# ASC Topic 962: Plan Accounting—Defined Contribution Pension Plans Source: FASB Accounting Standards Codification, Basic View [Read online](https://asc.understandingaccounting.org/asc/962/) 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): 2026-09-10T02:23:49.997Z to 2026-09-10T02:24:22.185Z Record version: sha256:ed56bf468d4ced4d634242ade434d7b13015069bca90243d88ec02a8c54438b7 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## Machine-generated topic summary ASC 962 governs financial reporting by a defined contribution pension plan as a reporting entity in its own right, as distinguished from the sponsoring employer's accounting under Topic 715. The Overall subtopic (962-10) sets the objective—providing information useful in assessing the plan's present and future ability to pay benefits when due—and directs that net assets available for benefits, which equal the sum of participants' individual account balances, be measured at values meaningful to users, principally the amount a participant could currently withdraw, borrow, or transfer (962-10-10-1; 962-10-05-5 through 05-6). The Terminating Plans subtopic (962-40) requires the plan to switch to the liquidation basis of accounting under Subtopic 205-30 once liquidation is deemed imminent (962-40-25-1 through 25-2), and to disclose the circumstances in all subsequent financial statements once a termination decision is made or a wasting trust exists (962-40-50-1). The unifying idea is that because participants bear the investment risk in a defined contribution plan, plan reporting is oriented to participants' individual account values rather than to any promised benefit obligation. Source downloaded (UTC): 2026-09-10T02:23:49.997Z to 2026-09-10T02:24:03.800Z Record version: sha256:c0e078eb37d931dcb2b5dbec9f1a20a9f97a8d2f7235d3cf7188687b8e5ef0d1 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 962-10: Plan Accounting—Defined Contribution Pension Plans — Overall ### Machine-generated study aids ```json { "summary": "ASC 962-10 is the Overall subtopic for financial reporting **by** a defined contribution pension plan itself (not by the sponsoring employer, which follows Topic 715). Its objective is to provide information useful in assessing the plan's present and future ability to pay benefits when due; because plan net assets available for benefits equal the sum of participants' individual account balances, those net assets are measured and reported at values meaningful to users—principally the amount a participant could currently withdraw, borrow, or transfer. It applies to all employee benefit plans providing benefits based on amounts contributed to an employee's individual account, and not to defined benefit plans (Topic 960) or health and welfare plans (Topic 965).", "key_points": [ "Plan Accounting Topics govern reporting by the plan, while Topic 715 and the Compensation Topics govern reporting by the employer (962-10-05-1).", "The primary objective of a defined contribution plan's financial statements is to provide information useful in assessing the plan's present and future ability to pay benefits when due; net assets available for benefits equal the sum of participants' individual account balances (962-10-10-1).", "Net assets available for benefits should be measured and reported at values meaningful to financial statement users (962-10-05-5), including the amount participants would receive if they currently withdrew, borrowed, or transferred funds (962-10-05-6).", "Participants are key users because they bear the investment risk and plan transactions directly affect their benefits, unlike in defined benefit plans (962-10-05-4).", "Primary users are the plan sponsor(s), plan participants, and the DOL, IRS, and SEC (962-10-05-7).", "Scope: all entities that are employee benefit plans providing benefits based on amounts contributed to an employee's individual account (962-10-15-2); excluded are defined benefit pension plans (Topic 960) and health and welfare plans that are not also defined contribution plans (962-10-15-3).", "ERISA reporting requirements are generally not codified but must still be considered by preparers of defined contribution plan financial statements (962-10-05-8 through 05-9)." ], "categories": [ "Industry-specific", "Compensation