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U.S. GAAP Codification of Accounting Standards |
| U.S. GAAP Codification | Accounting Standards, ASC |
| Principles of Accounting, Intermediate Financial Accounting, U.S. GAAP Textbook |
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U.S. GAAP Accounting Standards |
| Codification Topic 715-30 Defined Benefit Plans - Pension Standards before U.S. GAAP Codification SFAS 87, December 1985 --> Employers' Accounting for Pensions SFAS 88, December 1985 --> Employers' Accounting for Settlements and Curtailments of Defined Benefit Pension Plans and for Termination Benefits SFAS 87 was amended by: SFAS 106, December 1990 --> Employers' Accounting for Postretirement Benefits Other Than Pensions SFAS 132, February 1998 --> Employers' Disclosures about Pensions and Other Postretirement Benefits SFAS 132(R), December 2003, --> Employers' Disclosures about Pensions and Other Postretirement Benefits SFAS 158, December 2006 --> Employers' Accounting for Defined Benefit Pension and Other Postretirement Plans�an amendment of FASB Statements No. 87, 88, 106, and 132(R) Key Topics of Employers' Accounting for Pensions 1. Basic elements of pension accounting 2. Recognition: Net periodic pension cost 3. Recognition: Liabilities and assets 4. Measurement: Costs and obligations 5. Measurement: Plan assets 6. Multiemployer plans Projected Benefit Obligation (PBO) --> Actuarial present value of benefits, --> based on future compensation levels Accumulated Benefit Obligation (ABO) --> Actuarial present value of benefits, --> based on current and past compensation levels Vested Benefit Obligation --> Vested portion of accumulated benefit obligation Components of Net Periodic Pension Cost 1. Service cost 2. Interest cost 3. Actual return on plan assets 4. Gain or loss 5. Amortization of prior service cost or credit 6. Amortization of net transition asset or obligation Service Cost --> Actuarial present value of benefits --> attributed to --> employee service --> during the period Interest Cost --> Increase in the Projected Benefit Obligation --> due to the passage of time Interest cost is accrued --> at the assumed discount rates Actual Return on Plan Assets The difference between (1) and (2) --> as adjusted for (3) (1) Fair value of plan assets at the beginning of the period (2) Fair value of plan assets at the end of the period (3) Contributions and Benefit Payments Prior Service Cost Retroactive benefits due to plan amendments are 1. charged to Other Comprehensive Income (OCI) --> at the date of amendment 2. Amortized over future period of service --> of each employee active at the date of amendment --> equal amount to each period 3. Amortized amount is --> a component of net periodic pension cost Gains and Losses 1. Unexpected changes in the amount of --> Plan Assets or Projected Benefit Obligation (PBO) 2. Unexpected changes --> Assets: Actual return - Expected return --> PBO: Forecast errors on actuarial assumptions Unrecognized Gains and Losses 1. Gains and losses are --> not required to be recognized --> in net periodic pension cost --> when they occur 2. Unrecognized gains and losses are --> accumulated in Other Comprehensive Income (OCI) Corridor Approach 1. If unrecognized gains and losses accumulated in OCI --> does not exceed 10% of (A) --> no amortization (A) the greater of (B) and (C) (B) Market-related value of plan assets (C) Projected Benefit Obligation 2. If unrecognized gains and losses accumulated in OCI --> exceeds 10% of (A) --> the excess is amortized --> amortization is included in net periodic pension cost Minimum amount of amortization 1. The excess is divided by --> the average remaining service period of --> active employees --> expected to receive benefits 2. If all or almost all participants are inactive --> the average remaining life expectancy of --> inactive participants --> is used Market-related value of plan assets 1. Market-related Value is either (a) or (b) (a) Fair Value (b) Calculated Value 2. Calculated value is the amount --> that recognizes changes in fair value --> in a systematic and rational manner --> over NOT more than 5 years Unfunded PBO (1) Fair Value of Plan Assets (2) Projected Benefit Obligation (PBO) If (1) < (2) --> recognize Unfunded PBO as a liability If (1) > (2) --> recognized Overfunded PBO as an asset |
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Codification Topic 715 Compensation-Retirement Benefits |
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Subtopics of Codification Topic 715 715-10 Overall 715-20 Defined benefit plans-general 715-30 Defined benefit plans-pension 715-60 Defined benefit plans-other postretirement 715-70 Defined contribution plans 715-80 Multiemployer plans |
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Accounting Terms of Codification Topic 715-10 |
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Accounting Terms of Codification Topic 715-20 Net periodic pension cost Net periodic postretirement benefit cost Nonpublic entity Publicly traded entity Related parties Settlement of a pension or postretirement benefit obligation |
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Accounting Terms of Codification Topic 715-30 Accumulated benefit obligation Actual return on plan assets (component of net periodic pension cost) Actuarial funding method Actuarial gain or loss Actuarial present value Allocated contract Amortization Annuity contract Asset group Assumptions Attribution Benefit approach Benefit formula Benefit-years-of -service approach Benefits Captive insurer Career-average-pay formula Cash balance plan Component of an entity Contributory plan Cost approach Cost-compensation approach Curtailment Defined benefit pension plan Defined contribution plan Discount rate Expected return on plan assets Explicit approach to assumptions Final-pay formula Flat-benefit formula Fund Funding method Funding policy Gain or loss Gain or loss (component of net periodic pension cost) Implicit approach to assumptions Interest cost (component of net periodic pension cost) Loss Market-related value of plan assets Mortality Mortality rate Multiple-employer plan Net periodic pension cost Nonparticipating annuity contract Operating segment Participant Participating annuity contract Participation right Pension benefit formula Pension benefits Plan amendment Plan assets Plan assets available for benefits Plan curtailment Plan suspension Plan termination Plan's benefit formula Prior service cost Probable Projected benefit obligation Reporting unit Service Service cost (component of net periodic pension cost) Settlement of a pension or postretirement benefit obligation Single-employer plan Sponsor Termination benefits Termination indemnities Turnover Unallocated contract Unfunded projected benefit obligation Vested benefit obligation Vested benefits |
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Accounting Terms of Codification Topic 715-60 Accumulated postretirement benefit obligation Active plan participant Actual return on plan assets (component of net periodic postretirement benefit cost) Assumed per capita claims cost (by age) Attribution period Collateral split-dollar life insurance Cost-sharing (provisions of the plan) Credited service period Curtailment (of a postretirement benefit plan) Debt security Defined benefit postretirement plan Dependency status Endorsement split-dollar life insurance Equity security Expected long-term rate of return on plan assets Expected postretirement benefit obligation Full eligibility (for benefits) Full eligibility date Gain or loss (component of net periodic postretirement benefit cost) Gross eligible charges Health care cost trend rate Incurred claims cost (by age) Insurance contract Interest cost (component of net periodic postretirement benefit cost) Medicare reimbursement rates Net incurred claims cost (by age) Net periodic postretirement benefit cost Nonparticipating insurance contract Participating insurance contract Pay-related plan Per capita claims cost (by age) Plan Plan demographics Plan participant Postretirement benefit plan Postretirement benefits Postretirement benefits other than pensions Postretirement health care benefits Retirees Service cost (component of net periodic postretirement benefit cost) Substantive plan Transition asset Transition obligation Unfunded accumulated postretirement benefit obligation |
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Accounting Terms of Codification Topic 715-70 Defined contribution postretirement plan |
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Accounting Terms of Codification Topic 715-80 Multiemployer plan |
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