FAR 6 Flashcards
How to calculate the funded status under GAAP?
FV- PBO = Funded Status
if positive = overfunded- noncurrent asset
if negative = underfunded - current or noncurrent liability
What is the attribution period?
It starts with the employees date of hire and end is when they have full eligibility.
How do you calculate underfunded status when there is a balance in the following year?
FV - PBO = funded status if understated can be offset and report liability in current amount up to the amount of CY FV - following year benefit payable.
Remaining balance goes to noncurrent liability
Can you accrue a liability when the compensation is accumulated or vested?
Both. If all four criteria are met
- services have been rendered
- obligation relates to vested or accumulated rights
- amount can be reasonable estimated
- payment is probable
What approach is used to determine income tax expense?
the asset and liability approach
When there is a temporary difference that will reverse during the next year and add to taxable income how should these differences be classified.
as a non-current liability
How do you account for deferred tax liabilities and assets on the balance sheet?
Both current and noncurrent deferred tax liabilities and assets should be netted together
What would increase deferred tax liability?
an increase in rent receivable and increase in prepaid insurance
What should be disclosed in the FS related to deferred taxes?
You should disclose existing temporary differences and the nature and amount of each type of operating loss and tax credit carryforward.
Dont disclose Permanent differences- they are not deferred taxes
