{"schema_version":2,"canonical_url":"https://asc.understandingaccounting.org/asc/962/40/","source":"FASB Accounting Standards Codification, Basic View","usage":"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.","number":"962-40","topic":"962","title":"Terminating Plans","area":"Industry","paragraphs":7,"summary":"ASC 962-40 governs the accounting and reporting by defined contribution pension plans that are terminating. Its core rule is that once liquidation of the plan is deemed imminent under ASC 205-30, the plan must prepare its financial statements—including year-end statements for a plan year in which imminence arose before year end—on the liquidation basis of accounting. The plan must also disclose the relevant circumstances in all subsequent financial statements once a termination decision is made or a wasting trust exists.","concepts":["terminating plan","liquidation basis of accounting","liquidation imminent","wasting trust","defined contribution pension plan","plan financial statements","termination disclosure"],"categories":["Compensation and benefits","Presentation","Disclosure","Industry-specific"],"level":"intermediate","topic_title":"Plan Accounting—Defined Contribution Pension Plans","sections":[{"number":"00","label":"00 Status","anchor":"00-status","is_sec":false,"groups":[{"block":null,"heading":null,"paragraphs":[{"citation":"962-40-00-1","para":"00-1","html":"<div class=\"asc-body\"><div class=\"norm-text\">The following table identifies the changes made to this Subtopic.</div><div class=\"norm-text\"><table class=\"asc-table\" id=\"SL29650533-196259\"><tr><td class=\"entry\"><strong class=\"ph b\">Paragraph</strong></td><td class=\"entry\"><strong class=\"ph b\">Action</strong></td><td class=\"entry\"><strong class=\"ph b\">Accounting Standards Update</strong></td><td class=\"entry\"><strong class=\"ph b\">Date</strong></td></tr><tr><td class=\"entry\"></td><td class=\"entry\"></td><td class=\"entry\"></td><td class=\"entry\"></td></tr><tr><td class=\"entry\"><a href=\"/glossary/b/#benefits\" class=\"term\" title=\"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.\"><span>Benefits</span></a></td><td class=\"entry\">Amended</td><td class=\"entry\"><a href=\"/updates/asu-2016-19/\" class=\"xref\">Accounting Standards Update No. 2016-19</a></td><td class=\"entry\">12/14/2016</td></tr><tr><td class=\"entry\"><a href=\"/glossary/b/#benefits\" class=\"term\" title=\"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.\"><span>Benefits</span></a> (3rd def.)</td><td class=\"entry\">Added</td><td class=\"entry\"><a href=\"/updates/asu-2014-06/\" class=\"xref\">Accounting Standards Update No. 2014-06</a></td><td class=\"entry\">03/14/2014</td></tr><tr><td class=\"entry\"><a href=\"/glossary/d/#defined-contribution-plan\" class=\"term\" title=\"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.\"><span>Defined Contribution Plan</span></a></td><td class=\"entry\">Amended</td><td class=\"entry\"><a href=\"/updates/asu-2014-06/\" class=\"xref\">Accounting Standards Update No. 2014-06</a></td><td class=\"entry\">03/14/2014</td></tr><tr><td class=\"entry\"><a href=\"/glossary/l/#liquidation\" class=\"term\" title=\"The process by which an entity converts its assets to cash or other assets and settles its obligations with creditors in anticipation of the entity ceasing all activities. Upon cessation of the entity's activities, any remaining cash or other assets are distributed to the entity's investors or other claimants (albeit sometimes indirectly). Liquidation may be compulsory or voluntary. Dissolution of an entity as a result of that entity being acquired by another entity or merged into another entity in its entirety and with the expectation of continuing its business does not qualify as liquidation.\"><span>Liquidation</span></a></td><td class=\"entry\">Added</td><td class=\"entry\"><a href=\"/updates/asu-2013-07/\" class=\"xref\">Accounting Standards Update No. 2013-07</a></td><td class=\"entry\">04/22/2013</td></tr><tr><td class=\"entry\"></td><td class=\"entry\"></td><td class=\"entry\"></td><td class=\"entry\"></td></tr><tr><td class=\"entry\"><a href=\"/asc/962/40/#962-40-25-1\" class=\"xref\">962-40-25-1</a></td><td class=\"entry\">Amended</td><td class=\"entry\"><a href=\"/updates/asu-2013-07/\" class=\"xref\">Accounting Standards Update No. 2013-07</a></td><td class=\"entry\">04/22/2013</td></tr><tr><td class=\"entry\"><a href=\"/asc/962/40/#962-40-25-2\" class=\"xref\">962-40-25-2</a></td><td class=\"entry\">Amended</td><td class=\"entry\"><a href=\"/updates/asu-2013-07/\" class=\"xref\">Accounting Standards Update No. 