Pensions

Question 1

Postemployment Benefit Obligation

Answer 1

must be fully accrued by the date that employee attains full eligibility for all of the benefits expected to be received by that employee, even if the employee is expected to render additional service beyond that date.

Question 2

PBO Determination

Answer 2

at the settlement rate

Question 3

Pensions: Accrual Accounting

Answer 3

delaying recognition of certain events; reporting net cost; and off setting liabilities and assets.

Question 4

Service Cost

Answer 4

measured using the projected benefit obligation.

Question 5

Curtailment

Answer 5

If benefits to be accumulated in future periods are reduced, but the plan remains in existence and continues to pay benefits, to invest assets, and to receive contributions,

Question 6

Settlement and Curtailment

Answer 6

If a plan is terminated and not replaced by a successor

Question 7

Compensatory Share Based Payment Plan

Answer 7

An award of equity interests in exchange for employee services the compensation cost is recognized using the fair value method of option pricing and the measurement date is the date of the grant.

Question 8

Service Cost Reporting

Answer 8

in the same line item(s) as other compensation costs arising from services rendered by the employees during the period

Question 9

Accumulated Benefit Obligation

Answer 9

the actuarial present value of benefits attributed by the pension benefit formula to employee services rendered before a specified date and based on employee services and compensation prior to that date.

Question 10

Projected Benefit Obligation

Answer 10

the actuarial present value as of a date of all benefits attributed by the pension benefit formula to employee service rendered prior to that date.

Question 11

Acturarial Gains and Losses

Answer 11

changes in the amount of either the projected benefit obligation or plan assets resulting from experience different from that assumed, and also changes in assumptions. It includes both realized and unrealized gains and losses.

Question 12

Net Pension Cost: Components

Answer 12

(1) service cost, (2) interest cost, (3) actual return on plan assets, if any, (4) amortization of unrecognized prior service cost, if any, (5) gain or loss (including the effects of changes in assumptions) to the extent recognized, and (6) amortization of the unrecognized net obligation (and loss or cost) or unrecognized net asset (and gain) existing at the date of initial application of GAAP.

Question 13

Disclosures

Answer 13

the assumed health care cost trend rate(s) for the next year and a general description of the direction and pattern of change as well as the ultimate trend rate(s) and when the rate is expected to occur. The employer must also disclose the accumulated post-retirement benefit obligation.

Question 14

Net Pension Cost

Answer 14

the contribution called for by the defined contribution plan for the period in which the individual renders services.

Question 15

Interest Cost

Answer 15

the increase in the projected benefit obligation due to the passage of time.

Question 16

Per Capita Claims

Answer 16

the current cost of providing postretirement health care benefits for one year at each age from the youngest age to the oldest age at which plan participants are expected to receive benefits under the plan. unique to postretirement benefits only.

Question 17

Defined Contribution Plan

Answer 17

an employer contributes specific periodic amounts of contributions to the plan during the time the employee is in service such that after retirement, the employee would receive these contributions and along with any returns generated.

Question 18

Defined Contribution Plan: Financial Statements

Answer 18

Statement of Net Assets Available for Benefits of the Plan and Statement of Changes in Net Assets Available for Benefits.

Question 19

Stock Option Fair Value

Answer 19

Fair value on the grant date is used to recognize the expense on a straight-line basis over the period of service required by the employee before the option can be exercised.

Question 20

Net Plan Assets

Answer 20

amounts contributed by the employer (and by employees for a contributory plan) and amounts earned from investing the contributions, less benefits paid.

Question 21

Prior Service Cost Amortization

Answer 21

recognized during the future service periods of those employees active at the date of the amendment who are expected to receive benefits under the plan (i.e., in the current year and following years).

Question 22

Sick Day Liability Accrual

Answer 22

if the entity customarily pays or allows compensated absences for employees with accumulated, nonvesting sick leave days, even though employees are not actually absent as a result of illness