net periodic postretirement benefit cost

Expenses3

1. 715-60Defined Benefit Plans—Other Postretirement715 Compensation—Retirement Benefits

   ASC 715-60 governs an employer's accounting for single-employer defined benefit postretirement benefit plans other than pensions (OPEB)—chiefly retiree health care, but also retiree life insurance, tuition, day care, legal services and housing subsidies. The employer must recognize the funded status of each plan (fair value of plan assets less the accumulated postretirement benefit obligation) on the balance sheet, attribute the expected postretirement benefit obligation ratably over an attribution period ending at the full eligibility date, and recognize net periodic postretirement benefit cost with delayed recognition of prior service cost, gains/losses, and any transition obligation through other comprehensive income. Separate Subsections address the Medicare Part D subsidy, settlements/curtailments/termination benefits, and split-dollar life insurance arrangements.

2. 715-958Not-for-Profit Entities715 Compensation—Retirement Benefits

   This Subtopic adapts Topic 715 (pension and other postretirement benefits) for not-for-profit entities, which do not report other comprehensive income. Everywhere Topic 715 would require net gains or losses, prior service costs or credits, and transition assets or obligations to run through OCI/AOCI, an NFP instead recognizes those amounts as changes in net assets without donor restrictions that have not yet been reclassified into net periodic benefit cost. Those amounts, and the non-service components of net periodic benefit cost, are presented in separate line items outside any intermediate measure of operations (or performance indicator for business-oriented health care NFPs).

3. 715-980Regulated Operations715 Compensation—Retirement Benefits

   ASC 715-980 tells rate-regulated entities how to account for the difference between net periodic pension cost (715-30) or net periodic postretirement benefit cost (715-60) and the amounts of those costs allowed for rate-making purposes. The regulator's actions create a regulatory asset (deferred cost whose recovery is probable) or a liability (unearned revenue collected for future costs), which changes only the timing of expense recognition, not the underlying 715-30/715-60 measurement. Deferral of 715-60 costs as a regulatory asset is permitted only if strict criteria about the rate order, five-year phase-in, roughly 20-year deferral-recovery period, and non-increasing rate escalation are met.