FAR 5A Flashcards
Barrett Co. maintains a defined benefit pension plan for its employees. At each balance sheet date, Barrett should report pension liability equal to the…
Unfunded projected benefit obligation.
What is the present value of all future retirement payments attributed by the pension benefit formula to employee services rendered prior to that date only?
Accumulated benefit obligation.
A defined benefit plan’s projected benefit obligation totaled $20mn at the end of the current year. Plan assets at market value totaled $23mn. What is the correct balance sheet reporting for this plan.
$3mn pension asset. PBO and assets are netted for balance sheet reporting purposes.
How should plan investments be reported in a defined benefit plan’s financial statements?
At fair value.
The journal entry to record a $5,000 actuarial gain at year-end includes:
Credit pension gain/loss-other comprehensive income.
Firms are required to make extensive disclosures about employer-sponsored pension plans. Those disclosures include:
(a) A description of the plan (b) The amount of pension expense by component (current service cost, interest cost, return on plan assets, etc.) (c) The weighted average discount rate used in pension calculations.
A firm is applying international accounting standards to its defined-benefit pension plan. The firm has chosen to recognize its pension gains and losses in other comprehensive income. As a result,
The firm’s earnings will not be affected.
What is not covered by the accounting standard applicable to non-retirement post-employment benefits?
Post-retirement healthcare benefits.
An overfunded single-employer defined benefit postretirement plan should be recognized in a classified statement of financial position as a
Noncurrent asset.
What is unique to post-retirement healthcare benefits?
Per capita claims.
