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Unformatted text preview: ac c ount ing f or a pension plan, c onsiderat ion must be given t o whet her we are ac c ount ing
f or t he pension plan f rom an employer’s perspec t ive or ac c ount ing f or t he pension plan it self . In
t his c ourse, we are c onc erned about t he employer’s point of view. Ac c ount ing f or pension plans
f rom t he pension plan’s perspec t ive is a very spec ialized area t hat is beyond t he sc ope of t his
Ac c ount ing f or Pensions f rom a Company Perspec t ive
https://blackboar d.tr u.ca/webct/ur w/lc5122001.tp0/cobaltM ainFr ame.dowebct 2/7 10/14/13 Blackboar d Lear ning System T he c ompany sponsors t he pension plan. T he c ompany inc urs c ost s and makes regular
c ont ribut ions t o t he f und. Ac c ount ing f or t he c ompany involves:
Alloc at ing pension c ost t o t he proper ac c ount ing period
Measuring result ing pension obligat ions
Disc losing t he st at us of t he plan in t he f inanc ial st at ement s
Ac c ount ing f or Pensions f rom t he Pension Plan Perspec t ive
A t rust ee rec eives t he c ont ribut ions f rom t he c ompany, invest s t he monies in various asset s on
behalf of t he employees and ret irees, and pays benef it s t o ret ired employees. Ac c ount ing f or
t he pension plan inc ludes rec ording rec eipt s f rom employer c ont ribut ions, inc ome f rom
invest ment s of t he plan, amount s paid t o pensioners, and ot her inf ormat ion. T he pension plan
prepares it s own set of f inanc ial st at ement s in ac c ordanc e wit h GAAP.
Ac t ivit y 6- 1: Pensions and Ot her Employee F ut ure Benef it s
T his ac t ivit y provides t he opport unit y t o bec ome f amiliar wit h t he princ iples and t erminology of
pensions and employee f ut ure benef it s.
P art A : Reading 1. Read Chapt er 19, “Pensions and Ot her Employee F ut ure Benef it s” and Appendix 19A—
Example of a One- Person Plan in your t ext book, pages 1228–1276.
As you read, c onsider t he f ollowing:
What is t he dif f erenc e bet ween a def ined benef it plan and a def ined c ont ribut...
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- Spring '13