Financial Analysis #19 - Post-Employment and Share-Based Employee Compensation Flashcards
Need to populate this deck
1
Q
PBO components
A
LOS 19.b
x opening PBO
+ service cost
+ interest cost
+/- actuarial (gains)/losses <– only actuarial influence
+/- past service cost
- benefits paid
= closing PBO
2
Q
service cost
A
LOS 19.b
- the change in PBO attributed to employees’ efforts during the year
- the actuarial PV of pension benefits earned in a year
3
Q
interest cost
A
LOS 19.b
- the increase in the PBO resulting from the passage of time
- interest cost = PBO start of period x disc. rate
4
Q
actuarial gains (losses)
A
LOS 19.b
- gains and losses resulting from changes in actuarial assumptions affecting the PBO
- only component with actuarial influence on PBO
5
Q
past service costs
A
LOS 19.b
- retroactive impact on past benefits awarded to employees when a plan is initiated or amended
- e.g. changing the payout from 60% to 65% of final salary
6
Q
benefits paid
A
LOS 19.b
- payments made from the fund to existing retirees
7
Q
A
