Answered: The amortization of prior service costs…

The amortization of prior service costs will affect the pension expense for the period along with other comprehensive income (loss) and the projected benefit obligation. (True/False)

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 12GI

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Concept explainers

Employee Benefits

In an organization employees are the most important resource and most important asset. They can lead an organization to the sky or can be the reason for unsuccessful of business. Therefore, it is very much important that employees of an organization should be satisfied by the environment of the organization and most importantly with the salary, wages incentives, etc.

Question

The amortization of prior service costs will
affect the pension expense for the period
along with other comprehensive income
(loss) and the projected benefit obligation.
(True/False)

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Similar questions

The actuarial present value of all the benefits attributed by the pension benefit formula to employee service rendered before a specified date based on expected future compensation levels is the: a. projected benefit obligation b. prior service cost c. service cost d. accumulated benefit obligation
look over the three most important components of the pension expense. The treatment of expected and actual return on plan assets, particularly when the actual return is greater than the expected, the amortization of prior service cost and the unexpected gain/ loss. Discuss the accounting treatment of these items with suitable examples.
Depending on when an unfunded pension liability is to be paid, it will be classified on the balance sheet as either a long-term or a current liability.
The net pension liability (PBO minus plan assets) is increased by: A. Service cost. B. Expected return on plan assets. C. Amortization of prior service cost. D. Cash contributions to plan assets.
For a defined benefit pension plan, pension expense consists of five components, for which the formula is Service Cost – Interest Cost + Expected Return on Plan Assets – Amortization of Prior Service Cost +(–) Gain (Loss). Service Cost + Interest Cost – Expected Return on Plan Assets + Amortization of Prior Service Cost +(–) Gain (Loss). Service Cost + Interest Cost + Expected Return on Plan Assets – Amortization of Prior Service Cost +(–) Gain (Loss). Service Cost – Interest Cost + Expected Return on Plan Assets + Amortization of Prior Service Cost +(–) Gain (Loss).
In the reconciliation of the beginning and ending fair value of the plan assets, a company should disclose the actual return on its pension plan assets. the expected return on its pension plan assets. the components of the pension expense. all of these choices.
What are the four basic components of pension expense? Select one: A. Service cost, benefits paid, expected return on plan assets, and amortization of deferred amounts B. Service cost, benefits paid, actual return on plan assets, and amortization of deferred amounts C. Service cost, interest cost, actual return on plan assets, and amortization of deferred amounts D. Service cost,interest cost, expected return on plan assets, and amortization of deferred amounts E. None of the above
what is the difference between Accumulated Benefit Obligation and Projected Benefit Obligation? How do you determine the Plan Asset/Liability? How do you compute the Pension Expense?
Classify the following fixed costs as normally being either committed or discretionary:e. Pension payments to the company’s retirees.
b. How does each component of pension expense affect pension expense during the period (increase, decrease, or uncertain)? c. What is the difference between the accumulated pension obligation and the projected pension obligation? d. What determines whether a pension plan is underfunded or overfunded?
Which of the following types of pension plan will provide benefits that are dependent on the return on the investment of contributions? Defined benefit plan. Defined contribution plan. Undefined benefit plan. All of these choices.