An employer offers a defined benefit pension plan and a defined contribution pension plan. The employer’s balance sheet is most likely to present an asset or liability related to:
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Only a defined benefit plan has a funded status that would appear on the balance sheet as an asset or liability. Employer payments into a defined contribution plan are recognized as expenses in the period incurred.
The difference between a defined benefit pension plan’s assets and its defined benefit obligation is best described as the plan’s:
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The funded status of a defined benefit plan is the difference between the plan’s assets and the defined benefit obligation. If assets are greater than the obligation, the plan is said to be overfunded, and if assets are less than the obligation, the plan is said to be underfunded.
The asset or liability reported on the balance sheet for a defined benefit plan is equal to the plan’s funded status under:
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Under U.S. GAAP, the asset presented for an overfunded plan or liability presented for an underfunded plan is the plan’s funded status. Under IFRS, the asset or liability presented does not include unrecognized prior service costs or unrecognized actuarial gains and losses.
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