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.

1. ASU No. 2015-07, Disclosures for Investments in Certain Entities That Calculate Net Asset Value per Share (or Its Equivalent)
2. 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.