Buscar
Estás en modo de exploración. debe iniciar sesión para usar MEMORY

   Inicia sesión para empezar

level: Compensation and Benefits

Questions and Answers List

level questions: Compensation and Benefits

QuestionAnswer
What is a Projected Benefit Obligation (PBO)?Actuarial PV of all benefits
What is an Accumulated Benefits Obligation (ABO)?Current or Past Salary Levels
What is the IFRS equivalent of PBO?DBO
Equation to solve for Pension Fund StatusFV of Plan Assets - PBO (or DBO if IFRS)= Status
What does a positive Pension Fund Status signify?Overfunded (Non-Current Asset)
What does a negative Pension Fund Status signify?Underfunded (Current OR Non-Current Liability)
Net Periodic Pension Cost EquationService cost (Current) + Interest cost (PBO) - Return on plan assets (expended or actual) + prior service cost Amortization +/- (Gain) or loss on amortization +/- Existing (asset) or obligatory amortization
Journal Entry for Pension Reclassification Adjustment (Gain)DR: OCI CR: Net Periodic Pension Cost DR: Deferred Tax Expense- IS CR: Deferred Tax Expense- OCI
Journal Entry for Pension Reclassification Adjustment (Loss)DR: Net Periodic Pension Cost CR: OCI DR: Deferred Tax Benefit - OCI CR: Deferred Tax Benefit- IS
Journal Entry of Pension Comp ExpenseDR: Pension Comp Expense (Current) DR: Net Periodic Pension Cost CR: Pension Benefit Liability CR: OCI
Expected Postretirement Benefit Obligation (EPBO) EquationEPBO= ABO+ Any nonvested benefits
What is the "attribution" period and how is it treated?Lasts from day hired to date when the plan is fully vested, you must expense it.
Stock Option Compensation Expense EquationFV (at grant date) / Service Period = Comp Expense per Year
Journal Entry for Stock Options ExcersizedDR: Cash DR: APIC - Stock Options (Reverses accum amounts over prior years = FV) CR: CS (FV reversed in APIC- SO) CR: APIC - CS
How is Interest Cost (I) calculated for Net Periodic Pension Cost?I = Beginning PBO x Discount Rate
How is EXPECTED Return on Plan Assets (R) calculated for Net Periodic Pension Cost?R = Beginning FV of Plan Assets x Expected Return Rate
How is Amortization of Prior Service Cost (A) calculated for Net Periodic Pension Cost?A= Unrecog Prior Service Cost / Avg Remaining Service Life
How is Amortization of Unrecognized Gain or Loss (G) calculated for Net Periodic Pension Cost?G = (Beginning Unrecognized G or L - *10% of Beg PBO OR Market Related Value*)/Avg Remaining Service Life *Whichever is greater- pensions are GREAT!!
How is Amortization of Existing Net Obligation or Asset (E) calculated for Net Periodic Pension Cost?E = (Beginning Projected Benefit Obligation - FV or Plan Assets)/ *15 years OR avg employee job life* *Whichever is greater- pensions are GREAT!!
Which parts of SIR AGE adhere to "Pensions are GREAT"?G- 10% of PBO OR Market Related Value E- 15 yrs OR Avg Employee Job Life WHICHEVER IS GREATER!!
How is ACTUAL Return on Plan Assets (R) calculated for Net Periodic Pension Cost?Beg Bal + Contributions + Actual Return - Benefits Paid = Ending Balance