CH 13. - Pensions & Postemployment

Question 1

Pension plans must provide a ____________________

Answer 1

statement of net assets available for benefits and a statement of changes in net assets available for benefits.

Question 2

Common Cost of Postretirement Benefits _____________.

Answer 2

Service Costs,
Prior Service Costs
Interest Cost

Question 3

Unique Cost to Postretirement Healthcare

Answer 3

Per Capita Claims

Question 4

Prior service cost (PSC) is ___________________

Answer 4

The projected benefit obligation resulting from establishing (or amending) a pension plan.

• **Initial PSC is deferred and charged to OCI
• **Amortized Systematically over the remaining years of service of the employees by debiting pension expense and crediting (increasing) OCI

Question 5

Plan Assets are recorded at _____________.

Answer 5

Fair Value

Question 6

What disclosures should be made in a company’s Financial Statement _______________.

Answer 6

1) A description of the company’s funding policies and types of assets held.
2) The amount of net periodic pension cost for the period.
3) The fair value of plan assets.

Question 7

At year-end, the funded status (projected benefit obligation minus the ending fair value of the plan assets) for defined benefit plans is reported on the ___________________.

Answer 7

Balance Sheet.

Underfunded = Liability 
Overfunded = Asset