and benefits", "Financial statement presentation", "Subsequent measurement" ], "audience_level": "intermediate", "student_note": "The classic trap is confusing plan-level reporting (Topics 960/962/965) with employer-level pension accounting (Topic 715)—962 tells the plan how to report its own net assets, not how the sponsor records pension cost. Remember that in a DC plan there is no benefit obligation to measure: net assets available for benefits simply equal the sum of participants' account balances.", "related_topics": [ "960", "965", "715", "962-40", "962-205", "820" ], "key_concepts": [ "defined contribution pension plan", "plan financial statements", "net assets available for benefits", "participant individual account balances", "ability to pay benefits when due", "erisa reporting", "plan versus employer accounting" ] } ``` Source downloaded (UTC): 2026-09-10T02:23:49.997Z to 2026-09-10T02:23:49.997Z Record version: sha256:6cd4d41a0b0f2fb3b7da32177b1f069ca49c371f6924153b297e8fd1bb8e483b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 962-10-00: 00 Status [Read section](https://asc.understandingaccounting.org/asc/962/10/#00-status) SEC content: no ##### [962-10-00-1](https://asc.understandingaccounting.org/asc/962/10/#962-10-00-1) Pending content: no Source downloaded (UTC): 2026-09-10T02:23:49.997Z to 2026-09-10T02:23:49.997Z Record version: sha256:4feda96c5179e264437669f2ff16dc55ed5beec5c284f1deeefd8e2699b7e181 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
BenefitsAmendedAccounting Standards Update No. 2016-1912/14/2016
Benefits (3rd def.)AddedAccounting Standards Update No. 2014-0603/14/2014
Defined Contribution PlanAmendedAccounting Standards Update No. 2014-0603/14/2014
Sponsor (3rd def.)AddedAccounting Standards Update No. 2014-0603/14/2014
962-10-05-1AmendedAccounting Standards Update No. 2014-0603/14/2014
962-10-05-7AmendedAccounting Standards Update No. 2014-0603/14/2014
962-10-10-1AmendedAccounting Standards Update No. 2014-0603/14/2014
962-10-15-2AmendedAccounting Standards Update No. 2014-0603/14/2014
962-10-65-1AddedAccounting Standards Update No. 2015-12 (Part I)07/31/2015
962-10-65-2AddedAccounting Standards Update No. 2015-12 (Part II)07/31/2015
962-10-65-3AddedAccounting Standards Update No. 2015-12 (Part III)07/31/2015
962-10-65-4AddedAccounting Standards Update No. 2017-0602/27/2017
Source downloaded (UTC): 2026-09-10T02:23:53.436Z to 2026-09-10T02:23:53.436Z Record version: sha256:48d2c457851ada2060568d934c68ed16ce7ed52d8f6e669d01be594e8db6a3aa Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 962-10-05: 05 Overview and Background [Read section](https://asc.understandingaccounting.org/asc/962/10/#05-overview-and-background) SEC content: no ##### [962-10-05-1](https://asc.understandingaccounting.org/asc/962/10/#962-10-05-1) Pending content: no Source downloaded (UTC): 2026-09-10T02:23:53.436Z to 2026-09-10T02:23:53.436Z Record version: sha256:4b3e07c489c46a4fcebfca26cc6640e07c609a283b27b88466e2e6a1f6d30687 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The Codification contains several Topics for the accounting and reporting by a plan (as opposed to an employer) due to the differing accounting treatment for various forms of employee benefit plans. The Compensation Topics address the accounting and reporting by the employer. The Plan Accounting Topics include: 1. a Plan Accounting—Defined Benefit Pension Plans, Topic 960 2. b Plan Accounting—Defined Contribution Pension Plans, (this Topic) 3. c Plan Accounting—Health and Welfare Benefit Plans, Topic 965. Additionally, Topic 715 addresses financial accounting and reporting for an employer that offers pension, other postretirement, and certain special or contractual 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.") to its employees. ##### [962-10-05-2](https://asc.understandingaccounting.org/asc/962/10/#962-10-05-2) Pending content: no Source downloaded (UTC): 2026-09-10T02:23:53.436Z to 2026-09-10T02:23:53.436Z Record version: sha256:bbdae34674be856cbf6468f9c853f6ef400043062030e1a50dce5ed8524af53f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The Plan Accounting—Defined Contribution Pension Plans Topic includes the following Subtopics: 1. a Overall 2. b Terminating Plans 3. c Presentation of Financial Statements 