Midterm Study Guide Extras

Midterm Study Guide Extras - Depreciation of NPV years goes...

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Study Guide: Leases and Pensions Leases: o Operating lease: Rent expense included on I/S o Capital lease: Long term asset and liability on B/S Increased depreciation expense and interest expense on I/S Analyst wants to make all operating leases capital leases Fill out that big table o Important stuff: Payment does not go to I/S PV goes to B/S Interest goes to I/S
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Unformatted text preview: Depreciation of NPV/ # years goes to B/S and I/S • Pensions: o Defined benefit: Employer bears risk o Defined contribution: Employee bears risk o Funded status: Overfunded if value of plan assets (fair/ market value) > PBO • Record under Assets Underfunded if value of plan assets < PBO • Record under Liabilities...
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