deferred compensation contracts

Expenses3

1. 710-10Overall710 Compensation—General

   ASC 710-10 is the catch-all compensation subtopic for arrangements outside pensions/OPEB (715), postemployment benefits (712), and stock compensation (718). Its General Subsections require accrual of a liability for compensated absences when four conditions are met (services already rendered, rights vest or accumulate, payment probable, amount reasonably estimable), prescribe accrual of individual deferred compensation contracts over the service period to the full eligibility date at present value, and limit deferral of union-contract lump-sum payments. The Deferred Compensation—Rabbi Trusts Subsections classify trust-held employer stock as treasury stock and classify the deferred compensation obligation as equity or a liability depending on the plan's settlement and diversification features (Plans A–D).

2. 710-908Airlines710 Compensation—General

   ASC 710-908 is the Airlines industry sub-subtopic of Compensation—General, but every section shown (05 Overview, 15 Scope, 25 Recognition, 30 Initial Measurement) is marked "Section not used," meaning the Codification carries no incremental airline-specific guidance in those sections. A reader must therefore apply the general compensation guidance in ASC 710 (and any airline guidance located elsewhere in ASC 908) to airline compensation arrangements.

3. 710-980Regulated Operations710 Compensation—General

   This Subtopic addresses compensated absences and other compensation-related costs for entities with regulated operations. Even though a regulator may allow such compensation in rates only when paid, the entity must still accrue the liability under Topic 710 because regulator rate actions cannot eliminate obligations the regulator did not impose. Because the cost will be recoverable in future rates as paid, the entity simultaneously records a regulatory asset representing the probable future increased revenue.