2013-07</a></td><td class=\"entry\">04/22/2013</td></tr><tr><td class=\"entry\"><a href=\"/asc/962/40/#962-40-35-1\" class=\"xref\">962-40-35-1</a></td><td class=\"entry\">Superseded</td><td class=\"entry\"><a href=\"/updates/asu-2013-07/\" class=\"xref\">Accounting Standards Update No. 2013-07</a></td><td class=\"entry\">04/22/2013</td></tr><tr><td class=\"entry\"><a href=\"/asc/962/40/#962-40-35-1\" class=\"xref\">962-40-35-1</a></td><td class=\"entry\">Amended</td><td class=\"entry\"><a href=\"/updates/asu-2012-04/\" class=\"xref\">Accounting Standards Update No. 2012-04</a></td><td class=\"entry\">10/01/2012</td></tr><tr><td class=\"entry\"><a href=\"/asc/962/40/#962-40-50-1\" class=\"xref\">962-40-50-1</a></td><td class=\"entry\">Amended</td><td class=\"entry\"><a href=\"/updates/asu-2014-06/\" class=\"xref\">Accounting Standards Update No. 2014-06</a></td><td class=\"entry\">03/14/2014</td></tr></table></div></div>","snippet":"The following table identifies the changes made to this Subtopic.\nParagraph | Action | Accounting Standards Update | Date |\n| | | |\nBenefits | Amended | Accounting Standards Update No. 2016-19 | 12/14/2016 |\nBenefits (3r…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:687ca2397ee725aa5ea95ee97f095b46fa26b43a4c8683b7ffe337cfc406afcc","downloaded_from":"2026-09-10T02:24:05.891Z","last_downloaded_at":"2026-09-10T02:24:05.891Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479546","source_sha256":"3a73e13a1730fda56385153dce6e142713089b5cc78f4a4338d07726b1eb56ba"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:4763a996f8a664cdb7b55f9eb321438b7469066d1826b213e3b35eecff90a1df","downloaded_from":"2026-09-10T02:24:05.891Z","last_downloaded_at":"2026-09-10T02:24:05.891Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479546","source_sha256":"3a73e13a1730fda56385153dce6e142713089b5cc78f4a4338d07726b1eb56ba"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:dc864dc2c8d2ba08123553f310a8584396aada2ba0fe6bd1f4563f7ed1a37c85","downloaded_from":"2026-09-10T02:24:05.891Z","last_downloaded_at":"2026-09-10T02:24:05.891Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479546","source_sha256":"3a73e13a1730fda56385153dce6e142713089b5cc78f4a4338d07726b1eb56ba"}},{"number":"05","label":"05 Overview and Background","anchor":"05-overview-and-background","is_sec":false,"groups":[{"block":null,"heading":null,"paragraphs":[{"citation":"962-40-05-1","para":"05-1","html":"<div class=\"asc-body\"><div class=\"norm-text\">This Subtopic provides guidance for <a href=\"/glossary/d/#defined-contribution-plan\" class=\"term\" title=\"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.\"><span>defined contribution plans</span></a> that are <a href=\"/glossary/t/#terminating-plan\" class=\"term\" title=\"All plans about which a termination decision has been made regardless of whether the terminating plan will be replaced.\"><span>terminating plans</span></a>.</div></div>","snippet":"This Subtopic provides guidance for defined contribution plans that are terminating plans.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:030be0c0e16794ed84ec8f1456cd2c7a58ada0ac2da63b25ce68576554763ff6","downloaded_from":"2026-09-10T02:24:08.912Z","last_downloaded_at":"2026-09-10T02:24:08.912Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479809","source_sha256":"8bd955ccf16f9f1fe48e89ac4c657d932a1a4e43f99d3a66d0532ff1829dc189"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:193c3e90fb24ef25eacbc4e5fe7c19fe526cf18ad37f21dad68d82456c2c2310","downloaded_from":"2026-09-10T02:24:08.912Z","last_downloaded_at":"2026-09-10T02:24:08.912Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479809","source_sha256":"8bd955ccf16f9f1fe48e89ac4c657d932a1a4e43f99d3a66d0532ff1829dc189"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:a6470ee2a72a484f6399fe6928411a5741a0e979bf098ffd26142a1f6a1c778e","downloaded_from":"2026-09-10T02:24:08.912Z","last_downloaded_at":"2026-09-10T02:24:08.912Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479809","source_sha256":"8bd955ccf16f9f1fe48e89ac4c657d932a1a4e43f99d3a66d0532ff1829dc189"}},{"number":"15","label":"15 Scope and Scope Exceptions","anchor":"15-scope-and-scope-exceptions","is_sec":false,"groups":[{"block":null,"heading":"Overall Guidance","paragraphs":[{"citation":"962-40-15-1","para":"15-1","html":"<div class=\"asc-body\"><div class=\"norm-text\">This Subtopic follows the same Scope and Scope Exceptions as outlined in the Overall Subtopic (see Section <a altsource=\"GUID-91233ACD-0FD7-44D9-BC0C-0AA6D0A2369A.ditamap\" class=\"ditamap\">962-10-15</a>).