FASB updates accounting standards for employee benefit plans
The Financial Accounting Standards Board released an accounting standards update Monday aimed at improving financial reporting for an employee benefit plan’s interest in a master trust.
The standards update, which comes from FASB’s Emerging Issues Task Force, clarifies the presentation requirements for a benefit plan’s interest in a master trust and requires more detailed disclosures. The new standard also eliminates some redundant investment disclosures by health and welfare benefit plans.
A master trust holds assets of more than one plan, sponsored by a single employer or by a group of employers under common control. It generally has a financial institution, such as a bank or trust company, acting as trustee or custodian.
The amendments in the update take effect for fiscal years beginning after Dec. 15, 2018, although early adoption is allowed. FASB said companies should apply the amendments retrospectively to each financial period.