4. d Notes to Financial Statements 5. e Receivables 6. f Investments—Other. ##### [962-10-05-3](https://asc.understandingaccounting.org/asc/962/10/#962-10-05-3) Pending content: no Source downloaded (UTC): 2026-09-10T02:23:53.436Z to 2026-09-10T02:23:53.436Z Record version: sha256:09339ec1e0ff84693866548a23253fa1e639c6bbc498d42b5e2eaa15cf69ceba Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The Overall Subtopic provides guidance on the accounting and reporting for defined contribution pension plans. ##### [962-10-05-4](https://asc.understandingaccounting.org/asc/962/10/#962-10-05-4) Pending content: no Source downloaded (UTC): 2026-09-10T02:23:53.436Z to 2026-09-10T02:23:53.436Z Record version: sha256:470c7da0f3b7b8bd59e1c378ef65fced3c4057d3cdfc842bbc4d5c68fe49d854 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Information relevant to the primary users of [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.") financial statements—plan participants—is different from that which is relevant to users of defined benefit plan financial statements. In defined contribution plans, plan participants have a greater vested interest in monitoring the financial condition and operations of the plan since they bear investment risk under these plans and plan transactions can directly affect their benefits. ##### [962-10-05-5](https://asc.understandingaccounting.org/asc/962/10/#962-10-05-5) Pending content: no Source downloaded (UTC): 2026-09-10T02:23:53.436Z to 2026-09-10T02:23:53.436Z Record version: sha256:06e5aaeb5630658a95d74c7d1c4dd696baf44dd74dc446f9d980e68dce9954f9 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Consistent with the objective of a defined contribution plan's financial statements, net assets available for benefits of defined contribution plans should be measured and reported at values that are meaningful to financial statement users. ##### [962-10-05-6](https://asc.understandingaccounting.org/asc/962/10/#962-10-05-6) Pending content: no Source downloaded (UTC): 2026-09-10T02:23:53.436Z to 2026-09-10T02:23:53.436Z Record version: sha256:78f453421d438d96119031588fdf7249a01cfdb52057ff85a1f5e1b116383df0 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Information that is useful to plan participants includes the amount they would receive currently if they were to withdraw or borrow funds from or transfer funds within the plan. ##### [962-10-05-7](https://asc.understandingaccounting.org/asc/962/10/#962-10-05-7) Pending content: no Source downloaded (UTC): 2026-09-10T02:23:53.436Z to 2026-09-10T02:23:53.436Z Record version: sha256:34e17d4b1efd51f55d55989a11e9dedf23de07752d729c4756ced16967811c99 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The primary users of a defined contribution plan's financial statements include all of the following: 1. a Plan [sponsor(s)](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.") 2. b Plan participants 3. c The following governmental regulators: 1. 1 The U.S. Department of Labor 2. 2 The Internal Revenue Service (IRS) 3. 3 The Securities and Exchange Commission (SEC). #### The Employee Retirement Income Security Act of 1974 ##### [962-10-05-8](https://asc.understandingaccounting.org/asc/962/10/#962-10-05-8) Pending content: no Source downloaded (UTC): 2026-09-10T02:23:53.436Z to 2026-09-10T02:23:53.436Z Record version: sha256:ffb548129742d6c15b1759f86d8252fdd9901d251f211baf8bc49d8e7ed75529 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Defined contribution pension plans are generally subject to certain of the reporting and other requirements of The Employee Retirement Income Security Act of 1974. In addition to establishing certain minimum standards for participation, vesting, and funding for employee benefit plans of private entities, the Act also requires annual reporting of certain information to particular governmental agencies and summarized information to plan participants. For many plans, the reporting requirements include financial statements prepared in conformity with generally accepted accounting principles (GAAP). ##### [962-10-05-9](https://asc.understandingaccounting.org/asc/962/10/#962-10-05-9) Pending content: no Source downloaded (UTC): 2026-09-10T02:23:53.436Z to 2026-09-10T02:23:53.436Z Record version: sha256:2a5d48c120d46ecd0bfc75610accbc1e822a4700492f6030ce51c63f89f99e28 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The reporting requirements of the Act, except for certain particular references, are not included in the Codification, but they should nonetheless be considered by those responsible for the preparation of defined contribution plan financial statements. Source downloaded (UTC): 2026-09-10T02:23:55.285Z to 2026-09-10T02:23:55.285Z Record version: sha256:ecab6664c927137f625c493094e5c07d0f319f9e419cf83c7d6d10a5eba56dd4 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 962-10-10: 10 Objectives [Read section](https://asc.understandingaccounting.org/asc/962/10/#10-objectives) SEC content: no ##### [962-10-10-1](https://asc.understandingaccounting.org/asc/962/10/#962-10-10-1) Pending content: no Source downloaded (UTC): 2026-09-10T02:23:55.285Z to 2026-09-10T02:23:55.285Z Record version: sha256:604412dc6cf81aa4550468cf8e8171543541035739a903364a2c0b135a08ce1c Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The primary objective of a defined contribution plan's financial statements is to provide information that is useful in assessing the plan's present and future ability 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.") when they are due. In 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 plan's net assets available to pay benefits equal the sum of participants' individual account balances. Accordingly, benefits that can be paid by the plan when they are due relate to the value of the assets that may currently be made available to the individual participants. Source downloaded (UTC): 2026-09-10T02:23:57.157Z to 2026-09-10T02:23:57.157Z Record version: sha256:caaa3abc0a01a349c4e920ec6637691aca8a612e56a41949344d42d274b10c92 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 962-10-15: 15 Scope and Scope Exceptions [Read section](https://asc.understandingaccounting.org/asc/962/10/#15-scope-and-scope-exceptions) SEC content: no #### Overall Guidance ##### [962-10-15-1](https://asc.understandingaccounting.org/asc/962/10/#962-10-15-1) Pending content: no Source downloaded (UTC): 2026-09-10T02:23:57.157Z to 2026-09-10T02:23:57.157Z Record version: sha256:0b47c8cb01f2ec20a2e9c8501e5e2c7c13bbff0b8966ee0e04e543abeb71ee04 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The Subtopics within the Plan Accounting—Defined Contribution Pension Plans Topic only provide incremental guidance for the entities defined in this Scope Section, or as further defined in the Scope Sections of the individual Plan Accounting—Defined Contribution Pension Plans Subtopics. #### Entities ##### [962-10-15-2](https://asc.understandingaccounting.org/asc/962/10/#962-10-15-2) Pending content: no Source downloaded (UTC): 2026-09-10T02:23:57.157Z to 2026-09-10T02:23:57.157Z Record version: sha256:ba03259add145c07326b60199d8f21def6a083ac244c83bce49634101b1d8e8e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The guidance in this Topic applies to all entities that are employee benefit plans that provide [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.") based on amounts contributed to an employee's individual account. ##### [962-10-15-3](https://asc.understandingaccounting.org/asc/962/10/#962-10-15-3) Pending content: no Source downloaded (UTC): 2026-09-10T02:23:57.157Z to 2026-09-10T02:23:57.157Z Record version: sha256:742bf074e5efd64deb798982b8a8f243b1e90badd5310d6bd512a692635d1c09 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The guidance in this Topic does not apply to the following entities: 1. a Defined benefit pension plans (see Topic 960) 2. b Health and welfare benefit plans that are not also defined contribution plans (see Topic 965). Source downloaded (UTC): 2026-09-10T02:24:03.800Z to 2026-09-10T02:24:03.800Z Record version: sha256:f77eab09fefbce7ba995ef9c00caa63253ca07a7e8cf027bdc57d7994d6e9a34 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 962-10-65: 65 Transition and Open Effective Date Information [Read section](https://asc.understandingaccounting.org/asc/962/10/#65-transition-and-open-effective-date-information) SEC content: no ##### [962-10-65-1](https://asc.understandingaccounting.org/asc/962/10/#962-10-65-1) Pending content: no Source downloaded (UTC): 2026-09-10T02:24:03.800Z to 2026-09-10T02:24:03.800Z