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Users of financial statements—including federal labor and tax officials—should have better information on the health of employee benefits plans guided by bank-run master trusts, under accounting rules issued by the Financial Accounting Standards Board.
Many employee benefit plans hold investments in master trusts, according to the new standard issued Feb. 27—Accounting Standards Update 2017-06; ASC 960, ASC 962 and ASC 965.
FASB aims for employee plans to clarify better what investment holdings are contained in the plans run by the trusts. FASB also wants to make the accounting easier.
According to the new rules, a master trust is a trust for which a regulated bank, trust company or similar regulated financial institution:
The standard calls for a plan that holds investments in a master trust to present balances and activity of the master trust on a net basis and in a single line item.
The board also enhanced footnote disclosures on the affected plans.
The rules, which are effective for fiscal years starting after Dec. 15, 2018, reflect a marketplace shift from defined benefit plans to defined contribution plans.
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The new FASB standard is available at http://src.bna.com/mxu
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