Student Notes, Pensions(17)

3 accounting for pensions accounting for pensions

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3. +- +-
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Chapter 20-12 Accounting for Pensions Accounting for Pensions Accounting for Pensions Accounting for Pensions Components of Pension Expense Effect on Expense Plan am e ndm e nts  o fte n inc re as e  be ne fits  fo r s e rvic e   pro vide d in prio r ye ars . The  c o s t ( prior service cost ) o f pro viding  the s e   re tro ac tive  be ne fits  is  allo c ate d to  pe ns io n e xpe ns e  o ve r  the  re m aining  s e rvic e -ye ars  o f the  affe c te d e m plo ye e s . Amortization of Unamortized Prior Service Amortization of Unamortized Prior Service Costs Costs + + 4. 4.
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Chapter 20-13 Accounting for Pensions Accounting for Pensions Accounting for Pensions Accounting for Pensions Components of Pension Expense Effect on Expense The  am o rtizatio n o f the  diffe re nc e  be twe e n the  ac tual  re turn and e xpe c te d re turn o n plan as s e ts  and/ o r  c hang e s  in ac tuarial e s tim ate s , IF, the difference is greater  than 10% of the greater of the plan obligation or plan assets at the  beginning of the year (yes, not kidding, for amusement you should read  the appendix §715-30).   Amortization of Gains or Losses Amortization of Gains or Losses +- +- 5. 5.
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Chapter 20-14 Pension Work Sheet Pension Work Sheet Pension Work Sheet Pension Work Sheet Items Annual Pension Expense Cash Prior Service Cost Gains/ Losses Pension Asset/ Liability Proj. Benefit Obligation Plan Assets Balance, 12/31 New prior service costs Balance 1/1 Service cost dr cr Interest cost dr cr Actual return cr dr Unexpected gain/loss dr/cr dr/cr Amortization of PSC cr Contributions Benefits paid Amortization of gains/losses dr/ cr dr/cr Year end J/E Accumulated OCI Y/B Balance, Y/E Accumulated OCI (PSC) Accumulated OCI (G/L) Accumulated OCI, 12/31 General Journal Entries Memo Record OCI
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Chapter 20-15 Pension Worksheet GENERAL JOURNAL ENTRIES MEMO RECORD Prior Pension Projected Pension Service Asset / Benefit Plan Items Expense Cash Costs (PSC) Gain/Loss Liability Obligation Assets Other Comprehensive Income (OCI) Using a Pension Worksheet Using a Pension Worksheet Using a Pension Worksheet Using a Pension Worksheet The  “General Journal Entries”  columns  determine the journal entries to be recorded in the  formal general ledger.  The  “Memo Record” columns maintain balances for the  unrecognized  pension items.
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Chapter 20-16 No te  the  fo llo wing  abo ut the  Wo rk S he e t: Pension Work Sheet Pension Work Sheet Pension Work Sheet Pension Work Sheet Te rm ino lo g y: O C I (O the r C o m pre he ns ive  Inc o m e ),  PS C  (Prio r S e rvic e  C o s t), G /L (G ains /Lo s s e s ).  The   balanc e  in the   Pe ns io n As s e t/ Liability c o lum n s ho uld  e q ual the  ne t balanc e  in the  m e m o  re c o rd.
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