ASC

ASC 960-30

Net Assets Available for Plan Benefits

960 Plan Accounting—Defined Benefit Pension Plans

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In brief

IntermediatePresentationCompensation and benefitsFinancial statement presentationIndustry-specific

ASC 960-30 governs how a defined benefit pension plan reports its net assets available for benefits and the changes in those net assets. Information must be prepared on the accrual basis and presented in enough detail to identify the plan's resources available for benefits and the significant changes during the year (960-30-25-1; 960-30-45-1). It also prescribes the minimum line items in the statement of changes and the special single-line presentation of assets held in a Section 401(h) account, which may not be counted as available for pension benefits.

Key points (7)
  • Net assets available for benefits information must be prepared using the accrual basis of accounting and presented in reasonable detail to identify resources available for benefits (960-30-25-1).
  • Interest income earned and rebate interest paid from securities lending activity are recorded on the statement of changes in net assets available for benefits (960-30-25-2).
  • At a minimum, changes in net assets must show net appreciation (depreciation) in fair value (including realized gains/losses and unrealized changes), other investment income, employer contributions segregated between cash and noncash (noncash at fair value with nature described), participant contributions, contributions from other sources, benefits paid, payments to insurance entities for excluded contracts, administrative expenses, and other significant changes such as transfers to or from other plans (960-30-45-2).
  • Separate disclosure of realized gains and losses on investments sold during the year is neither required nor proscribed (960-30-45-3).
  • Because 401(h) account assets cannot be used to satisfy pension obligations, they are excluded from total net assets available for pension benefits and shown as a single line item, deducted as a separate line in the liabilities section, with a caption denoting they relate to the health and welfare plan (960-30-45-4 through 45-8).
  • The statement of changes in net assets reports only pension plan changes—not the components of changes in the 401(h) account—except qualified transfers to the 401(h) account and unused/unspent qualified transfer amounts (including allocated income) that should have been but were not returned to the pension plan (960-30-45-9 through 45-10).
  • Plan administrators may use judgment on additional subclassifications, such as separately reporting, netting, or including refunds of terminated employees' contributions (960-30-45-1).

For students. Exam questions here usually test the required minimum line items in the statement of changes and the 401(h) trap: those assets are shown as a single line and deducted as a liability, never included in net assets available for pension benefits, and only qualified transfers (not the account's internal activity) hit the statement of changes.

net assets available for benefitsstatement of changes in net assetsaccrual basis of accountingnet appreciation in fair valueemployer and participant contributions401(h) accountsecurities lending incomebenefits paid

Machine-generated study aid for ASC 960-30. Check the source paragraphs below.

960-30-00Status

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960-30-00-1
The following table identifies the changes made to this Subtopic.
Paragraph Action Accounting Standards Update Date
Benefits Amended Accounting Standards Update No. 2016-19 12/14/2016
Benefits (1st def.) Superseded Accounting Standards Update No. 2014-06 03/14/2014
Benefits (3rd def.) Added Accounting Standards Update No. 2014-06 03/14/2014
Defined Benefit Plan Added Accounting Standards Update No. 2014-06 03/14/2014
Defined Benefit Pension Plan (1st def.) Superseded Accounting Standards Update No. 2014-06 03/14/2014
Pension Benefits (1st def.) Superseded Accounting Standards Update No. 2014-06 03/14/2014
Pension Benefits (2nd def.) Added Accounting Standards Update No. 2014-06 03/14/2014
Plan Assets (2nd def.) Added Accounting Standards Update No. 2014-06 03/14/2014
Sponsor (1st def.) Superseded Accounting Standards Update No. 2014-06 03/14/2014
Sponsor (3rd def.) Added Accounting Standards Update No. 2014-06 03/14/2014
960-30-05-1 Amended Accounting Standards Update No. 2014-06 03/14/2014
960-30-25-1 Amended Accounting Standards Update No. 2014-06 03/14/2014
960-30-45-1 Amended Accounting Standards Update No. 2014-06 03/14/2014
960-30-45-2 Amended Accounting Standards Update No. 2015-12 (Part II) 07/31/2015
960-30-45-2 Amended Accounting Standards Update No. 2014-06 03/14/2014
960-30-45-4 Amended Accounting Standards Update No. 2014-06 03/14/2014
960-30-45-5 Amended Accounting Standards Update No. 2014-06 03/14/2014
960-30-45-10 Amended Accounting Standards Update No. 2014-06 03/14/2014
960-30-45-11 Superseded Accounting Standards Update No. 2017-06 02/27/2017
960-30-50-1 through 50-3
 Superseded Accounting Standards Update No. 2017-06 02/27/2017
960-30-50-1 Amended Accounting Standards Update No. 2015-12 (Part II) 07/31/2015
960-30-50-2 Amended Accounting Standards Update No. 2015-12 (Part II) 07/31/2015

960-30-05Overview and Background

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960-30-05-1
This Subtopic provides guidance on net assets available for plan benefits for defined benefit pension plans.

