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ASC 965, Plan Accounting - Health and Welfare Benefit Plans, provides the following guidance about disclosures for defined benefit health and welfare plans:
  • Information about the benefit obligations can be presented in a separate statement, combined with other information on another financial statement, or presented in the notes to the financial statements.
  • Benefit obligations should be presented as of the plan’s year end, but ASC 965-30-35-6 permits use of the most recent benefit obligation valuation rolled forward to the plan’s year end, provided it is reasonable to expect that the results will not be materially different from the results of a valuation as of the plan’s year end.
  • Postretirement benefit obligations should be measured using the measurement concepts of ASC 965-30-35-9. Accordingly, the obligation should be measured as the actuarial present value of benefits expected to be provided under the plan, reduced by the actuarial present value of contributions expected to be received from current plan participants. Disclosure is also required of the portion of the plan’s estimated cost of providing postretirement benefits funded by retiree contributions.
  • Disclosure of the weighted-average assumed discount rate used to measure the plan’s obligation for postemployment benefits is required in the notes.
  • Disclosure of the effects of a one-percentage-point change in assumed health care cost trends rates on the postretirement benefit obligation is required in the notes.
ASU 2018-14, Compensation—Retirement Benefits—Defined Benefit Plans—General (Subtopic 715-20), which is effective for fiscal years ending after December 15, 2020, eliminates the requirement for public entities to disclose the effects of a one-percentage-point change in assumed health care cost trend rates on the (a) aggregate of the service and interest cost components of net periodic benefit costs and (b) benefit obligation for postretirement health care benefits. The ASU, however, applies only to plan sponsor financial statements and therefore does not eliminate the requirement for benefit plan financial statements under ASC 965.
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