OUR THOUGHTS ON:

2013 Plan Year Financial Reporting for ERISA Plans: Piece of Cake!

ERISA

By Jenna Zelenski

Over the course of the past few years, there have been significant changes to financial reporting requirements for employee benefit plans.  We saw the evolution of disclosures under Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 820 – Fair Value Measurements.  This began in 2008, when investments had to be grouped into three different categories based upon valuation techniques, and a roll-forward of Level 3 investments was required.  Most recently, in 2012, required disclosures for investments measured at fair value based on net asset value per share were expanded to include such information as unfunded commitments, redemption frequency and redemption notice period.

The good news for 2013 plan audits is that the new Accounting Standards Updates (ASU) 2013-01 and 2013-07 do not have a significant, if any, impact to reporting requirements.  ASU No. 2013-01, Balance Sheet: Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities recognizes derivatives, repossessions and reverse repossessions, and securities borrowing and securities lending transactions that are either offset under other U.S. GAAP or subject to enforceable master netting arrangement or similar agreement.  ASU No. 2013-07 clarifies when and how to use liquidation basis of accounting.

Also, while not authoritative, the AICPA Financial Reporting and Executive Committee (FinREC) released a series of recommendations that are included in the plan-specific chapters of the newly overhauled Employee Benefit Plans Audit and Accounting Guide.  These recommendations provide guidance that has been supported by the FinREC on the accounting, reporting or disclosure treatment of transactions or events that are not set forth in the FASB ASC.

Everyone can breathe a sigh of relief knowing that there are not any major considerations that need to be made relating to financial reporting for employee benefit plans….. at least for the 2013 plan year, that is.

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© 2018 Schneider Downs. All rights-reserved. All content on this site is property of Schneider Downs unless otherwise noted and should not be used without written permission.

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