Market-related value of plan assets belongs in a plan-specific employer file. Market-related value is a permitted policy measure used for specified expected-return or gain-and-loss calculations. The policy identifies its averaging or smoothing method, period, consistency, and reconciliation to fair value.
Apply it
If fair value is $16.15 million but the supported market-related value is $15.6 million, funded status still uses fair value. Only the named cost or amortization calculation uses $15.6 million.
Common mistake
Do not assume that market-related value may be any smoothed asset number management prefers. The method must follow Topic 715, remain within its limits, and be applied consistently. That error would permit unsupported smoothing to change pension cost without a consistent accounting policy.
Keep the boundary clear
A smoothed amount cannot defer a balance-sheet fair-value loss. Accounting applies the documented policy and does not choose one to obtain smoother earnings.
Authority
Read ASC 715-30-55-39 for the effects of market-related value on pension cost.
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- Pension plan assets — Apply
To apply this concept: Required. This prior concept supplies the plan route or reconciled input required here.