Present Value Pensions Flashcards
Info
Started on 16 August 2014 @ 7.00 PM
Total questions 37
To do at a time 37
Practice session 76 or so
What is vested benefit?
Vested benefits in a pension plan are benefits that are not contingent on an employee’s continued service. The benefits are earned regardless of continued employment.
An employer’s obligation for post retirement health benefits that are expected to be fully provided to or for an employee must be fully accrued by the date the
The requirement is to identify when benefits must be fully accrued. ASC Topic 715 requires that the employer’s obligation for post retirement health benefits that are expected to be fully provided to or for an employee must be fully accrued by the date that the employee is fully eligible for benefits.
Under IFRS, how is the discount rate for pensions determined?
It is determined by the market yield at the end of the reporting period for high-quality corporate bonds having a similar term or maturity.
because the discount rate to be used for pension accounting is determined by the market yield at the end of the reporting period for high-quality corporate bonds having a similar term or maturity.
ASC Topic 715 requires disclosure of certain weighted-average rates that were used for determining amounts disclosed for defined benefit pension plans. Which of the following weighted-average rates should be disclosed for defined benefit pension plans?
Weighted-average rates disclosed for defined benefit pension plans include (1) the discount rate used to determine the benefit obligation, (2) the expected rate of return on plan assets, and (3) the expected rate of compensation increase.
Each of the following is a component of the changes in the net assets available for benefits of a defined benefit pension plan trust, except
The statement of financial position.
This answer is correct because the funding status of a pension plan must be reported in the balance sheet (statement of financial position).
The following information pertains to Kane Co.’s defined benefit pension plan:
Pension asset (liability), January 1, year 5 $ 2,000
Service cost 19,000
Interest cost 38,000
Actual return on plan assets 22,000
Amortization of unrecognized prior service cost 52,000
Employer contributions 40,000
The fair value of plan assets exceeds the projected benefit obligation. In its December 31, year 5 income statement, what amount should Kane report as pension cost?
Pension asset (liability), January 1, year 5 $ 2,000
Employer contributions 40,000
not considered
Why?
Hickman Inc. uses IFRS for financial reporting purposes and has several pension plans covering various classes of employees. When may the company net assets and liabilities of the various plans?
Assets and liabilities may be netted when there is a legally enforceable right to use the assets of one plan to settle the obligations of another plan.
How to calculate accrued post retirement benefit.
Need to understand.
Which of the following methods is used in IFRS to account for defined benefit pension plans?
Need to understand.
what is pension asset
Need to know.
In which of the following pension instances would the pension asset/liability adjustment (net of tax), be reported on the balance sheet for a particular year?
Only when the projected benefit obligation exceeds plan assets.
This answer is correct because ASC Topic 715 requires a pension liability to be recognized if the fair value of plan assets is less than the projected benefit obligation.
Qu 6 When PBO is greater than asset it means it is
A Liability
Qu 8 A pension liability must be recorded equal to the unfunded
Projected benefit obligation less the fair value of plan assets.
Qu 11 Estimated return on plan asset is calculated or actual
Actual return is included.
