Financial Statements of employee benefit plans Flashcards
Statement of net assets available for benefits of the plan shall present
Total assets
Total liabilities
Net assets reflecting all investments at fair value
Net assets available for benefits.
Annual financial statements of a plan shall include the following: Statements that includes
information regarding the
1) net assets AND
2) changes during the year in net assets available for benefits as of the end of the plan year.
Annual financial statements of a plan shall also include information regarding
actuarial present value of accumulated plan benefits as of either the beginning or the end of the plan year.
Information regarding the SIGNIFICANT effects, of certain factors affecting the year-to-year CHANGE in the actuarial present value of accumulated plan benefits.
The employer must treat the employee benefit plan
as a separate entity for reporting.
The employer prepares a complete set of financial statements for the plan itself
actuarial present value of accumulated plan benefits
is the amount from applying actuarial assumptions to the accumulated plan benefits
what adjustments are made to actuarial present value of accumulated plan benefits
to reflect the time value of money
and the probability of payment between the benefit information date and the expected date of payment.
Information about a defined contribution plan
is not applicable due to amount limited to balance in the account
primary objective of a defined benefit plan’s financial statements is
to provide information that is useful in assessing the plans’ present and future ability to pay benefits.
A fully benefit-responsive investment contract is a
contract between a plan and an issuer (such as an insurance company).
contract issuer guarantees repayment of principal and that future interest rates will never be less than zero
How should a fully benefit-responsive contract be reported on the financial statements of an employer sponsored defined contribution plan?
Contract Value
financial statement of a defined benefit plan must contain information on
the actuarial present value of accumulated plan benefits
If an active market is used for a defined benefit pension plan
Closing price should be used
Measure at Fair Value
