F6 - Postretirement Benefits Flashcards
What are the components of net postretirement benefit cost (postretirement expense) under U.S. GAAP?
Service cost
Interest cost
Return on plan assets
Amortization of prior service cost
Gains and losses
Expense/Amortization of transition obligation
How do we account for postretirement benefits on the balance sheet under U.S. GAAP?
The funded status of the postretirement benefit plan must be shown as a noncurrent asset (if overfunded) or a current liability, a noncurrent liability, or both (if underfunded). Changes in funded status due to net gains or losses, prior service costs, or net transition assets or obligations should be shown in accumulated other comprehensive income until amortized to net periodic postretirement benefit cost.
What are some of the required disclosures for postretirement benefit plans?
I dread having to disclose this stuff!
Description: A description of the plan.
Reconciling items: A schedule reconciling funded status of the plan, including all reconciling items (FVPA, APBO, EPBO, etc.).
Expense and OCI components: Components of net periodic postretirement benefit cost, including all components, and accumulated OCI.
Actuarial assumptions: Assumptions and rates used in computing APBO and EPBO, including assumend health care cost trend rate, effect of 1% increase/decrease in assumed health care cost trend rates.
Discount rate: The weighted-average discount rate.
