Handbook: Employee benefits

Using Q&As and examples, this new guide explains in detail the accounting for general employee compensation, nonretirement postemployment benefits, retirement benefits and employee stock ownership plans (ESOPs).

Applicability

• ASC 420, ASC 710, ASC 712, ASC 715 and ASC 718-40
• All entities

Relevant dates

• Effective immediately

A significant and changing expense

Wages and salaries are typically the largest component of employee benefits, but they are not the only component. There are a myriad of other types of benefits – from compensated absences such as vacation days to retirement plans that cover large groups of employees – and the accounting can be complex.

Further, the marketplace is changing. There is fierce competition for qualified employees. And employees are changing jobs more often, but generally staying in the workforce to a later age. These trends are causing many companies to rethink their approach to employee benefits – offering different compensation packages or sweetening existing packages to attract and retain qualified people.  

And then there are the fluctuations in financial markets that can make it more difficult to project the cost of benefits promised to employees in the future. This too can lead companies to consider changing benefit plans to lessen earnings volatility. 

Amidst this changing landscape of employee benefits, we hope you use this Handbook as a reference. We’ve organized it in a Q&A format that makes it easy to identify the answers to both the common and the more uncommon questions.

Report contents

• Scope
• Compensation: General
• Termination benefits and other nonretirement postemployment benefits
• Retirement plans: General and defined contribution plans
• Defined benefit (DB) pension and other postemployment employment benefit (OPEB) plans: Plan assets and obligations
• DB pension and OPEB plans: Costs
• DB pension and OPEB plans: Assumptions and attribution
• DB pension and OPEB plans: Settlements, curtailments and certain termination benefits
• Retirement plans: Special topics, including multiemployer plans
• Retirement plans: Disclosure
• Employee stock ownership plans

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