Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

CPA- FAR > F6 > Flashcards

F6 Flashcards

1
Q

What is a funded pension plan?

A

sponsor company makes contributions

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

What are the non-GAAP methods for pension plans?

A

pay as you go (expense) or terminal funding (buy annuity)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

What are the GAAP methods for pension plans?

A

Defined contribution or defines benefit plan

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

What is accumulated benefit obligation?

A

ABO = use current salary

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

What is projected benefit obligation?

A

PBO = guess future salary

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

What are prior service costs?

A

costs of benefits on past services b/c retroactive application of plan initiation or amendment

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

How do you calculate PBO?

A

Beg + service cost + interest cost + prior service cost + actuary losses – actuary gains – benefits paid = end

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Pensions v. Leases.

A

Pensions are Great! Leases use “lesser”

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

How do you calculate Net Periodic Pension Cost?

A

SIR AGE = Service Cost + Interest Cost – Return on Plan Assets + Amort PSC – Gains (Losses) + Amort Existing L or A = Net Periodic Pension Cost

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

What is the S in SIR AGE?

A

S = Service Cost = given = PV of benefits earned in current period

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

What is the I in SIR AGE?

A

I = Interest Cost = Beg. PBO * Discount Rate %

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

What is the R in SIR AGE?

A

R = (Return on Plan Assets) = actual or expected

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

How do you calculate the actual return?

A

Beg FV + Contributions + Actual Return – Benefits Paid = End FV

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

How do you calculate the expected return?

A

Beg FV x expected rate = expected return

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

What is the A in SIR AGE?

A

A = Amort of Unrecognized PSC = Beg. Unrecognized PSC / Avg remaining service life

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

What is the G in SIR AGE?

A

G = (Gains) and Losses = diff between actual and expected return, or G/L from change in actuary assumptions

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

How do you account for Gains or Losses

A

I/S or OCI w/ corridor approach

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

What is the corridor approach?

A

Unrecognized G/L – greater of 10% of (PBO or market relative value) = excess / avg remaining service life = amort G/L

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

What is the E in SIR AGE?

A

E = Amort Existing Net L or A = amort over greater of (15 years or avg remaining service life)

20
Q

Where are unamortized AGE recorded?

A

AOCI

21
Q

What is the funded status?

A

FV – PBO

22
Q

What is a pension plan asset?

A

noncurrent, overfunded: FV > PBO

23
Q

What is a pension plan liability?

A

Current, noncurrent, or both. underfunded: FV < PBO

24
Q

How do you calculate ending funded status?

A

Beg Funded Status + Contributions – SIR AGE = End funded status

25
Q

What is a pension settlement?

A

sell assets & buy annuity contracts

26
Q

What is curtailment?

A

service life decreases, or future benefits decrease

27
Q

What are termination benefits (formula)?

A

lump sum payments + PV termination benefits = special term benefit

28
Q

Disclosure

A

More = better. NOT repeat or too positive

29
Q

What are the requirements for accrual/liability recognition?

A

obligation is for services already rendered. Employee rights accumulate/vest. Payment is probable. Benefit can be reasonably estimated

30
Q

What is APBO?

A

Accumulated Postretirement Benefits Obligation = PV of future benefits known today

31
Q

What is EPBO?

A

Expected Postretirement Benefits Obligation = PV of future benefits expected = APBO + PV unknown

32
Q

What is the attribution period?

A

hire date through full eligibility date

33
Q

How is the Net Postretirement Benefit Cost calculated?

A

SIR AGE = Service Cost + Interest Cost – Return on Plan Assets + Amort PSC – Gains (Losses) + Amort Existing L or A = Net Periodic Pension Cost

34
Q

What is the E in SIR AGE for postretirement benefits?

A

E = Expense/Amort of Transition Obligation = expense full amt or (min amt = APBO – FV = Initial unfunded / 20 yrs or avg service life remaining)

35
Q

What is the liability recognition for deferred compensation?

A

at PV of benefits expected to date

36
Q

When are sick pay benefits accrued?

A

only when vested

37
Q

How is intraperiod tax allocation recorded?

A

IDEA & OCI (PUFE)

38
Q

What are the differences for interperiod tax allocation?

A

Permanent = current, not deferred. Temporary = current & deferred

39
Q

What is the income tax expense?

A

Expense = owe now (TI * tax %) + owe later (temp diff * future enacted %)

40
Q

What is a deferred tax liability (DTL)?

A

when tax deduct first, or F/S income first

41
Q

What is a deferred tax asset (DTA)?

A

gift certificate. Tax paid > expense. Use valuation allowance

42
Q

What is a valuation allowance?

A

Contra-account to DTA. Used if part of DTA is more than likely (>50%) not going to be used (IFRS = probable)

43
Q

What are uncertain tax provisions?

A

aggressive income tax positions

44
Q

What are the steps in uncertain tax provisions?

A

Step 1) test more likely than not if taken to highest court. Step 2) recognize largest tax benefit w/ 50%+ likelihood

45
Q

How do you treat changes in the enacted tax rate?

A

change in estimate. To IDEA

46
Q

How are the DTL/A classified?

A

Follow mama. Noncurrent/current. If no mama, use reversal date expected

47
Q

How are the DTL and DTA netted?

A

net current. Net noncurrent

CPA- FAR (9 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions