Tr ucawebctur wlc5122001tp0cobaltm ainfr amedowebct

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Unformatted text preview: w/lc5122001.tp0/cobaltM ainFr ame.dowebct 1/7 10/14/13 Blackboar d Lear ning System Read T opic 2: Ac c ount ing f or Pensions Complet e Ac t ivit y 6- 2: Calc ulat ing Pension Expense Part A: Prac t ic e Exerc ises Read T opic 3: IF RS and GAAP Comparison Complet e Assignment 6 Submit Assignment 6 f or grading F ile: Outcomes Mo dule 6: Pe ns io ns a nd Othe r ... Outcomes By t he t ime you f inish your work on t his module, you should be able t o: Def ine t erms used in ac c ount ing f or pensions. Calc ulat e pension expense. Use a worksheet t o det ermine pension expense and t he balanc e of pension- relat ed ac c ount s. Prepare journal ent ries t o rec ord pension expense. Prepare t he required f inanc ial st at ement disc losure of pension c ost s. F ile: Topic 1: Ov erv iew of Accounting for Pensions Mo dule 6: Pe ns io ns a nd Othe r ... T opic 1: Overview of Accounting for Pensions Many c ompanies promise t heir employees c ert ain benef it s af t er t hey ret ire; t he most c ommon post - ret irement benef it is a pension. Companies provide t hese benef it s as part ial c ompensat ion f or employees’ pre- ret irement servic es. Post - ret irement benef it s are a f orm of def erred c ompensat ion. As suc h, t he mat c hing princ iple requires t hat t he c ost of t hese benef it s must be rec ognized in t he periods during whic h t hey are earned. Ac c ount ing f or pensions is very problemat ic f rom a measurement perspec t ive. T he problem arises f rom t he f ac t t hat pension benef it s are of t en payable so f ar in t he f ut ure t hat it is dif f ic ult t o measure t he c urrent c ost of t he amount t o be event ually paid out . Indeed, t he employee may not even st ay wit h t he employer long enough t o rec eive t he benef it s. Due t o t he measurement c omplexit y, t he pension plan hires an ac t uary t o predic t mort alit y rat es, employee t urnover, int erest and earnings rat es, f ut ure salaries, and ot her relat ed f ac t ors. When...
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