This website uses cookies to ensure you have the best experience. Learn more

Restructure Essay

1767 words - 8 pages

Intermediate Accounting II
Chapter 20
Accounting for Pensions
Overview of Employer's Accounting for Pension Plans

Defined contribution plan - employer agrees to make a defined contribution to a pension plan

plan participants receive whatever benefits have accumulated

each year, employer records an expense an a related liability for the contribution

Defined benefit plan - employer agrees to provide a benefit at retirement that is defines or fixed by formula

employer accepts risk of meeting the obligation upon employee's retirement

requires use of complex actuarial estimates

Involves 2 accounting entities

employer sponsor - reports ...view middle of the document...

Gain or loss - change in the value of either the PBO or the plan assets resulting from experience different from that assumed or from a change in actuarial assumption. See also "unrecognized net gain or loss".

Plan amendment - change in the terms of an existing plan or the initiation of a new plan.

Prior service cost (PSC) - cost of retroactive benefits granted in a plan amendment. See also "unrecognized prior service cost".

Projected benefit obligation (PBO) - actuarial present value as of a date of all benefits attributed by the pension benefit formula to employee service rendered prior to that date. The PBO is measured using assumptions as to future compensation levels if the pension benefit formula is based on those future compensation levels (pay-related, final-pay, etc. plans)

Retroactive benefits - benefits granted in a plan amendment that are attributed by the pension benefit formula to employee services rendered in periods prior to the amendment. The cost of retroactive benefits is referred to as prior service cost.

Service - employment taken into consideration under a pension plan. Years of employment before the inception of a plan constitute an employee's past service; years thereafter are classified in relation to the particular actuarial valuation being made. Years of employment prior to the date of a particular valuation constitute prior service.

Unrecognized net gain or loss - cumulative net gain(loss) that has not been recognized as a part of net periodic pension expense.

Unrecognized prior service cost - portion of prior service cost that has not been recognized as a part of the net pension expense

Calculating Pension Expense

Pension Expense is a net amount calculated by combining the following 5 items

service cost

interest on the projected benefit obligation

actual return on plan assets

amortization of unrecognized prior service cost

effects of gains and losses

Pension expense is included in the income statement, the components are disclosed

Service Cost

increases pension expense

df - actuarial present value of benefits attributed to employee service during the current year

takes future salary levels into consideration (uses the benefits/years of service approach)

in the worksheet, the amount of service cost is accounted for by debiting Pension expense (income statement account) and crediting PBO (off-balance sheet account -memo)

Interest on Projected Benefit Obligation (PBO)

increases pension expense

df - increase in the amount of the PBO due to the passage of time.

interest rate is called the settlement rate (reflects the rates at which pension benefits are expected to be settled)

Interest for the year is calculated on the PBO at the beginning of the year (ie use simple interest)

in the worksheet, interest is accounted for by debiting Pension expense...

Other Papers Like Restructure

Cisco Case Study

623 words - 3 pages they managed the restructure of their marketing channels. They have not only reorganized in such a way that has allowed them to take control of a majority of small-to-medium sized businesses, but have also made it so that their more limited amount of resellers and channel members can be more profitable as well. Additionally, their value-focus brings customers and consumers the highest quality of products and solutions. Although the telecom and dot

Appendix C Psy 201 Essay

304 words - 2 pages |unpleasant stimulus with undesired behavior (Feldman, |way people think (Feldman, 2010). | | |(Feldman, 2010). |2010). |Rational-Emotive Behavior Therapy: attempts to restructure| | |Free association: Psychoanalysts using this technique |Systematic Desensitization: gradual exposure to an |a

Erp Implementation At Bombardier

263 words - 2 pages Mirabel plant near Montréal. • Procurement function restructure: improvement of inventory visibility and anticipated substantial savings in product costs($ 22 million) and procurement overhead($7.1 million) • First Rollout challenges: lack of documentation, system functionality, substandard training material, tight training schedules and lack of role clarity during training. • Go Live: Power users and super users supported the move

Management Frameworks - Four Frame Analysis

2646 words - 11 pages function. Within the functional divisions, labor is further divided according to location and or product transported, creating a matrix structure (Burns&Wholey, 1993). Prior to the restructure individual divisions were the owners of their own rollingstock. The new matrix structure implies that divisions have shared authority with dual reporting lines. In the example of S&BD’s NGR initiatives, structural authority of strategic direction is

Case Study 1: Prioritizing Projects at D.D. Williamson

1214 words - 5 pages , and threats involved in a project. Failed Scenario at D.D. Williamson A fictitious scenario at D.D. Williamson would be a scenario where the organization is going through an organizational restructure, and employees who remain are poorly trained in project management. In order to successfully move the projects forward there needs to be an understanding of the project life cycle. According to Kloppenborg, Nkomo, Fottler, and McAffee (2012

Hp and Tyson Foods

943 words - 4 pages worked on the terms of the settlement agreement in creating an effective corporate governance structure to approve related-party transactions. With much emphasis on the company’s internal controls including corporate governance, the board planned to ensure the organization will support it stockholders and investors. To remain successful in its industry, Tyson must restructure its position including company commitment to strengthen and support

Ford Mission Statement Analysis

711 words - 3 pages their company and expects their firm to continue to be very profitable for years to come. Even with the positive image conveyed by Fords’ mission statement there is a slightly negative tone about Fords’ ability to deal with future uncertainties within the automotive industry hidden within their statement. Fords states that as part of their One Plan they will “aggressively restructure to operate profitably.” The second half of this statement


669 words - 3 pages down,” Salman said in the letter. He blamed the situation on two factors -- politically motivated credit restrictions on the group between 2001 and 2008 and repayment of Tk 800 crore in bank loans in the last three years. The group is beset by huge loans worth Tk 5,245 crore to seven banks and requires urgent restructure of its debt to survive, the letter said. Beximco Ltd owes Tk 4,315 crore to four state-owned banks -- Sonali, Janata

Airbus Case Study Erau

911 words - 4 pages European countries. The argument was they had an unfair advantage based on government backing of their debt and a loose requirement they even pay back their debt. Airbus’ response was to restructure the agreement among countries and restructure the organization to reduce the validity of Boeing’s complaint. Boeing also reacted to Airbus product lines by introducing new planes of its own. Unfortunately, several of Boeing’s announcements never

Decision in Paradise Part I

864 words - 4 pages is to aid Kava in developing and managing an effective, efficient and well organized process structure. The restructure of the small South Pacific Island will include every part of life such as education, leadership, marketing, finance, purchasing, technology, human resources, physical resources, transportation, goods and services, and strategic planning. Kava has a rich economy of petroleum, coffee, cocoa spices, bananas, sugar, tourism

Us Automotive Bailout of 2008

1033 words - 5 pages address, he remarked “We got the industry to retool and restructure.  Today, General Motors is back on top as the world’s number-one automaker. Chrysler has grown faster in the U.S. than any major car company.  Ford is investing billions in U.S. plants and factories.  And together, the entire industry added nearly 160,000 jobs” (Obama). With the help of the government's bailout, American auto makers were able to restructure themselves, and produce

Related Essays

Legal And Ethical Isues Essay

694 words - 3 pages proposes a reorganization plan to pay creditors back over time (Liuzzo, p343). Atari US expects this filing will give them the boost they need to continue its focus on digital game development and licensing. At the time of the filing, Atari US had $1 to $10 million in estimated assets, and debt between $10 and $50 million (McCoy, 2013). To aid in their restructure, Atari US was approved for $5milliom in debtor-in-possession financing from Tenor

Kimbery Clark Essay

552 words - 3 pages CASE OVERVIEW The company that many of us grew up with that offered disposable diapers and training pants found itself in an ever changing and competitive market. With European markets opening up to more organizations, Kimberly-Clark needed a new strategy to overhaul its business and remain competitive. Some of the factors that brought on the need for restructure as seen in Hitt (2013), was a difficult merger between Kimberly-Clark and Scott

Jkl Communication Plan Essay

1921 words - 8 pages large trucks from an overseas supplier which will benefit JKL in range over its competitors. The past five years, sale of forklift and truck have averaged 10% increase but the rental market has been in decline. JKL then come up with an idea to restructure company itself by solely focusing on retails sale and exit from rental market. JKL plan to hire the staff from rental department who wish to remain with the company. The organization intends

Critical Thinking Essay

610 words - 3 pages academic fields because it enables one to analyze, evaluate, explain, and restructure their thinking, thereby decreasing the risk of adopting, acting on, or thinking with, a false belief. Critical thinking is considered important in the academic fields because it enables one to analyze, evaluate, explain, and restructure their thinking, thereby decreasing the risk of adopting, acting on, or thinking with, a false belief. Critical thinking also is