FASB ASC 960 defines accounting and financial reporting standards for which plans?

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Multiple Choice

FASB ASC 960 defines accounting and financial reporting standards for which plans?

Explanation:
The key idea here is understanding which type of employee benefit plan is covered by ASC 960 for accounting and financial reporting. This standard provides the framework for how sponsors of defined benefit plans recognize, measure, and disclose the plan’s obligations, assets, and related costs in their financial statements. In a defined benefit plan, the employer promises a specific benefit at retirement based on an formula that considers service years and compensation, creating long‑term obligations and assets to report. That’s why the best answer is the defined benefit plan. Defined contribution plans, by contrast, are accounted for under different guidance because the employer’s obligation is limited to contributing set amounts to individual employee accounts, with benefits determined by investment performance rather than a promised formula. Government plans fall under GASB rather than FASB, and health or welfare benefit plans have their own, separate guidance.

The key idea here is understanding which type of employee benefit plan is covered by ASC 960 for accounting and financial reporting. This standard provides the framework for how sponsors of defined benefit plans recognize, measure, and disclose the plan’s obligations, assets, and related costs in their financial statements. In a defined benefit plan, the employer promises a specific benefit at retirement based on an formula that considers service years and compensation, creating long‑term obligations and assets to report.

That’s why the best answer is the defined benefit plan. Defined contribution plans, by contrast, are accounted for under different guidance because the employer’s obligation is limited to contributing set amounts to individual employee accounts, with benefits determined by investment performance rather than a promised formula. Government plans fall under GASB rather than FASB, and health or welfare benefit plans have their own, separate guidance.

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