/hich is correct concerning the effect of asset ceiling in a defined enefit plan? O It is the excess of accrued pension cost over the asset ceiling O It is the excess of asset ceiling over the accrued pension cost O It is the excess of prepaid pension cost over the asset ceiling O It is the excess of asset ceiling over the prepaid pension cost

/hich is correct concerning the effect of asset ceiling in a defined enefit plan? O It is the excess of accrued pension cost over the asset ceiling O It is the excess of asset ceiling over the accrued pension cost O It is the excess of prepaid pension cost over the asset ceiling O It is the excess of asset ceiling over the prepaid pension cost

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter19: Accounting For Post Retirement Benefits

Section: Chapter Questions

Problem 6GI

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Net interest cost is a component of pension expense under IFRS. How is net interest cost calculated? Select one: O a. The increase in the DBO over the period, net of the increase in the plan assets over the period. O b. Interest expense on the DBO, net of actual interest income earned on plan assets. O c. Interest expense on the defined benefit obligation (DBO), net of expected interest income earned on plan assets. O d. The increase in the DBO over the period, net of the increase in the plan assets over the period.
look over the three most important components of the pension expense. The treatment of expected and actual return on plan assets, particularly when the actual return is greater than the expected, the amortization of prior service cost and the unexpected gain/ loss. Discuss the accounting treatment of these items with suitable examples.
What are the four basic components of pension expense? Select one: A. Service cost, benefits paid, expected return on plan assets, and amortization of deferred amounts B. Service cost, benefits paid, actual return on plan assets, and amortization of deferred amounts C. Service cost, interest cost, actual return on plan assets, and amortization of deferred amounts D. Service cost,interest cost, expected return on plan assets, and amortization of deferred amounts E. None of the above
what is the difference between Accumulated Benefit Obligation and Projected Benefit Obligation? How do you determine the Plan Asset/Liability? How do you compute the Pension Expense?
An increase in OCI related to plan assets occurs when: Select one: a. The accumulated benefit obligation is more than expected. b. The vested benefit obligation is less than expected. c. Retiree benefits paid out are less than expected. d. The return on plan assets is higher than expected. e. The employer contributes an amount greater than it was liable to do.
Under PAS 26 (Accounting and Reporting by Retirement Benefit Plans), investments held by retirement benefit plans should be stated at which of the following value in their statement of net assets? Fair Value Value in use Net Realizable Value Orig cost less impairment
The net pension liability (PBO minus plan assets) is increased by: A. Service cost. B. Expected return on plan assets. C. Amortization of prior service cost. D. Cash contributions to plan assets.
1. All of the following are components of the defined benefit cost except * unvested past service cost interest on the effect of the asset ceiling loss on settlement return on plan assets 2. Which of the following are recognized in other comprehensive income? service cost net interest in net defined benefit liability (asset) amortization of actuarial gains or losses difference between interest income on plan assets and return on plan assets 3. The balance of the present value of defined benefit obligation is affected by all of the following except * actuarial gains or losses interest cost current service cost contributions to the fund 4. If the present value of the defined benefit obligation exceeds the fair value of the plan assets, there is * deficit surplus expense prepaid accrued benefit cost
Which of the following statements regarding asset ceilings for overfunded and underfunded pension plans is true? A. For underfunded pension plans, the issue is whether the sponsoring entity can realize the benefits of the underfunding either through reducing or stopping its contributions in the future or through withdrawing surplus funds. B. An overfunded pension results in a net defined benefit liability on the SFP. C. An underfunded pension has a fair value of plan assets that is less than the DBO. D. An asset ceiling is the minimum benefit that the employer can realize by reducing or stopping future contributions to a defined benefit pension plan.
For a defined benefit pension plan, pension expense consists of five components, for which the formula is Service Cost – Interest Cost + Expected Return on Plan Assets – Amortization of Prior Service Cost +(–) Gain (Loss). Service Cost + Interest Cost – Expected Return on Plan Assets + Amortization of Prior Service Cost +(–) Gain (Loss). Service Cost + Interest Cost + Expected Return on Plan Assets – Amortization of Prior Service Cost +(–) Gain (Loss). Service Cost – Interest Cost + Expected Return on Plan Assets + Amortization of Prior Service Cost +(–) Gain (Loss).
D. The choices are overestimate the pension assets return overestimated the pension liability underestimate the pension assets return underestimated the pension liability
When a defined benefit pension fund has assets whose value is below the present value of its expected future obligations, the plan is Answers: a. Overfunded b. Underfunded c. Fully funded d. Defined contribution