stable participant population. ##### [960-20-35-18](https://asc.understandingaccounting.org/asc/960/20/#960-20-35-18) Pending content: no Source downloaded (UTC): 2026-09-10T02:22:54.913Z to 2026-09-10T02:22:54.913Z Record version: sha256:2ee6cbfd66b408fa59f207e69023507c8de7137a7138c2f5c04d29d604365900 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The use of averages and other methods of approximation consistent with recommended actuarial practice may be useful in conjunction with other provisions of the Plan Accounting—Defined Benefit Pension Plans Topic, particularly if applied to plans sponsored by small employers.