960-30-15Scope and Scope Exceptions

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Overall Guidance

960-30-15-1
This Subtopic follows the same Scope and Scope Exceptions as outlined in the Overall Subtopic, see Section 960-10-15.

960-30-25Recognition

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Use of Accrual Basis of Accounting

960-30-25-1
The accrual basis of accounting shall be used in preparing information regarding the net assets available for benefits. The information shall be presented in such reasonable detail as is necessary to identify the plan's resources that are available for benefits.

Interest Income and Rebate Interest Paid

960-30-25-2
The interest income earned and rebate interest paid as a result of securities lending activity shall be recorded on the statement of changes in net assets available for benefits.

960-30-45Other Presentation Matters

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Changes in Net Assets Available for Benefits

960-30-45-1
Information regarding changes in net assets available for benefits shall be presented in enough detail to identify the significant changes during the year. This guidance is not intended to limit the amount of detail or manner of presenting information regarding changes in the net asset information. Subclassifications and additional classifications may be useful. For example, separately reporting refunds of terminated employees' contributions may be useful. Alternatively, such refunds may be netted against contributions received from participants or included in benefits paid. Accordingly, plan administrators should use their best judgment in light of the relevant circumstances.
960-30-45-2
Information about changes in net assets available for benefits is intended to present the effects of significant changes in net assets during the year and shall present, at a minimum, all of the following:
  1. a
    The net appreciation (depreciation) in fair value. Net appreciation or depreciation includes realized gains and losses on investments that were both purchased and sold during the period as well as unrealized appreciation or depreciation of the investments held at year-end.
  2. b
    Investment income (exclusive of (a)).
  3. c
    Contributions from the employer, segregated between cash and noncash contributions. A noncash contribution shall be recorded at fair value. The nature of noncash contributions shall be described, either parenthetically or in a note.
  4. d
    Contributions from participants, including those transmitted by the sponsor.
  5. e
    Contributions from other identified sources (for example, state subsidies or federal grants).
  6. f
    Benefits paid to participants.
  7. g
    Payments to insurance entities to purchase contracts that are excluded from plan assets. Paragraph 960-205-50-1(e) requires disclosure of the plan's dividend income related to excluded contracts and permits that income to be netted against this item.
  8. h
    Administrative expenses.
  9. i
    Other changes (for example, transfers of assets to or from other plans) should also be presented if they are significant.
960-30-45-3
Separate disclosure of realized gains and losses on investments sold during the year is neither required nor proscribed.

401(h) Accounts

960-30-45-4
Because 401(h) net assets may not be used to satisfy pension obligations, the total of net assets available for pension benefits shall not include assets held in a 401(h) account related to obligations of the health and welfare benefit plan.
960-30-45-5
The 401(h) account assets less liabilities (net assets of the 401(h) account) are required to be shown in defined benefit pension plan financial statements as a single line item on the face of the statements as illustrated in Example 2 (see paragraph 960-205-55-2).
960-30-45-6
Those net assets related to the 401(h) account also shall be deducted before arriving at the total of net assets available for pension benefits.
960-30-45-7
In deducting those net assets, the amount relating to 401(h) features shall be presented as a separate line item in the liabilities section of the statement of net assets available for pension benefits.
960-30-45-8
The financial statement caption shall clearly denote that the net assets held in the 401(h) account relate to obligations of the health and welfare plan or arrangement.
960-30-45-9
The statement of changes in net assets shall show only the changes in net assets of the pension plan and not any of the components of the changes in the net assets in the 401(h) account.
960-30-45-10
The only amounts that shall be reported in the statement of changes in net assets are qualified transfers to the 401(h) account and/or any unused or unspent amounts (including allocated income) in the 401(h) account at the end of the year that were qualified transfers of excess pension plan assets that should have been but were not transferred back to the defined benefit pension plan.

960-30-50Disclosure

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