Employee benefit plan financial statement simplification
Recently, the Financial Accounting Standards Board (FASB) released two Accounting Standards Updates (ASU) that will have a significant (positive) impact on most employee benefit plan financial statements.
- ASU No. 2015-07, Disclosures for Investments in Certain Entities That Calculate Net Asset Value per Share (or Its Equivalent)
- ASU No. 2015-12, Plan Accounting: Defined Benefit Pension Plans (Topic 960), Defined Contribution Pension Plans (Topic 962), and Health and Welfare Benefit Plans (Topic 965) - I.Fully Benefit-Responsive Investment Contracts; II. Plan Investment Disclosures, and III. Measurement Date Practical Expedient
These updates will change (primarily reduce) the investment-related disclosures for benefit plan financial statements.
ASU 2015-07 is effective for periods beginning after December 15, 2015 for public entities and for periods beginning after December 15, 2016 for non-public entities.
ASU 2015-12 is effective for periods beginning after December 15, 2015.
Early application is allowed for both ASUs, which allows for concurrent implementation.
For more information, visit FASB's website to access ASU Nos. 2015-07 and 2015-12.