Coca-Cola Company Versus Pepsi Company Essay

1211 Words Aug 5th, 2012 5 Pages
Coca-Cola Company versus Pepsi Company

Coca-Cola Company versus Pepsi Company
Analyze and discuss the current effects of IFRS on the pension reporting for Coca-Cola and PepsiCo at 2009 year-end.
Pepsi and Coca Cola companies are two global competitors that have ferocious competitions with each other. The two companies have highly diversified products with varying pension plans. Pension is usually defined as a steady income that a person receives on retirement.
Recent events in the world of corporate finance have shown the importance of proper administration. Funding of corporate pension plans prompting many executives to offer only defined constitution plans. On the other hand, Coca Cola executives have rejected such approach and
…show more content…
Moreover, Canadian and U S employees who meet service and age requirements are entitled to life and medical insurance benefits.
The rate of the health care trend employed in the determination of the retirees’ medical liability and expenses undergoes annual review where the overview is often based upon the company claim experiences as well as on the information available on the health plans and the general knowledge that the health industry poses (Keiso, Weygandt & Warfield, 2012). Overview of the trends comprise of factors including demographics. This is mainly based on the company assumptions. For example, it is expected that the year 2009 will realize a decrease in the pension expense backs the expected returns on cost. Furthermore, contributions that are associated with productivity for growth program in the preceding year will help in partially offsetting an increase in amortization (Lundy, 2006). Therefore, the increase realized from experience loss amortization is mainly attributed to the pension.
Calculate the funding levels and capital gains experienced by Coca-Cola and PepsiCo in their respective pension funds.
It is expected that decrease in either the expected rate or the discount rate of return is essential in increasing pension scheme. It is understood that the effect of the expenses of the 25 base declines on the 2009 pension expense is the increase in…