</div></div>","snippet":"This Subtopic follows the same Scope and Scope Exceptions as outlined in the Overall Subtopic (see Section 962-10-15).","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:9e9295ad04e273f549f9977845120533a90cf1cd6c3994d1071f0a73e992bb29","downloaded_from":"2026-09-10T02:24:11.898Z","last_downloaded_at":"2026-09-10T02:24:11.898Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479779","source_sha256":"e4f2783bea5b779bcfc931a6521b4fb60fcede1e2ce5cf9c797d8307f88bfc3e"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:d9d1a4ac940a778e48a06030879ff11ae00fb4b512a8c7a3494cfa129c82af56","downloaded_from":"2026-09-10T02:24:11.898Z","last_downloaded_at":"2026-09-10T02:24:11.898Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479779","source_sha256":"e4f2783bea5b779bcfc931a6521b4fb60fcede1e2ce5cf9c797d8307f88bfc3e"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:6590df25acddea371459ab4065e4ffdcdfbbbbe39e26ff64fc3c376fe6bd7c57","downloaded_from":"2026-09-10T02:24:11.898Z","last_downloaded_at":"2026-09-10T02:24:11.898Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479779","source_sha256":"e4f2783bea5b779bcfc931a6521b4fb60fcede1e2ce5cf9c797d8307f88bfc3e"}},{"number":"25","label":"25 Recognition","anchor":"25-recognition","is_sec":false,"groups":[{"block":null,"heading":null,"paragraphs":[{"citation":"962-40-25-1","para":"25-1","html":"<div class=\"asc-body\"><div class=\"norm-text\"><span class=\"sfragment\" id=\"sfr_1FA8741E-6E94-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">If the <a href=\"/glossary/l/#liquidation\" class=\"term\" title=\"The process by which an entity converts its assets to cash or other assets and settles its obligations with creditors in anticipation of the entity ceasing all activities. Upon cessation of the entity's activities, any remaining cash or other assets are distributed to the entity's investors or other claimants (albeit sometimes indirectly). Liquidation may be compulsory or voluntary. Dissolution of an entity as a result of that entity being acquired by another entity or merged into another entity in its entirety and with the expectation of continuing its business does not qualify as liquidation.\"><span>liquidation</span></a> of a plan is deemed to be imminent (as defined in paragraph <a href=\"/asc/205/30/#205-30-25-2\" class=\"xref\">205-30-25-2</a>) before the end of the plan year, the plan's year-end financial statements shall be prepared using the liquidation basis of accounting in accordance with Subtopic <a altsource=\"GUID-F0CE4D19-6B2D-4FC1-8D41-8831E94834AC.ditamap\" class=\"ditamap\">205-30</a>. </span></span></div></div>","snippet":"If the liquidation of a plan is deemed to be imminent (as defined in paragraph 205-30-25-2) before the end of the plan year, the plan's year-end financial statements shall be prepared using the liquidation basis of accou…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:cbe038aadf80639fb7c586f959f70d26f09fd7f92b4a711f35021ec4c69ef793","downloaded_from":"2026-09-10T02:24:16.921Z","last_downloaded_at":"2026-09-10T02:24:16.921Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479750","source_sha256":"f377878e871bf94d2dd3d88b77b972f85905f3d80b636fc489ba9f944cba4f01"}},{"citation":"962-40-25-2","para":"25-2","html":"<div class=\"asc-body\"><div class=\"norm-text\"><span class=\"sfragment\" id=\"sfr_1FA87533-6E94-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">Plan financial statements for periods ending after the determination that liquidation is imminent are prepared using the liquidation basis of accounting. </span></span></div></div>","snippet":"Plan financial statements for periods ending after the determination that liquidation is imminent are prepared using the liquidation basis of accounting.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:f64175242158ca4a1ea35008aba246d59c9679891f4b03d574cf8f0b196a3eef","downloaded_from":"2026-09-10T02:24:16.921Z","last_downloaded_at":"2026-09-10T02:24:16.921Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval 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class=\"xref\">Paragraph superseded by Accounting Standards Update No. 2013-07</a>.</div></div>","snippet":"Paragraph superseded by Accounting Standards Update No. 2013-07.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:ab1d0f38fe4c9eb531532013240b6a8d743d7292431a3486ab0e6e0d81aadf7e","downloaded_from":"2026-09-10T02:24:19.666Z","last_downloaded_at":"2026-09-10T02:24:19.666Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval 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id=\"sfr_1FC871E4-6E94-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">When the decision has been made to terminate a plan or when a wasting trust (that is, a plan under which participants no longer accrue <a href=\"/glossary/b/#benefits\" class=\"term\" title=\"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.