Pensions Flashcards
1
Q
How do you get pension expense
A
(A-SPIDER) Amortization of existing net obligation/net asset Service cost Prior service cost amortization Interest cost Deferred gain Excess amortization of deferred gain actual Return on plan assets
2
Q
A-SPIDER, S
A
+Service cost= increase in PBO in 1 year
3
Q
A-SPIDER, I
A
+Interest cost= beginning PBO*discount rate
4
Q
A-SPIDER, P
A
+Prior service cost amortization= beginning PSC/average service life
5
Q
A-SPIDER, R
A
-actual Return on plan assets= end plan assets-beg plan assets-contributions+benefits paid OR beg FV of plan assets*actual return
6
Q
A-SPIDER, D
A
+Deferred gain= return on PA-beg PA* expected rate of return
7
Q
A-SPIDER, E
A
-Excess amortization of deferred gain= [deferred gain at beg year - (10% of plan assets>
8
Q
A-SPIDER, A
A
+Amortization of existing net obligation/asset= (IF PBO>FV, net obligation, increase. IF FV>PBO, net asset, decrease)/ 15>
