BAR, Business Analysis and Reporting

Sources for Financial Statements of Employee Benefit Plans

Last reviewed 2026-09-14

The standards and authorities behind PocketCPA's BAR lessons on Financial Statements of Employee Benefit Plans. The topic rests on ASC 960 / ASC 962 / ASC 965.

About this topic

All three require the same two statements. What separates them is whether the plan's benefit obligation is presented beside those net assets, and how.

Why the examiner cares. The exam grades discrimination among the three plan types far more often than it grades arithmetic inside any one of them. Almost every wrong answer in this group is a correct rule applied to the wrong Topic, so the plan type has to be settled before the answer choices are read. The stem names a 401(k), a formula-based pension or a retiree medical plan in its first line. The costliest habit is learning a rule as a slogan and then carrying it across a Topic boundary. Contract value for a fully benefit-responsive investment contract is the clearest case: the carve-out lives in ASC 962 and ASC 965 and does not exist in ASC 960 at all, so a candidate who applies it to a defined benefit pension plan is wrong on facts that look identical.

Key points

Defined benefit plan financial statements report the actuarial present value of accumulated plan benefits.
Plan assets are measured at fair value; the net assets available for benefits are reported in the plan's statements.
The projected benefit obligation (PBO) includes the effect of expected future salary increases for pay-related plans.
GASB pension reporting requires the net pension liability (total pension liability minus fiduciary net position).

What the lessons cover

The plan as a reporting entity
Defined benefit pension plans (ASC 960)
Defined contribution plans (ASC 962)
Health and welfare plans (ASC 965)
The three plan types side by side
Minimum contents of the two common statements
Measuring accumulated plan benefits (ASC 960-20)
Fully benefit-responsive investment contracts
Interests in master trusts
The measurement date practical expedient
Investment disclosures and what ASU 2015-12 removed
Where this topic borders the rest of the exam

Authoritative references

ASC 960, Plan Accounting - Defined Benefit Pension Plans.

960-205-45-1 through 45-4 sets the required financial statements.
960-205-45-7 covers an interest in a master trust.
960-205-50-1(e) covers dividend income on excluded contracts.
960-20-45-2 provides that benefit information may be presented in the notes.
960-20-45-8 and 960-20-50-6 through 50-7 give the presentation alternatives.
960-30-45-1 and 960-30-45-2 cover changes in net assets and the minimum content.
960-30-45-11 and 960-30-50-1 through 50-3 were superseded by ASU 2017-06.
960-325-35-1 through 35-3 cover investments at fair value, the reduction for costs of sale, and insurance contracts.
960-325-35-4 gives the measurement date expedient.
960-325-50-1 covers general-type classes and the ASC 820-10-50-2B(a) exemption.
960-325-50-2 is the superseded 5 percent list.
960-325-50-3 provides that historical cost is neither required nor proscribed.
960-325-50-4 through 50-5 give the expedient disclosures.
960-325-50-6 gives the net asset value strategy relief.
960-325-50-7 through 50-11 give the master trust disclosures.

ASC 962, Plan Accounting - Defined Contribution Pension Plans.

962-205-45-2 sets the face of the statement of net assets.
962-205-45-3 is the superseded adjustment line.
962-205-45-6 and 962-205-45-7 cover changes in net assets.
962-205-45-10 covers master trust presentation.
962-325-35-1 and 35-1A cover fair value and costs of sale.
962-325-35-1B gives the measurement date expedient.
962-325-35-5 and 35-5A carry fully benefit-responsive investment contracts at contract value.
962-325-35-6 covers insurance contracts.
962-325-35-9 covers individual evaluation and pooled funds.
962-325-35-12 and 962-325-45-1 through 45-4 and 45-7 were superseded.
962-325-50-1 covers general-type classes and the Topic 820 exemption.
962-325-50-1A is the superseded 5 percent list.
962-325-50-2A through 50-2B give the expedient disclosures.
962-325-50-6 was superseded.
962-325-50-7 through 50-8C give the master trust disclosures.
962-10-65-1 through 65-4 gives the transition.

ASC 965, Plan Accounting - Health and Welfare Benefit Plans.

965-20-45-1 sets the face of the statement of net assets.
965-20-45-2 is the superseded adjustment line.
965-20-45-3 covers changes in net assets, eleven items.
965-30-35-6 covers measurement of plan benefit obligations, amended by ASU 2016-19.
965-205-10-1 and 965-205-45-1 through 45-2 cover presentation.
965-205-45-11 covers master trust presentation.
965-205-50-5 covers 401(h) accounts.
965-205-55-2 through 55-6 give the illustrations, including the face presentation of benefit obligation information.
965-325-35-1 carries fair value less costs to sell, if significant.
965-325-35-2 carries investment contracts of defined benefit health and welfare plans at fair value.
965-325-35-2A gives the measurement date expedient.
965-325-35-3 covers insurance contracts.
965-325-35-6 covers individual evaluation and pooled funds.
965-325-35-8 carries contract value for a defined contribution health and welfare plan.
965-325-35-9 was superseded.
965-325-50-1 covers general-type classes and the Topic 820 exemption.
965-325-50-1A is the superseded 5 percent list.
965-325-50-1B through 50-1C give the expedient disclosures.
965-325-50-5 through 50-9 give the master trust disclosures.

Accounting Standards Updates.

ASU 2015-12, Plan Accounting (Topics 960, 962, and 965), effective for fiscal years beginning after December 15, 2015, carries three Parts.
- Part I covers fully benefit-responsive investment contracts, applied retrospectively.
- Part II covers plan investment disclosures, applied retrospectively.
- Part III covers the measurement date practical expedient, applied prospectively.
ASU 2016-19, Technical Corrections and Improvements, amended the Master Glossary terms Benefits and Plan Assets and ASC 965-30-35-6.
ASU 2017-06, Employee Benefit Plan Master Trust Reporting, effective for fiscal years beginning after December 15, 2018, applied retrospectively.

Related Topics.

ASC 715-20-50-3 carries the employer's projected and accumulated benefit obligation disclosures.
ASC 820-10-35-59 and 820-10-50-2B(a) and 820-10-50-6A(a) carry fair value measurement and disclosure.
ASC 944-20 carries the definition of an insurance contract.
ASC 250 covers changes in estimate.
ASC 275 and ASC 825 carry the concentration disclosures retained by ASU 2015-12.
ASC 855 covers subsequent events, distinct from the wording of ASC 965-30-35-6.
FASB Statement No. 35 is the pre-codification source carried into ASC 960.

How PocketCPA uses these sources

Every lesson is written in original words and cites the paragraph each rule comes from. No standard's text is reproduced. How lessons and questions are written and checked is set out in our methodology.