Practical Expedient Created for Defined Benefit Plans

Entities with year-ends that do not fall at the end of a month have a new practical expedient that may be elected when measuring the fair value of defined benefit plan assets.

Accounting Standards Update 2015-04, Compensation — Retirement Benefits (Topic 715), allows these entities to use fair value measurement dates from the calendar month-end nearest to the entity’s year-end. For example, if an entity’s year-end were June 10, the entity would be able to use the fair value measurements of its defined benefit plan assets from May 31.

Learn more about this new accounting standard in our latest MHM Messenger.

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