Coca-Cola vs. Pepsi: Current Effects of IFRS on the Pension Plans of These Companies

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Comparison between Coca Cola and Pepsi Analyze and discuss the current effects of IFRS on the pension reporting for Coca-Cola and PepsiCo at 2009 year-end. There are different impacts that the IFRS will have on the pension reports of these two companies. This is irrespective of the differences that are imminent in the pension plans of the two companies. There is acceptance of voluntary contributions and a new method of governing such finances. With these contributions, there is slashing of the whole amount of funds that is necessary for the pension plan. Therefore, the mandatory contributions for the plans will be low. This is especially for a company like Coca Cola where both employers and employees do the contributions (Bradford 2011). Therefore, the company will have the ability to control the planning of the budget beforehand. In addition, the contributions to the pension plans have taxes deducted. However, this is only done up to a certain predetermined level. All this will have a positive reflection in the balance sheets of the companies. In this case, the most favored company when it comes to the taxes is PepsiCo. It is imperative that the companies note that an underfunded plan has extremely massive ramifications to the outlook of the company. Through the IFRS, there will be an increase in the funded levels of the company. Therefore, the companies will have a consequent increase in the contributions of the funds. This in turn eases the issues that the investors

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