Pensions

Question 1

Prior Service Amortization

Answer 1

Beg. unrecognized prior service cost / average remaining service life

Question 2

Accumulated Benefit Obligation

Answer 2

is the PV of future retirement payments to the pension benefit formula to employee services rendered prior to a date, based on current and past compensation.

Question 3

Net periodic pension cost

Answer 3

S current service cost 
I Int. Cost 
R 
A Amortization of prior service cost
G  and losses
E Amortization of existing  net obligation or net assets

Question 4

Interest Cost

Answer 4

Beng PBO x Discount Rate

Question 5

Expected Return on plan assets

Answer 5

Beg FV x Expected Rate of return

Question 6

Amortization of Transition Asset

Answer 6

Unrecognized net transition asset/ average remaining lide

Question 7

Net gain to be reported in OCI

Answer 7

Actual return on plan assets
 Beg. FV plan assets
Contributions
-Benefits paid
\+Actual return on plan assets

Question 8

Net Loss amortization that will include in Net periodic Cost & it will reduce CY pension expense

Answer 8

Unrecognized net loss
Less: 10 % of greater beg PBO/Plan assets
=Excess
Excess / average remaining service life

Question 9

Pension Plan Assets

Answer 9

always non current

Over funded FV of plan assets > PBO

Question 10

Pension Plan Liability

Answer 10

Current, non current
Under funded FV of plan assets < PBO
CL - to the extend that Beefit Obligation payable within 12 months exceed the FV of plan assets

Question 11

Funded Status

Answer 11

FV of plan assets - PBO

Question 12

AOCI

Answer 12

Unrecognized prior service cost (unrecognized prior service cost - amortization of prior service cost (PSC / service life))
Unrecognized transition obligation
Unrecognized net gain
= Total x 1- Tax Rate

Question 13

Service Cost JE

Answer 13

Net periodic cost
Pension Bnefit cost

Deferred Tax asset
Deferre tax benefit - IS

Question 14

Amortization of net gain affect CY B/S

Answer 14

GAAP requires that net gain/loss be reported as a component of AOCI until recognized in the net periodic cost through amortization. CY amortizations of net gain reclass adj from AOCI.

OCI
Net periodic cost
Deferred tax expense - IS
Deferred Tax expense - OCI

Question 15

PBO Calc

Answer 15

Beg. PBO
\+Service Cost
\+Interest Cost
\+Prior Service Cost from current period plan ammend
\+Actuarial loss
-Actuarial gain
-Benefits paid
=Ending PBO

Question 16

Actual Return on Plan Assets

Answer 16

Beg balance
\+Contributions
-Benefits paid
=Total
-End Balance FV
=Actual return