Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

FAR CPA Custom > Pensions > Flashcards

Pensions Flashcards

1
Q

Pension Liability = ?

A

PBO - FV of plan assets

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

The funded status of a defined benefit pension plan appears in which statement?

A

The balance sheet

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

Plan investments should be reported in a defined benefit plan’s financial statements at actuarial present value. TF

A

False. At fair value.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

Pension Asset = ?

A

FV of plan assets - PBO

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

The PBO is increased by funding contributions and decreased by pension expenses. TF

A

True, these actions affect the PBO account

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

What does a pension liability represent?

A

An unfunded projected benefit obligation

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

What are the 5 components of pension expense?

A
  1. Service Cost
  2. Interest Cost
  3. Expected return on plan assets
  4. Amortization of prior service cost
  5. Effect of gain or loss
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

REDO How is pension service cost calculated?

A

(PV of the annuity for x amount of years (The retirement)) x PV of

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

What is pension interest cost and how is it calculated?

A

The growth in PBO for the period. Beg PBO x Current Mkt Interest Rate

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

What is “expected return on plant assets” and how is it calculated?

A

The expected growth in the pension fund for the year. Beg FV of plan assets x Expected Rate of Return on plan assets

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

What is the formula for pension expense?

A

Service Cost + Interest Cost - Expected Return + Am. of a A. Loss + A of Unrec NO = Pension Expense

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

What would be the JE for an increase in service cost for a service provided in the past?

A

dr. Prior Service Cost - OCI

cr. Pension Liability

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

What two amortization methods are allowed by GAAP for PSC into pension expense?

A

Straight Line and Service Method

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

An estimated increase in employee turnover would cause PBO to decrease. TF

A

True. Because estimated pension benefits are reduced.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

An increase in the FV of plan assets would cause an increase in the pension liability. TF

A

True. Because you are subtracting even more from the PBO. PBO - FV of plan assets = PL

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

When an actuarial gain is recognized, pension liability is credited. TF

A

False. dr. Pension Liability cr. Pension Gain - OCI

17
Q

PBOs are subject to delayed recognition. TF

A

False. Changes in PBOs are recognized immediately.

18
Q

A journal entry to recognize an amortization gain causes what effect on pension liability?

A

No effect on pension liability

19
Q

A journal entry to recognize an amortization gain causes what effect on pension expense?

A

Decreases pension liability

20
Q

Amortization of PSC is subtracted from pension expense when trying to determine pension liability?

A

True

21
Q

The estimates of future contributions are a required disclosure of defined pension benefit plans. TF

A

False

22
Q

PBO stands for

A

Pension Benefit Obligation

23
Q

PBO = ? for IFRS?

A

DBO (Defined Benefit Obligation)

24
Q

What is the formula for DBL?

A

DBO - FV of plan assets = Funded Status, FS +/- Unrecognized Net Pension GL - Unrecognized PSC = DBL

25
Q

Under IFRS the vested portion of PSC, at PV, is recognized immediately in pension expense. TF

A

True

26
Q

Under IFRS the un-vested portion of PSC, at PV, is recognized immediately in pension expense. TF

A

False, it is gradually amortized to pension expense over the appropriate period.

27
Q

Under IFRS, firms have the option to recognize PSC in OCI or earnings. TF

A

False. Vested portion is recognized immediately as OCI and the unvested portion is amortized.

28
Q

Post-employment Benefit Obligation acctg is what type of acctg?

A

Accrual

29
Q

The primary measure of post retirement benefit obligation is…

A

Accumulated Postretirement Benefit Obligation (APBO)

30
Q

What is EPBO?

A

Expected Post-retirement Benefit Obligation. The PV of benefits expected to be paid based on the level of coverage the employees are expected to retain.

31
Q

Per capita claims costs are unique to post post retirement healthcare benefits. TF

A

True

32
Q

Components of changes in net assets available for benefits of a defined benefit pension plan trust, include: the net change in the ___ of each significant class of investments, contributions, and benefits paid. TF

A

FV

33
Q

Employer contributions are a part of pension expense. TF

A

False

34
Q

Amortization of unrecognized PSC is added to the pension expense formula. TF

A

True, it is part of the expense

35
Q

Things that are traditional expenses are ____ when computing pension expense, and items that are traditional revenues or gains are ____ to pension expense.

A

Added, subtracted

36
Q

What is the general formula for pension expense?

A 
Service Cost
\+ Interest Cost
\+ Actual return on plan assets
\+ Amortization of unrecognized PSC
= Pension Expense
37
Q

IFRS requires the use of what method to calculate the PV of the defined PBO?

A

projected unit credit method

FAR CPA Custom (46 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions