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FAR2C18 E Flashcards

1
Q

State all content information
Key Differences Between ABO and PBO:
4
6

Part 1 Only

A

1) Key Differences Between ABO and PBO:
2) What are Actuarial Gains and Losses?
3) What are Actuarial Assumptions?
4) Types of Actuarial Assumptions:

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2
Q

State all content information
Key Differences Between ABO and PBO:
4
6

Part 1 Only

1) Key — Between — and —:
2) What are — — and —?
3) What are — —?
4) — of — —:

A

1) Key Differences Between ABO and PBO:
2) What are Actuarial Gains and Losses?
3) What are Actuarial Assumptions?
4) Types of Actuarial Assumptions:

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3
Q

State all content information
Key Differences Between ABO and PBO:
4
6

Part 2 Only

A

1) What are Demographic Assumptions in actuarial valuation?
2) What are Financial Assumptions in actuarial valuation?
3) What are the main causes of Actuarial Gains and Losses?
4) How is actuarial loss determined?
5) How is actuarial gain determined?
6) How are actuarial gains and losses recognized under PAS 19R?

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4
Q

State all content information
Key Differences Between ABO and PBO:
4
6

Part 2 Only

1) What are Demographic — in — —?
2) What are — — in — valuation?
3) What are the — — of —- Gains and Losses?
4) How is — — —?
5) How is — — —?
6) How are — gains and losses — under PAS —?

A

1) What are Demographic Assumptions in actuarial valuation?
2) What are Financial Assumptions in actuarial valuation?
3) What are the main causes of Actuarial Gains and Losses?
4) How is actuarial loss determined?
5) How is actuarial gain determined?
6) How are actuarial gains and losses recognized under PAS 19R?

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5
Q

State all content information
Key Differences Between ABO and PBO:
4
6

A

1) Key Differences Between ABO and PBO:
2) What are Actuarial Gains and Losses?
3) What are Actuarial Assumptions?
4) Types of Actuarial Assumptions:

1) What are Demographic Assumptions in actuarial valuation?
2) What are Financial Assumptions in actuarial valuation?
3) What are the main causes of Actuarial Gains and Losses?
4) How is actuarial loss determined?
5) How is actuarial gain determined?
6) How are actuarial gains and losses recognized under PAS 19R?

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6
Q

Key Differences Between ABO and PBO:

A
  • Salary Basis:
    o Accumulated Benefit Obligation: Based on current salary.
    o Projected Benefit Obligation: Based on future salary.

Additional Note:
* Defined Benefit Obligation: Under PAS 19R, the defined benefit obligation refers specifically to the projected benefit obligation (PBO).

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7
Q

Key Differences Between ABO and PBO:

  • — —:
    o — — —: — on — —.
    o — — —: — on — —.

— —:
* — — —: Under PAS —, the defined — obligation refers specifically to the — benefit obligation (—).

A
  • Salary Basis:
    o Accumulated Benefit Obligation: Based on current salary.
    o Projected Benefit Obligation: Based on future salary.

Additional Note:
* Defined Benefit Obligation: Under PAS 19R, the defined benefit obligation refers specifically to the projected benefit obligation (PBO).

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8
Q

What are Actuarial Gains and Losses?

A

What are Actuarial Gains and Losses?
* They are changes in the present value of the defined benefit obligation due to:

  1. Experience Adjustments: The differences between previous actuarial assumptions and actual events.
     Example: Events such as employee turnover or salary increases that differ from expectations.
  2. Changes in Actuarial Assumptions: Updates in the assumptions used to estimate the future obligations.
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9
Q

What are Actuarial Gains and Losses?

  • They are — in the — value of the defined — obligation due to:
  1. — —: The — between — actuarial assumptions and — events.
     Example: Events such as employee — or salary — that differ from —.
  2. — in — —: — in the — used to — the future obligations.
A

What are Actuarial Gains and Losses?
* They are changes in the present value of the defined benefit obligation due to:

  1. Experience Adjustments: The differences between previous actuarial assumptions and actual events.
     Example: Events such as employee turnover or salary increases that differ from expectations.
  2. Changes in Actuarial Assumptions: Updates in the assumptions used to estimate the future obligations.
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10
Q
  • They are changes in the present value of the defined benefit obligation due to:
  1. Experience Adjustments: The differences between previous actuarial assumptions and actual events.
     Example: Events such as employee turnover or salary increases that differ from expectations.
  2. Changes in Actuarial Assumptions: Updates in the assumptions used to estimate the future obligations.
A

Actuarial Gains and Losses

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11
Q

What are Actuarial Assumptions?

A
  • They are best estimates of variables determining the cost of postemployment benefits.
  • Key Criteria:
    1. Unbiased: Assumptions are neither imprudent nor overly conservative.
    2. Mutually Compatible: Assumptions reflect economic relationships, e.g., inflation and salary increases.
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12
Q

What are Actuarial Assumptions?

  • They are best — of variables determining the — of — benefits.
  • Key Criteria:
    1. —: Assumptions are neither imprudent nor overly conservative.
    2. — —: Assumptions reflect — —, e.g., — and salary increases.
A
  • They are best estimates of variables determining the cost of postemployment benefits.
  • Key Criteria:
    1. Unbiased: Assumptions are neither imprudent nor overly conservative.
    2. Mutually Compatible: Assumptions reflect economic relationships, e.g., inflation and salary increases.
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13
Q
  • They are best estimates of variables determining the cost of postemployment benefits.
  • Key Criteria:
    1. Unbiased: Assumptions are neither imprudent nor overly conservative.
    2. Mutually Compatible: Assumptions reflect economic relationships, e.g., inflation and salary increases.
A

Actuarial Assumptions

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14
Q

Types of Actuarial Assumptions

A
  1. Demographic Assumptions: Related to the characteristics of the workforce (e.g., employee turnover, mortality).
  2. Financial Assumptions: Related to financial variables (e.g., inflation, discount rates, return on plan assets).
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15
Q

Types of Actuarial Assumptions

  1. — —: — to the — of the — (e.g., employee turnover, mortality).
  2. — —: — to — — (e.g., inflation, discount rates, return on plan assets).
A
  1. Demographic Assumptions: Related to the characteristics of the workforce (e.g., employee turnover, mortality).
  2. Financial Assumptions: Related to financial variables (e.g., inflation, discount rates, return on plan assets).
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16
Q

What are Demographic Assumptions in actuarial valuation?

A
  1. Mortality
  2. Rate of employee turnover
  3. Disability
  4. Early retirement
  5. Proportion of plan members eligible for benefits
  6. Claim rates under medical plans
17
Q

What are Demographic Assumptions in actuarial valuation?

  2. — of — —
  5. — of plan members — for —
  6. — — under — plans
A
  1. Mortality
  2. Rate of employee turnover
  3. Disability
  4. Early retirement
  5. Proportion of plan members eligible for benefits
  6. Claim rates under medical plans
18
Q

What are Financial Assumptions in actuarial valuation?

A
  1. Discount rate
  2. Future salary and benefit levels
  3. Future medical costs
  4. Taxes payable by the plan
19
Q

What are Financial Assumptions in actuarial valuation?

  2. Future — and — —
  4. — — by the —
A
  1. Discount rate
  2. Future salary and benefit levels
  3. Future medical costs
  4. Taxes payable by the plan
20
Q

What are the main causes of Actuarial Gains and Losses?

A
  1. Unexpected high or low rate of employee turnover, early retirement, or mortality
  2. Increases in salary
  3. Changes in benefit payment options
  4. Changes in discount rate
21
Q

What are the main causes of Actuarial Gains and Losses?

  1. — high or low rate of employee turnover, — retirement, or —
  2. — in —
  3. — in benefit — —
  4. — in — —
A
  1. Unexpected high or low rate of employee turnover, early retirement, or mortality
  2. Increases in salary
  3. Changes in benefit payment options
  4. Changes in discount rate
22
Q

How is actuarial loss determined?

A
  • If the actual benefit obligation is higher than the estimated amount, it results in an actuarial loss.
  • This means the projected benefit obligation has increased, and the increase is recognized as an actuarial loss.
23
Q

How is actuarial loss determined?

  • If the — benefit obligation is — than the — amount, it — in an — —.
  • This means the — benefit — has —, and the — is — as an actuarial —.
A
  • If the actual benefit obligation is higher than the estimated amount, it results in an actuarial loss.
  • This means the projected benefit obligation has increased, and the increase is recognized as an actuarial loss.
24
Q

How is actuarial gain determined?

A
  • If the actual benefit obligation is lower than the estimated amount, it results in an actuarial gain.
  • This means the projected benefit obligation has decreased, and the reduction is recognized as an actuarial gain.
25
Q

How is actuarial gain determined?

  • If the — benefit obligation is — than the — amount, it — in an — —.
  • This means the — benefit — has —, and the — is — as an actuarial —.
A
  • If the actual benefit obligation is lower than the estimated amount, it results in an actuarial gain.
  • This means the projected benefit obligation has decreased, and the reduction is recognized as an actuarial gain.
26
Q

How are actuarial gains and losses recognized under PAS 19R?

A
  • Remeasurements, which include actuarial gains and losses, are recognized immediately in other comprehensive income.
  • These remeasurements are not recycled or reclassified to profit or loss.
  • An entity may transfer remeasurements recognized in other comprehensive income within equity or reclassify them to retained earnings.
  • Actuarial gains and losses are permanently excluded from profit or loss.
27
Q

How are actuarial gains and losses recognized under PAS 19R?

  • —, which include — — and —, are recognized — in — — income.
  • These — are not — or — to profit or loss.
  • An entity may — remeasurements recognized in other comprehensive income within — or reclassify them to — earnings.
  • — gains and losses are — — from profit or loss.
A
  • Remeasurements, which include actuarial gains and losses, are recognized immediately in other comprehensive income.
  • These remeasurements are not recycled or reclassified to profit or loss.
  • An entity may transfer remeasurements recognized in other comprehensive income within equity or reclassify them to retained earnings.
  • Actuarial gains and losses are permanently excluded from profit or loss.

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