Employee/Retiree Benefit Plans Flashcards
1
Q
- Define accumulated benefit obligation
A
The present value of all unpaid future retirement benefits as of the balance sheet date based on (1) service rendered that date and (2) current salary levels
Note that pbo uses future salary levels
2
Q
- If a company has 2 pension plans are they able to net plans that are overfunded with plans that are underfunded?
A
No cannot net overfunded vs underfunded plans, must report separately
3
Q
- if a firm is applying international accounting standards to its defined benefit pension plan and has pension gains and losses will earnings be affected?
A
No - pension gains and losses are recognized immediately and in full in AOCI.
