An employer s reporting for a defined benefit pension is a joint effort between two professions: actuarial
Fantastic news! We've Found the answer you've been seeking!
Question:
An employers reporting for a defined benefit pension is a joint effort between two professions:
actuarial science and accountancy. An employer provides demographic and salary information
about the current work force to an actuary who then computes a pension obligation and service
cost in accordance with the provisions of the plan. While the actuary is responsible for the
calculations, it is the accountants responsibility to ensure that the assumptions, methods, and
disclosures comply with generally accepted accounting principles.
Let us get started. Round your answers to nearest thousands
Year
On December Arrieta Incorporated purchases a subsidiary of Sales Unlimited. Sales
has a defined benefit pension plan. The actuary provides you the following information:
numbers
in s
Statement of financial position
Benefit obligation
Fair value of plan assets
Funded status
Expected impact of plan
alignment
The initial amount in s to be recognized on the books of Arrieta for initial recognition of the
funded status of the Sales pension plan is:
Benefit obligation
Fair value of plan assets
Funded status
Page of
Year
On July Arrieta amends the plan to align the benefits with its own plans, retroactive to
the date of employment for the acquired employees. The retroactive benefits result in a prior
service cost. The remaining service lives of those employees average time to retirement is
years.
The actuary presents you with the following information in s as of
Service cost
Interest cost
Expected return on plan assets
Actuarial gain loss
Plan amendment
Actual return on plan assets
Benefits paid
Employer contributions
Discount rate
Expected return
Salary increases
Required:
a Present the change in plan obligation and the change in plan assets for year and determine
the ending funded status.
b Provide ASC references to support the accounting for the prior service cost.
c Find Pension Expense for year determine whether we need to amortize prior service cost,
and determine the amount of any amortization of gains and losses
Expert Answer:
a Change in Plan Obligation Service Cost 100000 Interest Cost 94000 Actuarial Loss 22000 Plan Amend... View the full answer
Posted Date:
