Student Notes, Pensions(17)

Classified as a noncurrent asset these assets are

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Unformatted text preview: classified as a noncurrent asset . These assets are used to fund the projected benefit obligation, and therefore noncurrent classification is appropriate. The current portion of a net pension liability represents the amount of benefit payments to be paid in the next 12 months (or operating cycle, if longer). Reporting Pension Plans in Financial Reporting Pension Plans in Financial Statements Statements Reporting Pension Plans in Financial Reporting Pension Plans in Financial Statements Statements Chapter 20-36 Within the Financial Statements Aggregation of Pension Plans All overfunded plans should be combined and shown as a pension asset on the balance sheet. All underfunded plans should be combined and shown as a pension liability on the balance sheet. The FASB rejected the alternative of combining all plans and representing the net amount as a single net asset or net liability. Reporting Pension Plans in Financial Reporting Pension Plans in Financial Statements Statements Reporting Pension Plans in Financial Reporting Pension Plans in Financial Statements Statements Chapter 20-37 Within the Financial Statements Actuarial Gains and Losses/Prior Service Costs Actuarial gains and losses not recognized as part of pension expense are recognized as increases and decreases in other comprehensive income. The same type of accounting is also used for prior service cost . Reporting Pension Plans in Financial Reporting Pension Plans in Financial Statements Statements Reporting Pension Plans in Financial Reporting Pension Plans in Financial Statements Statements Chapter 20-38 Actuarial Gains and Losses/Prior Service Costs To illustrate the presentation of other comprehensive income and related accumulated OCI, assume that Obey Company provides the following information for the year 2009. None of the Accumulated OCI on January 1, 2009, should be amortized in 2009. Reporting Pension Plans in Financial Reporting Pension Plans in Financial Statements Statements Reporting Pension Plans in Financial Reporting Pension Plans in Financial Statements Statements Chapter 20-39 For Obey Company, the computation of “Other comprehensive loss” for 2009 is as follows. Reporting Pension Plans in Financial Reporting Pension Plans in Financial Statements Statements Reporting Pension Plans in Financial Reporting Pension Plans in Financial Statements Statements Chapter 20-40 The components of other comprehensive income must be reported in one of three ways: (1) in a second income statement, (2) in a combined statement of comprehensive income, or (3) as a part of the statement of stockholders’ equity. Reporting Pension Plans in Financial Reporting Pension Plans in Financial Statements Statements Reporting Pension Plans in Financial Reporting Pension Plans in Financial Statements Statements Chapter 20-41 To illustrate the second income statement approach, assume that Obey has reported a traditional income statement....
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classified as a noncurrent asset These assets are used to...

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