\"><span>benefits</span></a> but that will remain in existence as long as necessary to pay already accrued benefits) exists, the relevant circumstances shall be disclosed in all subsequent financial statements issued by the plan.</span></span></div></div>","snippet":"When the decision has been made to terminate a plan or when a wasting trust (that is, a plan under which participants no longer accrue benefits but that will remain in existence as long as necessary to pay already accrue…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:649a86b3520cc25a00a4dc2c874e724f3f1dd2f826f377197532bd42ccf72d02","downloaded_from":"2026-09-10T02:24:22.185Z","last_downloaded_at":"2026-09-10T02:24:22.185Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479684","source_sha256":"49af761b2c9d9aa4c9bf644e4ca6c76d0d159ef122b896adb42909ed8d56b902"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:412fa9ea051cbf576544904f36e069af5f45bad5a9a5791ed6556b6f7d14a258","downloaded_from":"2026-09-10T02:24:22.185Z","last_downloaded_at":"2026-09-10T02:24:22.185Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479684","source_sha256":"49af761b2c9d9aa4c9bf644e4ca6c76d0d159ef122b896adb42909ed8d56b902"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:bc76ae0847ac343b62d17d09115388385d8b33f2aea64389c2c36ffe6043b179","downloaded_from":"2026-09-10T02:24:22.185Z","last_downloaded_at":"2026-09-10T02:24:22.185Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147479684","source_sha256":"49af761b2c9d9aa4c9bf644e4ca6c76d0d159ef122b896adb42909ed8d56b902"}}],"enrichment":{"summary":"ASC 962-40 governs the accounting and reporting by defined contribution pension plans that are terminating. Its core rule is that once liquidation of the plan is deemed imminent under ASC 205-30, the plan must prepare its financial statements—including year-end statements for a plan year in which imminence arose before year end—on the liquidation basis of accounting. The plan must also disclose the relevant circumstances in all subsequent financial statements once a termination decision is made or a wasting trust exists.","key_points":["This Subtopic applies to defined contribution plans that are terminating plans (962-40-05-1) and follows the scope of Subtopic 962-10 (962-40-15-1).","If liquidation of the plan is deemed imminent, as defined in 205-30-25-2, before the end of the plan year, the year-end financial statements shall be prepared using the liquidation basis of accounting under Subtopic 205-30 (962-40-25-1).","Plan financial statements for all periods ending after the determination that liquidation is imminent are prepared on the liquidation basis (962-40-25-2).","When a decision to terminate the plan has been made, or when a wasting trust exists (participants no longer accrue benefits but the plan continues until accrued benefits are paid), the relevant circumstances shall be disclosed in all subsequent plan financial statements (962-40-50-1).","Former subsequent-measurement guidance at 962-40-35-1 was superseded by ASU 2013-07, which relocated liquidation-basis measurement to Subtopic 205-30."],"categories":["Compensation and benefits","Presentation","Disclosure","Industry-specific"],"audience_level":"intermediate","student_note":"Exam questions turn on the trigger: it is not the decision to terminate but the point at which liquidation becomes \"imminent\" under 205-30-25-2 that forces the liquidation basis—and if that point falls before plan year end, the year-end statements themselves must use it. A common misunderstanding is assuming a wasting trust automatically requires liquidation-basis accounting; it only triggers the disclosure requirement in 962-40-50-1.","related_topics":["205-30","962-10","960-40","965-40","962-325"],"key_concepts":["terminating plan","liquidation basis of accounting","liquidation imminent","wasting trust","defined contribution pension plan","plan financial statements","termination disclosure"],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:c33cddd2bad6924052df40639925e652a3be1329990aa730ac427e6d3e8b4769","downloaded_from":"2026-09-10T02:24:05.891Z","last_downloaded_at":"2026-09-10T02:24:22.185Z","date_scope":"source_page_range","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps"}},"related":[{"number":"960-40","title":"Terminating Plans","topic_title":"Plan Accounting—Defined Benefit Pension 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