Pensions - without referring to notes

statements, following, referring

Define the following important terms:

1. Pension expense (reported on financial statements)

2. Economic pension expense (what pension expense actually is)

3. Actual return on plan assets (if not given)

sameeragarwal

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发表于 2011-7-11 19:35 | 只看该作者

1. Smoothed expense figure that is basically meaningless. Used only as a smoothing mechanism to stabalize earnings
PV PBO + actuarial gains - past service costs - FV Pension assets

2. Actual pension expenses for period. (PBO1 - PBO0) - Empl. conribs - (PBA1 - PBA0)
or empl. contrib - incr. in net funded status

3. unrealized gains + divs + realized gains + int. income

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Houjichasan

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发表于 2011-7-11 19:35 | 只看该作者

Pension Expense =
Current Service Cost
+ Interest Cost
- Expected Return on Assets
+/- Amortization of (gain) or losses
+ Amortization of past service costs

Economic Pension Expense =
Change in Funded status - Employer contributions
OR
Change in PBO (exluding Benefits Paid) - Actual Return on Plan Assets

Actual Return on Plan Assets? Is a formula given? Wouldn't this just be what is earned by the investments? Or you could you the reconciliation of plan assets to extrapolate this number if given the right info.

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firat