Securities Regulation Daily Wrap Up, ACCOUNTING AND AUDITING—FASB seeks comment on proposal for market-return cash balance plans, (Jun 12, 2026)

By Anne Sherry, J.D.

The Financial Accounting Standards Board (FASB) proposed an Accounting Standards Update (ASU) to improve existing guidance for certain market-return cash balance plans. The proposed ASU would specify the discount rate used to measure the benefit obligation for certain market-return cash balance plans. Comments are due August 10, 2026.

In market-return cash balance plans, interest crediting rates are based on investable market returns. The proposal, based on a recommendation of the Emerging Issues Task Force, addresses stakeholders’ concerns that because current guidance does not fully reflect these plans’ economics, companies may measure the benefit obligation using a discount rate that conflicts with the plan’s hypothetical account balance.

For plans that meet certain conditions, the amendments would require entities to use the assumed interest crediting rate as the discount rate for purposes of the benefit obligation under Subtopic 715-30. The amendments would not otherwise change how market-return cash balance plans are accounted for under the current guidance.

In FASB’s view, the amendments would both better reflect the economics of in-scope plans and reduce discrepancies in how the guidance is applied to those plans in practice.

The effective date of the ASU will be determined after the Board considers stakeholder feedback on the amendments. The Board seeks input on eight questions and asks that commenters who disagree with the proposal describe their suggested alternatives and the reasoning.

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