Allergan, Inc. Retirement 401(k) Plan
Notes to the Financial Statements
Years Ended December
31, 2018 and 2017
Payment of Benefits
Payments to participants are recorded when paid.
Recent Accounting Pronouncements
In August, 2018, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update
No. 2018-13
(ASU
2018-13),
Fair Value Measurement (Topic 820) Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement.
The amendments in this update apply to all entities that are required to make disclosures about recurring or nonrecurring fair value measurements. ASU
2018-13,
eliminates, adds and modifies certain disclosure
requirements for fair value measurements as part of its disclosure framework project. ASU
2018-13
is effective for fiscal years beginning after December 15, 2019 and interim periods within those fiscal
years. The amendments on changes in unrealized gains and losses, the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements, and the narrative description of measurement uncertainty
should be applied prospectively for only the most recent annual period presented in the year of adoption. All other amendments should be applied retrospectively to each period for which the financial statements are presented. Early adoption is
permitted. An entity is permitted to early adopt any removed or modified disclosures and delay adoption of the additional disclosures until their effective date.
The Plan elected to adopt ASU
2018-13
as of and for the year ended December 31, 2018. There is no
effect on the Plans financial statements.
3.
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Related Party and Party in Interest Transactions
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Certain investments are managed by Fidelity Management Trust Company, who acts as the Plan trustee. These transactions qualify as
party-in-interest
transactions which are exempt from the prohibited transaction rules under ERISA.
The Plan paid approximately $2,072,000 to Fidelity in fees and expenses for the year ended December 31, 2018. The Plan paid approximately
$395,000 in legal and advisory fees and expenses.
The value of the Allergan plc ordinary shares is $171,793,017 and $224,435,610 as of
December 31, 2018 and 2017, respectively. At December 31, 2018 and 2017, there were 1,285,299 and 1,372,023 ordinary shares of the Allergan plc stock held in the Plan, respectively.
Fidelity provides certain administrative services to the Plan and receives revenue from mutual fund providers for services the trustee
provides to the funds. This revenue is used to offset certain amounts owed to Fidelity for its administrative services to the Plan. If the revenue received by Fidelity from such mutual fund service providers exceeds the amounts owed, Fidelity remits
the excess to the Plan pursuant to the service agreement. Such amounts may be applied to pay the Plan administrative expenses or allocated to the accounts of the participants. During the year ended December 31, 2018, the Plan earned
approximately $516,240, of which approximately $126,460 was received subsequent to December 31, 2018 and is reflected as a receivable on the statement of net assets available for benefits and included in net realized/unrealized depreciation in
fair value of investments on the statement of changes in net assets available for benefits. At December 31, 2018 and 2017, the account balance was approximately $213,000 and $482,000, respectively. During the year ended December 31, 2018,
the Plan utilized approximately $788,000 of the funds to pay administrative expenses, which is included in Note 1.
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