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| [Company Name] | Memo To: | Chief Executive Officer | From: | Lola Fujino | cc: | | Date: | June 21, 2015 | Re: | Segments and Pension Plan | | | The recent acquisition by our company has created two issues which need to be addressed; the two segments which are required to be reported and the two different pension plans. My goal is to eliminate the segments as well as determine the appropriate method for reporting both pension plans. Discussed herein are descriptions of the defined contribution plan, the defined benefit plan, as well as other post retirement plans. Furthermore, I have include a recommendation as to eliminating the two segments. The expansion of our organization is indicative of our growth and…show more content…
OPEB, other post-retirement benefits refer to the non-cash benefits received by the employee at the onset of retirement. This refers to premiums for life insurance, health insurance, and may include legal service and tuition reimbursement. In likeness of the defined benefit plan, OPEB costs are to be accrued over the course of the employee’s years of work. OPEB’s are reported similar to that of the defined benefit plan as well in terms of the net pension asset and net pension liability. We must report the overfunded or underfunded amounts of the plan. Funding is determined as the variance of the fair value of the plan assets and the benefit obligation. SFAS 158 expects the measurement date of the plans conform to the financial statements (Schroeder, Clark, & Cathey, 2011). In terms of eliminating the two segments, the definition for segment reporting is accounting for a business’s individual divisions or separate lines of business. The purpose of segment reporting is to provide a transparent image of a business’s performance on each line of business for the benefit of shareholders: SFAS 131. This allows shareholders to make informed decisions and develop a substantiated risk assessment. SFAS 131. Given that the newly acquired business is separate from our existing business, we must consider our options to determine if we meet the requirements for eliminating the two segments in terms of financial reporting. Current Generally
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