Disclosure Framework—Disclosure Review: Defined Benefit Plans
Last updated on March 16, 2018. Please refer to the Current Technical Plan for information about the expected release dates of exposure documents and final standards.
(Updated sections are indicated with an asterisk *)
The staff has prepared this summary of Board decisions for information purposes only. Those Board decisions are tentative and do not change current accounting. Official positions of the FASB are determined only after extensive due process and deliberations.
Project Objective and OverviewThe objective and primary focus of the disclosure framework project is to improve the effectiveness of disclosures in notes to financial statements by clearly communicating the information that is most important to users of each entity’s financial statements. Achieving the objective of improving effectiveness will require development of a framework that promotes consistent decisions about disclosure requirements by the Board and the appropriate exercise of discretion by reporting entities.
To achieve this objective, the disclosure framework project comprises two components: the Board’s Decision Process and the Entity’s Decision Process.
Currently, four disclosure areas are being evaluated as part of the disclosure framework project. Each review will include (1) evaluation of existing disclosure requirements within the Topic after applying the concepts in the Board’s decision process and (2) promotion of the appropriate use of discretion by entities specifically within the Topic.
This page provides updates on the disclosure review of defined benefit plans (Section 715-20-50). For information on the other three disclosure reviews, see the following:
- Inventory (Section 330-10-50)
- Fair value measurement (Section 820-10-50)
- Income taxes (Section 740-10-50)
The FASB staff has developed a “Q&A: FASB’s Disclosure Framework Project” fact sheet, which can be viewed here.
Due Process DocumentsOn January 26, 2016, the Board issued a proposed Accounting Standards Update, Compensation–Retirement Benefits–Defined Benefit Plans–General (Subtopic 715-20): Changes to the Disclosure Requirements for Defined Benefit Plans. The due date for comment letters was April 25, 2016.
- Download the proposed Accounting Standards Update, Compensation–Retirement Benefits–Defined Benefit Plans–General (Subtopic 715-20): Changes to the Disclosure Requirements for Defined Benefit Plans. The due date for comment letters was April 25, 2016.
- Read the Decision Questions Considered in Establishing Disclosure Requirements of the proposed Update.
- Read the press release on the proposed Update.
- Read the FASB in Focus on the proposed Update.
- Read comment letters on the proposed Update.
- Read the comment letter summary on the proposed Update.
*Decisions Reached at Last Meeting (March 14, 2018)The Board completed redeliberations of the proposed Accounting Standards Update, Compensation—Retirement Benefits—Defined Benefit Plans—General (Subtopic 715-20): Changes to the Disclosure Requirements for Defined Benefit Plans. The Board made the following decisions:
Removal of the Disclosure of the Effect of a One-Percentage-Point Change in the Assumed Health Care Cost Trend Rates
The Board confirmed its decision to remove the disclosure of the effect of a one-percentage-point increase and the effect of a one-percentage-point decrease in the assumed health care cost trend rates for public entities.
Clarification of the Disclosure about Aggregate Information for Underfunded Pension Plans
The Board decided to retain the existing requirement in paragraph 715-20-50-3 with clarification that the disclosure about aggregate information for underfunded (including unfunded) pension plans should be based on both the projected benefit obligation (PBO) and the accumulated benefit obligation (ABO) benchmarks.
Effective Date and Early Adoption
The Board decided that the effective date will be fiscal years ending after December 15, 2020, for public business entities and December 15, 2021, for all other entities. Early adoption is permitted. The effective date would be expressed as “fiscal years ending after” because no amendments are made to the interim disclosure requirements included in Subtopic 715-20.
Costs and Benefits
The Board decided that the expected benefits justify the expected costs of the changes and directed the staff to draft an Accounting Standards Update for vote by written ballot.
A copy of the Board meeting handout can be found here.
*Tentative Board Decisions Reached to Date (As of March 14, 2018)See Tentative Board Decisions Reached to Date
*Next StepsThe Board directed the staff to draft a final Accounting Standards Update for vote by written ballot.
*Board/Other Public Meeting DatesThe Board meeting minutes are provided for the information and convenience of constituents who want to follow the Board’s deliberations. All of the conclusions reported are tentative and may be changed at future Board meetings. Decisions become final only after a formal written ballot to issue a final standard.
|*March 14, 2018||Board Meeting—Defined Benefit Plan Disclosures|
|February 14, 2018||Board Meeting—Defined Benefit Plan Disclosures|
|July 13, 2016||Board Meeting—Defined Benefit Plan Disclosures|
|November 2, 2015||Board Meeting—Defined Benefit Plan Disclosures|
|July 9, 2015||Board Meeting—Defined Benefit Plan Disclosures|
|June 29, 2015||Board Meeting—Defined Benefit Plan Disclosures and Transition|
|August 20, 2014||Board Meeting—Defined Benefit Plan Disclosures and Appropriate Use of Discretion by Reporting Entities|
|June 11, 2014||Board Meeting—Defined Benefit Plan Disclosures and Potential Changes on the Basis of the Proposed Concepts Statement|
|April 4, 2014||Board Meeting—Field Study Results and Next Steps|
Contact InformationLucy Cheng
Postgraduate Technical Assistant
Postgraduate Technical Assistant