Analyzing and Interpreting Pension Disclosures DowDuPoint's 10-K report has the following disclosures related to its retirement plans ($ millions). Obligations and Funded Status ($ millions) December 31, 2018 Change in projected benefit obligations Benefit obligations at beginning of year $57,401 Service cost 651 Interest cost 1,638 Plan participants' contributions 29 Acturarial changes in assumptions and experience (2,832) Benefits paid (3,223) Plan amendments 34 Acquisitions/divestitures/other (57) Effect of foreign exchange rates (627) Benefit obligation at end of year $53,014 Change in plan assets Fair value of plan assets at beginning of year $43,685 Actual gain on plan assets (1,524) Employer contributions 2,964 Plan participants' contributions 29 Benefits paid (3,223) Acquisitions/divestitures/other (7) Effect of foreign exchange rates (462) Fair value of plan assets at end of year $41,462 Funded status U.S. plan with plan assets $(6,956) Non-U.S. plans with plan assets (2,751) All other plans (1,845) Funded status at end of year $(11,552) Components of Net Periodic Benefit Cost ($ millions) December 31, 2018 Net periodic benefit Service cost $651 Interest cost 1,638 Expected return on plan assets (2,846) Amortization of prior service cost (24) Amortization of unrecognized (gain) loss 649 Curtailment/settlement/other (10) Net periodic benefit costs --Total $58 Weighted-average assumptions used to Determine Net periodic benefit cost for years ended Dec. 31 2018 2017 Discount Rate 3.80% 3.26% Expected return on plan assets 6.68% 6.94% Rate of compensation increase 3.95% 3.88% The following benefit payments, which reflect future service, as appropriate, are expected to be paid: ($ millions) Pension Benefits 2019 $3,197 2020 3,172 2021 3,182 2022 3,198 2023 3,219 2024-2028 16,078 Total $32,046(a) DowDuPont reports a $2,846 million expected return on pension plan assets as an offset to 2018 pension expense. Estimate what the expected return would have been had DowDupont not changed the assumption on the expected return in 2018. (Round your dollar answers to the nearest whole number.)

Analyzing and Interpreting Pension Disclosures DowDuPoint's 10-K report has the following disclosures related to its retirement plans ($ millions). Obligations and Funded Status ($ millions) December 31, 2018 Change in projected benefit obligations Benefit obligations at beginning of year $57,401 Service cost 651 Interest cost 1,638 Plan participants' contributions 29 Acturarial changes in assumptions and experience (2,832) Benefits paid (3,223) Plan amendments 34 Acquisitions/divestitures/other (57) Effect of foreign exchange rates (627) Benefit obligation at end of year $53,014 Change in plan assets Fair value of plan assets at beginning of year $43,685 Actual gain on plan assets (1,524) Employer contributions 2,964 Plan participants' contributions 29 Benefits paid (3,223) Acquisitions/divestitures/other (7) Effect of foreign exchange rates (462) Fair value of plan assets at end of year $41,462 Funded status U.S. plan with plan assets $(6,956) Non-U.S. plans with plan assets (2,751) All other plans (1,845) Funded status at end of year $(11,552) Components of Net Periodic Benefit Cost ($ millions) December 31, 2018 Net periodic benefit Service cost $651 Interest cost 1,638 Expected return on plan assets (2,846) Amortization of prior service cost (24) Amortization of unrecognized (gain) loss 649 Curtailment/settlement/other (10) Net periodic benefit costs --Total $58 Weighted-average assumptions used to Determine Net periodic benefit cost for years ended Dec. 31 2018 2017 Discount Rate 3.80% 3.26% Expected return on plan assets 6.68% 6.94% Rate of compensation increase 3.95% 3.88% The following benefit payments, which reflect future service, as appropriate, are expected to be paid: ($ millions) Pension Benefits 2019 $3,197 2020 3,172 2021 3,182 2022 3,198 2023 3,219 2024-2028 16,078 Total $32,046(a) DowDuPont reports a $2,846 million expected return on pension plan assets as an offset to 2018 pension expense. Estimate what the expected return would have been had DowDupont not changed the assumption on the expected return in 2018. (Round your dollar answers to the nearest whole number.)

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter19: Accounting For Post Retirement Benefits

Section: Chapter Questions

Problem 1E

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Analyzing and Interpreting Pension Disclosures
DowDuPoint's 10-K report has the following disclosures related to its retirement plans ($ millions).

Obligations and Funded Status ($ millions)	December 31, 2018
Change in projected benefit obligations
Benefit obligations at beginning of year	$57,401
Service cost	651
Interest cost	1,638
Plan participants' contributions	29
Acturarial changes in assumptions and experience	(2,832)
Benefits paid	(3,223)
Plan amendments	34
Acquisitions/divestitures/other	(57)
Effect of foreign exchange rates	(627)
Benefit obligation at end of year	$53,014
Change in plan assets
Fair value of plan assets at beginning of year	$43,685
Actual gain on plan assets	(1,524)
Employer contributions	2,964
Plan participants' contributions	29
Benefits paid	(3,223)
Acquisitions/divestitures/other	(7)
Effect of foreign exchange rates	(462)
Fair value of plan assets at end of year	$41,462
Funded status
U.S. plan with plan assets	$(6,956)
Non-U.S. plans with plan assets	(2,751)
All other plans	(1,845)
Funded status at end of year	$(11,552)

Components of Net Periodic Benefit Cost ($ millions)	December 31, 2018
Net periodic benefit
Service cost	$651
Interest cost	1,638
Expected return on plan assets	(2,846)
Amortization of prior service cost	(24)
Amortization of unrecognized (gain) loss	649
Curtailment/settlement/other	(10)
Net periodic benefit costs --Total	$58

Weighted-average assumptions used to Determine Net periodic benefit cost for years ended Dec. 31	2018	2017
Discount Rate	3.80%	3.26%
Expected return on plan assets	6.68%	6.94%
Rate of compensation increase	3.95%	3.88%

The following benefit payments, which reflect future service, as appropriate, are expected to be paid:

($ millions)	Pension Benefits
2019	$3,197
2020	3,172
2021	3,182
2022	3,198
2023	3,219
2024-2028	16,078
Total	$32,046

(a) DowDuPont reports a $2,846 million expected return on pension plan assets as an offset to 2018 pension expense. Estimate what the expected return would have been had DowDupont not changed the assumption on the expected return in 2018. (Round your dollar answers to the nearest whole number.)

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