Record version: sha256:188aa86fe1678b5c14cee624fe9e4d2b1cbbf149608f3c5d3b850eef28e8e437 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Paragraph superseded on 07/05/2017 after the end of the transition period stated in Accounting Standards Update No. 2015-12 (Part I), _Plan Accounting (Topics 962 and 965): Fully Benefit-Responsive Investment Contracts_. ##### [962-10-65-2](https://asc.understandingaccounting.org/asc/962/10/#962-10-65-2) Pending content: no Source downloaded (UTC): 2026-09-10T02:24:03.800Z to 2026-09-10T02:24:03.800Z Record version: sha256:40d4629ab6e5833f6cf7503e1c856af8e7cc22686c5eeff22cbe0d59680cea63 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Paragraph superseded on 07/05/2017 after the end of the transition period stated in Accounting Standards Update No. 2015-12 (Part II), _Plan Accounting (Topics 960, 962, and 965): Plan Investment Disclosures._ ##### [962-10-65-3](https://asc.understandingaccounting.org/asc/962/10/#962-10-65-3) Pending content: no Source downloaded (UTC): 2026-09-10T02:24:03.800Z to 2026-09-10T02:24:03.800Z Record version: sha256:cc7612e35307a024fd8b63724f0a27d286ada58ff0e7e147df824d6aa009e49d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Paragraph superseded on 07/05/2017 after the end of the transition period stated in Accounting Standards Update No. 2015-12 (Part III), _Plan Accounting (Topics 960, 962, and 965): Measurement Date Practical Expedient_. ##### [962-10-65-4](https://asc.understandingaccounting.org/asc/962/10/#962-10-65-4) Pending content: no Source downloaded (UTC): 2026-09-10T02:24:03.800Z to 2026-09-10T02:24:03.800Z Record version: sha256:2548294c21d1ec4315fd4512d44a63926b69891b2950e55c6785707e9f3be5e9 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Paragraph superseded on 07/20/2020 after the end of the transition period stated in Accounting Standards Update No. 2017-06, _Plan Accounting (Topics 960, 962, and 965): Employee Benefit Plan Master Trust Reporting_. Source downloaded (UTC): 2026-09-10T02:24:05.891Z to 2026-09-10T02:24:22.185Z Record version: sha256:48aee92c179668b9609e1a444f662e3a7d736f9755ef5d9983a92f80a38432e4 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 962-40: Plan Accounting—Defined Contribution Pension Plans — Terminating Plans ### Machine-generated study aids ```json { "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" ] } ``` Source downloaded (UTC): 2026-09-10T02:24:05.891Z to 2026-09-10T02:24:05.891Z Record version: sha256:dc864dc2c8d2ba08123553f310a8584396aada2ba0fe6bd1f4563f7ed1a37c85 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 962-40-00: 00 Status [Read section](https://asc.understandingaccounting.org/asc/962/40/#00-status) SEC content: no ##### [962-40-00-1](https://asc.understandingaccounting.org/asc/962/40/#962-40-00-1) Pending content: no Source downloaded (UTC): 2026-09-10T02:24:05.891Z to 2026-09-10T02:24:05.891Z Record version: sha256:687ca2397ee725aa5ea95ee97f095b46fa26b43a4c8683b7ffe337cfc406afcc 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
BenefitsAmendedAccounting Standards Update No. 2016-1912/14/2016
Benefits (3rd def.)AddedAccounting Standards Update No. 2014-0603/14/2014
Defined Contribution PlanAmendedAccounting Standards Update No. 2014-0603/14/2014
LiquidationAddedAccounting Standards Update No. 2013-0704/22/2013
962-40-25-1AmendedAccounting Standards Update No. 2013-0704/22/2013
962-40-25-2AmendedAccounting Standards Update No. 2013-0704/22/2013
962-40-35-1SupersededAccounting Standards Update No. 2013-0704/22/2013
962-40-35-1AmendedAccounting Standards Update No. 2012-0410/01/2012
962-40-50-1AmendedAccounting Standards Update No. 2014-0603/14/2014
