Getting Started: Applying New Accounting Rules for Measuring and Reporting Fair Value of Plan Investments
Considerations for Employee Benefit Plan Implementation of FASB Statement No. 157, Fair Value Measurements
Employee benefit plans are now required to implement new accounting rules for valuing and reporting the fair value of their investments in the plan’s financial statements. The EBPAQC has prepared this document to help plan sponsors and administrators implement the new requirements of Statement of Financial Accounting Standards No. 157, Fair Value Measurements (FAS 157). FAS 157 establishes a framework for measuring fair value under generally accepted accounting principles (GAAP), clarifies the definition of fair value within that framework, and expands financial statement disclosures about the use of fair value measurements. While employee benefit plans currently report plan investments at fair value in their financial statements, the FAS 157 framework for measuring fair value may change current valuation practices for certain investments and requires additional disclosures about the use of fair value measurements.