CHAPTER $19$: PENSIONS AND OTHER POST$-$RETIREMENT BENEFITS $(5$ POINTS$)$

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Required: Refer to IBM Annual Report for December $31,2022$ included in the financial information section of Canvas.

$1.$ According to IBM$$s December $31,2022$ financial statements, it has a defined benefit pension plan. How does IBM

measure the funded status of the plan and the benefit obligation? $[$You will need to read footnote A Summary of

Significant Accounting polices: Defined Benefit Pension and Nonpension Postretirement Benefit Plans.$]$ This question

only relates to the defined benefit pension plan. $[(1)/(2)$ point$]$

$2.$ Identify each component that comprises IBM$$s net periodic pension and nonpension postretirement benefit cost$/$income

for the year ended December $31,2022$ and in what financial statement are they recorded? $[$ Again, you will need to read

footnote A Summary of Significant Accounting polices: Defined Benefit Pension and Nonpension Postretirement Benefit

Plans$].[(1)/(2)$ point$]$

$3.$ According to IBM$$s December $31,2022$ financial statements it no longer accrues benefits $[$service costs$]$ for members of

the U$.$S$.$ defined benefit plan. When did this happen and, based on our pension lecture, why did this happen? $[$You will

need to read NOTE V$.$ RETIREMENT$-$RELATED BENEFITS of the financial statements to correctly answer.$][(1)/(2)$ point$]$

$4.$ For the year ended December $31,2022,$ what was IBM$$s total U$.$S$.$ and non$-$U$.$S$.$ retirement$-$related benefits net periodic

cost that was included in its consolidated income statement? $[$ Again, you will need to read NOTE V$.$ RETIREMENT$-$

RELATED BENEFITS: Plan Financial Information of the financial statements to correctly answer.$][(1)/(2)$ point$]$

$5.$ At December $31,2022$ what was the $ amount of IBM$$s overfunded and underfunded funded status? $[$ Again, you will

need to read NOTE V$.$ RETIREMENT$-$RELATED BENEFITS: Plan Financial Information of the financial statements to

correctly answer. This question is asking for the net amounts for overfunded and underfunded, which means the fair value

of the plan assets minus the benefit obligation for each.$][(1)/(2)$ point$]$

$6.$ Based on our lecture discussion, what does it mean when a plan is $(1)$ overfunded and $(2)$ underfunded, such as you

identified in your answer to question $5?[1$ point$]$

$7.$ According to IBM$$s note V Plan Financial Information Funded Status $*,$ items included on IBM$$s December $31,2022$

balance sheet related to pension and retirement benefits include $(1)$ prepaid pension assets; $(2)$ compensation and

benefits $($current liability$)$ and $(3)$ retirement and nonpension postretirement benefit obligations $($noncurrent liability$).$ What

is the total Assets amount and total Liabilities amount related to each of these items on IBM$$s December $31,2022$

balance sheet? $[(1)/(2)$ point$]$

$8.$ Is the amount of prepaid assets in your answer to question $7$ the same amount as the funded status for overfunded plans

in your answer to question $5[$footnote V$?$ Why? $[(1)/(2)$ point$]$

$9.$ Is the amount of total liabilities in your answer to question $7$ the same amount as the funded status for underfunded plans

in your answer to question $5[$footnote V$]?$ Why? $[(1)/(2)$ point$]$