US GAAP · ASC 715-30
ASC 715 Actuary in Switzerland
Swiss subsidiary of a US group? We value your Swiss pension obligations under ASC 715-30 and deliver the reporting package your parent company and its auditors expect.
A Swiss plan in US financial statements
The guarantees of the Swiss LPP/BVG make Swiss pension plans defined benefit under US GAAP as well. ASC 715-30 requires an actuarial valuation with rules of its own that differ from IAS 19: presentation of pension cost, expected return on plan assets, amortisation of actuarial gains and losses through AOCI (corridor method), prior service cost, settlements and curtailments.
We have prepared these valuations for many years for Swiss subsidiaries of US-listed groups — working directly with consolidation teams and group actuaries, in English.
The impact of ASC 715 on your consolidated accounts
An ASC 715 valuation does more than translate Swiss figures into dollars: it redefines how pension obligations are accounted for, often diverging significantly from the Swiss statutory accounts. The impact shows at three levels.
Balance sheet: recognising the funded status
ASC 715 requires the company to recognise on its balance sheet the difference between the present value of the obligations (projected benefit obligation, PBO) and the fair value of plan assets. If the plan is underfunded, the company records a liability; if overfunded, an asset may be recognised.
Worth noting: even where a Swiss pension fund is healthy under the LPP/BVG (coverage ratio above 100 %), the ASC 715 calculation can reveal a liability on the employer’s balance sheet — mainly because of different discount rates, based on high-quality (AA) corporate bonds.
P&L: the net periodic benefit cost
The valuation determines the annual charge to be booked, the net periodic benefit cost — often different from the contributions actually paid to the pension fund. It includes:
- the cost of services rendered by employees during the year (service cost);
- the interest cost on the obligation;
- less the expected return on plan assets.
Equity: managing volatility through OCI
Actuarial gains and losses — a sudden move in interest rates, unexpected market performance — are generally not charged immediately to P&L: they flow through other comprehensive income (OCI). This smooths earnings, but directly affects the level of consolidated equity.
An ASC 715 valuation thus provides an economic, fair-value view of your pension obligations. Our aim: help you anticipate these impacts and avoid excessive volatility in your consolidated financial statements.
Discount rate sensitivity
Illustrative — 15-year duration. Base: 15-year CHF AA rate, .
A typical engagement
- Full ASC 715-30 valuation at your reporting date
- Switzerland-specific assumptions aligned with group policy: CHF discount rate, expected return, mortality
- Net periodic pension cost (NPPC) and US GAAP journal entries
- ASC 715-20 disclosures, ready for the reporting package
- Event calculations: settlements, curtailments, plan amendments
- Direct exchanges with the group actuary and auditors, within their deadlines
What the disclosure shows
IAS 19 and ASC 715 at the same time?
Many of our clients report under both frameworks — IFRS for a European sub-group, US GAAP for the American consolidation. We deliver both valuations from the same data, with a clear reconciliation of the differences. See also our IAS 19 actuary page.
Frequently asked questions
How does ASC 715 differ from IAS 19?
Both standards treat Swiss plans as defined benefit, but they diverge on the presentation of pension cost, the recognition of actuarial gains and losses (AOCI and corridor under US GAAP, OCI without recycling under IFRS), the expected return on plan assets and the treatment of plan amendments.
Why is our Swiss plan defined benefit under US GAAP?
Because Swiss law guarantees a conversion rate, minimum interest and statutory benefits — economic obligations of the employer. ASC 715 therefore requires a full actuarial valuation, as for a classic defined benefit plan.
Our group sets the assumptions — what latitude is left?
Financial assumptions must reflect the Swiss market: a discount rate based on high-quality CHF corporate bonds and Swiss mortality tables. We document these country-specific choices and align them with the group’s assumptions policy, so the file holds up with the auditors.
How often is an ASC 715 actuarial valuation required?
As a rule, a full valuation is performed every year at the fiscal year-end. Several situations change that rhythm:
- annual reporting: the closing requires a precise measurement of the PBO and of next year’s service cost;
- quarterly or half-year reporting: for listed companies or subsidiaries of large groups, simplified roll-forward estimates are often sufficient between two full studies;
- significant events (remeasurement): plan amendments, workforce reductions (curtailment) — a restructuring, or vested benefits paid out exceeding 10 % of plan assets or of the obligation —, settlements (e.g. a pensioner buy-out);
- market volatility: when rates or returns move sharply, more frequent simulations help anticipate the impact on equity (OCI).
Our approach: start the work a few months before year-end to validate the actuarial assumptions (discount rate, mortality tables…) with your auditors and avoid surprises at consolidation — and plan the data requests early; complete, consistent data can take time to obtain.
Do you also provide the disclosures?
Yes — the tables required by ASC 715-20, ready to drop in, together with reconciliations and supporting documentation for your auditors.
An independent actuary for your US GAAP reporting
100 % owned by its active partners, with no ties to banks or insurers. Offices in Baar and Lausanne, engagements across Switzerland.