This page is for those of you who may have stumbled on to this web site by mistake and are wondering what the heck FASB ASC 715-60 and post retirement healthcare benefits are all about.
Most employees covered by some form of employer sponsored healthcare plan.
As you no doubt know, employees are usually covered for health insurance by an employer sponsored group healthcare plan. In most cases the coverage ceases when the employee terminates employment (to be more precise, when the COBRA extended coverage ceases). Some employers, however, continue to cover those retirees who have satisfied certain predetermined requirements, such as age 55 with 15 years of service with the organization.
FASB ASC 715-60: Accounting standard for post retirement healthcare plans
FASB ASC 715-60 which stands for the Statement of Financial Accounting Standards No. 715-60, defines the manner in which the expense for post retirement healthcare and other non-pension benefits must be recorded for financial statement purposes. It is a standard that was issued by the Financial Accounting Standards Board in December, 1990 under the name FAS 106.
FASB ASC 715-60 requires the cost of post retirement healthcare benefits to be accrued generally over the employee’s working lifetime
FASB ASC 715-60 generally requires the cost of post retirement healthcare benefits to be accrued over the working lifetime of the employee. Prior to FASB ASC 715-60, such cost was usually recorded on a pay-as-you-go basis. As an example, if an employer sponsored a self funded plan and a retiree incurred a $1,000 covered healthcare expense, such expense was recorded on the company books in the year the hospital or doctor bill was paid by the plan.