defined contribution plan

This Subtopic governs receivables in the financial statements of defined contribution pension plans — principally employer/participant contributions receivable and participant loans. Contributions receivable are recognized when supported by a formal commitment or legal/contractual requirement, are shown net of an allowance for estimated uncollectible amounts, and are separately identified. Participant loans are measured at unpaid principal plus accrued but unpaid interest and are reported as notes receivable from participants rather than as investments at fair value.

ASC 962-325 governs how a defined contribution pension plan reports its investments and insurance contracts. The core rule is that plan investments (including derivatives) are reported at fair value under Topic 820, with two exceptions: fully benefit-responsive investment contracts are reported at contract value, and insurance contracts as defined in Subtopic 944-20 are presented the same way as in the plan's ERISA Form 5500 filing (fair value or contract value). It also prescribes trade-date recording, presentation of investments by general type, master trust disclosures, and disclosures about benefit-responsive contracts.

ASC 325-965 (parallel to 965-325) governs how health and welfare benefit plans measure, present, and disclose their investments and insurance contracts. The core rule is that plan investments are reported at fair value less costs to sell, if significant, at the financial statement date, except that insurance contracts are presented as reported in the plan's ERISA Form 5500 filing (fair value or contract value) and fully benefit-responsive investment contracts of defined contribution plans are measured at contract value. Presentation is by general type of investment, with specified disclosures for benefit-responsive contracts and for plan interests in master trusts.

This subtopic governs how a defined contribution pension plan accounts for property, plant, and equipment that the plan itself uses in its operations. The core rule is that such operating assets — buildings, equipment, furniture and fixtures, and leasehold improvements — are reported at cost less accumulated depreciation or amortization, rather than at fair value like investment assets.

ASC 715-70 governs employer accounting and disclosure for defined contribution pension and other postretirement benefit plans—plans that provide an individual account for each participant and benefits based only on contributions plus returns. The core rule is that net periodic cost equals the contribution called for in the period in which the employee renders service (715-70-35-1), with costs accrued during the service period if contributions relate to periods after retirement or termination. Plans with characteristics of both defined benefit and defined contribution plans must be accounted for based on their substance (715-70-15-2).