7: Pensions and Equity

Question 1

SIR AGE pneumonic

Answer 1

S: current service cost
I: interest cost
R: 
A: amortization of prior service costs
G:  and losses
E: amortization of existing net obligation or net asset
=Net periodic pension cost

Question 2

Defined Benefit Plan

Answer 2

Benefits theta the employee receives are determined by a formula

Question 3

Defined Contribution Plan

Answer 3

Contributions that the sponsor company makes to the plan are defined by a formula.

Question 4

Minimum recognized amount of gains and losses under GAAP

Answer 4

Unrecognized gain or loss
<10% of the greater of PBO or FMV of plan assets at the beginning of year>
= (Excess)/ Avg remaining service life