Concepts CH 11 Flashcards
Contribution Plan Expense
Amount calculated based on plan
Benefit Plan - Key points
Employer risk Plan Must Recognize: Pension expense Funding Required Funded Status
Benefit Plan - Measurement
At date of bal sheet
- PV reflected TVM probability of future events
Plan Assets change because
ROI (up or down)
Benefit Payments
Contribution from employer
Pension Benefit Plan - Funded Status
Balance sheet must report Funded (asset) or underfunded (liability) components reported in OCI
G/L
Amortization of G/L & Prior Cost/Credit
Compensated Absenses
GAAP require accrual for comp absenses when comp related to services previously provided, the benefits either vest or accumulate, and payment is both probable and reasonable to estimate
Sick Pay
Must accrue only if rights vest
Funded Status should be reported in
Statement of financial position
Plan assets change as a result of
Actual return on investment
Benefit payments
Contributions
A public or nonpublic entity must disclose a defined benefit pension plan related information
1) Net gain/(loss) and prior service cost/(credit) recognized in OCI for the period
2) Reclassification adjustments of OCI recognized in net periodic benefit cost for period
3) items still in OCI
Service Cost
Is the actuarial PV of benefits attributed by the pension formula to services rendered during the period. It is a component of PBO
A public entity must disclose in notes a reconciliation of
The beginning and ending balance of PBO
Pension Note Disclosure
1) Funded Status
2) Components of periodic pension costs
3) Reclassification of adj of OCI for period
IFRS Discount rate
Interest income on plan assets is recognized based on the same discount rate used to discount PBO
IFRS past service cost
Recognized immediately as pension expense in p & l
Recognized at the earlier of
1) Plan Amendment
2) Recognition of related restructuring costs or termination benefits
A pension asset must be recognized for
Excess of FV Plan assets over PBO at balance sheet date
A pension liability must be recognized for
Excess of PBO over FV of plan assets at balance sheet date
Components of minimum pension expense
1) Service Cost
2) Interest Costs
3) Return on Plan assets
4) Amortization of Gain/Loss
5) Amortization of Prior Service Cost/Credit
The cost of employee services performed in exchange for an award of equity interest is
recognized over requisite service period
beginning of period is usually grant date
Grant date
1) Mutual understanding of key terms and conditions of share based payment is reach by EE and ER
2) The employer becomes contingently obligated to issue share-based payments to employees who renders requisite services
3) Any necessary approvals are obtained
4) The subsequent changes to market price begin to affect employee
Vesting Period
Begins at grant date and ends when requisite service conditions have been met
The PV of future benefits earned by employees in current period
Services Costs
A retroactive decrease in benefits
Prior service credit
Increase in PBO resulting from passage of time
interest costs