Source downloaded (UTC): 2026-09-10T02:24:08.912Z to 2026-09-10T02:24:08.912Z Record version: sha256:a6470ee2a72a484f6399fe6928411a5741a0e979bf098ffd26142a1f6a1c778e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 962-40-05: 05 Overview and Background [Read section](https://asc.understandingaccounting.org/asc/962/40/#05-overview-and-background) SEC content: no ##### [962-40-05-1](https://asc.understandingaccounting.org/asc/962/40/#962-40-05-1) Pending content: no Source downloaded (UTC): 2026-09-10T02:24:08.912Z to 2026-09-10T02:24:08.912Z Record version: sha256:030be0c0e16794ed84ec8f1456cd2c7a58ada0ac2da63b25ce68576554763ff6 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subtopic provides guidance for [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.") that are [terminating plans](https://asc.understandingaccounting.org/glossary/t/#terminating-plan "All plans about which a termination decision has been made regardless of whether the terminating plan will be replaced."). Source downloaded (UTC): 2026-09-10T02:24:11.898Z to 2026-09-10T02:24:11.898Z Record version: sha256:6590df25acddea371459ab4065e4ffdcdfbbbbe39e26ff64fc3c376fe6bd7c57 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 962-40-15: 15 Scope and Scope Exceptions [Read section](https://asc.understandingaccounting.org/asc/962/40/#15-scope-and-scope-exceptions) SEC content: no #### Overall Guidance ##### [962-40-15-1](https://asc.understandingaccounting.org/asc/962/40/#962-40-15-1) Pending content: no Source downloaded (UTC): 2026-09-10T02:24:11.898Z to 2026-09-10T02:24:11.898Z Record version: sha256:9e9295ad04e273f549f9977845120533a90cf1cd6c3994d1071f0a73e992bb29 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 962-10-15). Source downloaded (UTC): 2026-09-10T02:24:16.921Z to 2026-09-10T02:24:16.921Z Record version: sha256:2dace4f75fd2d9656308edb11cb9a29ebea0605ed156ddd5dc3a0e4174c18028 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 962-40-25: 25 Recognition [Read section](https://asc.understandingaccounting.org/asc/962/40/#25-recognition) SEC content: no ##### [962-40-25-1](https://asc.understandingaccounting.org/asc/962/40/#962-40-25-1) Pending content: no Source downloaded (UTC): 2026-09-10T02:24:16.921Z to 2026-09-10T02:24:16.921Z Record version: sha256:cbe038aadf80639fb7c586f959f70d26f09fd7f92b4a711f35021ec4c69ef793 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. If the [liquidation](https://asc.understandingaccounting.org/glossary/l/#liquidation "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.") of a plan is deemed to be imminent (as defined in paragraph [205-30-25-2](https://asc.understandingaccounting.org/asc/205/30/#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 accounting in accordance with Subtopic 205-30. ##### [962-40-25-2](https://asc.understandingaccounting.org/asc/962/40/#962-40-25-2) Pending content: no Source downloaded (UTC): 2026-09-10T02:24:16.921Z to 2026-09-10T02:24:16.921Z Record version: sha256:f64175242158ca4a1ea35008aba246d59c9679891f4b03d574cf8f0b196a3eef Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Plan financial statements for periods ending after the determination that liquidation is imminent are prepared using the liquidation basis of accounting. Source downloaded (UTC): 2026-09-10T02:24:19.666Z to 2026-09-10T02:24:19.666Z Record version: sha256:30ef3c68db8318e1cfce236c5a673bb7f3b00a63fa8fbcc41092ac7705eeaa54 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 962-40-35: 35 Subsequent Measurement [Read section](https://asc.understandingaccounting.org/asc/962/40/#35-subsequent-measurement) SEC content: no ##### [962-40-35-1](https://asc.understandingaccounting.org/asc/962/40/#962-40-35-1) Pending content: no Source downloaded (UTC): 2026-09-10T02:24:19.666Z to 2026-09-10T02:24:19.666Z Record version: sha256:ab1d0f38fe4c9eb531532013240b6a8d743d7292431a3486ab0e6e0d81aadf7e Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. [Paragraph superseded by Accounting Standards Update No. 2013-07](https://asc.understandingaccounting.org/updates/asu-2013-07/). Source downloaded (UTC): 2026-09-10T02:24:22.185Z to 2026-09-10T02:24:22.185Z Record version: sha256:bc76ae0847ac343b62d17d09115388385d8b33f2aea64389c2c36ffe6043b179 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 962-40-50: 50 Disclosure [Read section](https://asc.understandingaccounting.org/asc/962/40/#50-disclosure) SEC content: no ##### [962-40-50-1](https://asc.understandingaccounting.org/asc/962/40/#962-40-50-1) Pending content: no Source downloaded (UTC): 2026-09-10T02:24:22.185Z to 2026-09-10T02:24:22.185Z Record version: sha256:649a86b3520cc25a00a4dc2c874e724f3f1dd2f826f377197532bd42ccf72d02 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. 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](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.") 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.