The Financial Accounting Standards Board (FASB) has issued an ASU that will change how expenses are presented for companies that sponsor defined benefit plans.
In short, ASU 2017-07 requires companies to present the service cost component of net benefit cost in the income statement line items where they report compensation cost. Gross profit and operating income may be affected for many companies, as compensation cost is generally not presented as a “below the line” expense.
Early adoption of this ASU is permitted. It must be placed into effect for non-public entities beginning in calendar 2019. If this affects you, please reach out to us and we’ll guide you through the implementation process.
If you would like to learn more about this topic, please contact:
Kenneth R. Cerini, CPA, CFP, FABFA
Ken is the Managing Partner of Cerini & Associates, LLP and is the executive responsible for the administration of our not-for-profit and educational provider practice groups. In addition to his extensive audit experience, Ken has been directly involved in providing consulting services for nonprofits and educational facilities of all sizes throughout New York State in such areas as cost reporting, financial analysis, Medicaid compliance, government audit representation, rate maximization, board training, budgeting and forecasting, and more.