ASC 820 Disclosures

[Tinman]

We are a bundled provider with plan assets invested in a daily valued group annuity contract. Within the contract is not only a guaranteed account, but also a separate account that houses underlying investments (one separate account in which the plan may have 20 funds in which they have invested).

Do the disclosure regulations require a fair value report on the underlying investement within the separate account?

Our actuaries are telling us they do not have to provide that information, however we have had multiple auditors for our large filers that are insisting we do have to provide it.

Any help would be appreciated!

[Hojo]

If it is a pension plan that is subject to the PBGC and must issue an AFN, then yes, they do need that information. If it is a plan that does not issue an AFN, then they don't really care all that much.

[Tinman]

Thanks for the response, Hojo!

Our main business is 401(k) plans, individual accounts, daily valued, so not subject to PBGC. And I would say about 1/3 of the auditors for our large filers have requested this. Some have been content with the answer that this is a group annuity contract with assets in a separate account, but others are pressing harder......

[rcline46]

Have the auditors give you the cite - verse and chapter - that says it is required. Then look it up to see if it is necessary.

The problem is that auditors have quite some leeway in what they want, and it varies by CPA firm. I would think you would have a trustee here, or a custodian that provides a report to push the audit into the 'limited scope' arena and avoid the questions.

[david rigby]

820 contains some exceptions in 820-10-15-3. Verify whether any apply to your situation.