Standard Issued by FASB for the Disclosures by Nonpublic Employee Benefit Plans

Wednesday, July 10, 2013 Print Email

Recently, FASB launched new update in the accounting standards called ‘Fair Value Measurement (Topic 820): Deferral of the Effective Date of Certain Disclosures for Nonpublic Employee Benefit Plans in Update No. 2011-04’.

Nonpublic employees provide the disclosures about investments that play a key role in the business; as far as the date of disclosures of advertisements is concerned they can’t decide on their own. ASU defers always the certain date for the disclosure of advertisement.

ASU has provided certain provisions which are as follows

Update 2011-04 of quantitative information which plays a significant role in observable input that has been used in level 3. This level is held by nonpublic employee benefit plan in the fair value measurements for investment which includes securities such as sponsor’s own nonpublic entity equity securities.

Affiliated entities are also included in the equity securities such as sponsor’s nonpublic affiliated entities. There will not be any kind of amendments taking place if the nonpublic entity equity securities are taking place in the qualitative disclosures.

Also it is stated that amendments are forbidden if the effective dates for the certain quantitative disclosures for other nonpublic entity equity securities have taken place in the benefit plan of the nonpublic employee.

Hence it is of significant importance that the qualitative disclosures are not held by nonpublic entity equity securities in the effective date.

Therefore, new rules have been set out in this regard which demand that nonpublic entities are required to provide proprietary information about nonpublic entities. But this condition is applied to those nonpublic entities which have annual periods beginning after December 15, 2011.

The provision of proprietary information about nonpublic entities by nonpublic entities must be showcased on the website by the dissemination of their employee benefit plans. They must also include financial statements on the regulator’s website.

As far as the financial statements which have not been issued up till now will have the deferral will be effective instantly in this regard.

FASB is keen on getting the progressive results after issuing the Accounting Standards Update (ASU) to defer the nonpublic employee benefit plans regarding certain disclosure. 

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