Why is interest expense for pensions calculated using the beginning year PBO balance and not the...
Why is interest expense for pensions calculated using the beginning year PBO balance and not the ending year PBO balance? In this way, service cost doesn't get factored into interest expense calculations, which doesn't make sense to me.
Homework Answers
While calculating Intrest expense for pensions generally we take the beginning year PBO beacouse it is the last years balance and c/f to current year and by multiplying it with the discounted rate it will get adjusted for the current year expected benifit.
In acturial accounting normal cost is also termed as service cost. and service cost amount is amortized over the average remaining service period, for that it is not affected.
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Why is interest expense for pensions calculated using the
beginning year PBO balance and not the...
For calculating interest expense on pensions, why do you not use the current year service cost...
For calculating interest expense on pensions, why do you not use the current year service cost increase in PBO, and only use the beginning balance of PBO+any increase in PBO from prior service costs multiplied by the settlement rate?
The following data pertains to Havana’s Pension plan: Beginning balance of PBO $6,000, ending balance of...
The following data pertains to Havana’s Pension plan: Beginning balance of PBO $6,000, ending balance of PBO $6,654, discount rate used 5%. New Loss to PBO during the year due to change in assumptions is $150. There were no plan amendments this year. Retirees were paid $50 at the end of the year. Havana contributed $54 to the plan at the end of the year. What is the service cost for Havana’s plan? A. $454. B. $300. C. $254. D....
QUESTION 2 Why is interest included in the calculation of pension expense each period? To adjust...
QUESTION 2 Why is interest included in the calculation of pension expense each period? To adjust the present value of the PBO to its face value. To adjust the Plan Assets for interest earned during the period. To perform corridor smoothing on the balance of the OCI - Pensions account To adjust for the PBO for changes in employee compensation during the period. 3 points
please calculate the interest and PBO based of the service cost calculated and show formulas. Ulaas...
please calculate the interest and PBO based of the service
cost calculated and show formulas.
Ulaas Paste Font Alignment Number Cell Styles =IF($F$4-B16>=0,$F$12*(1+$F$8)^_($F$4-B16),0) fx 100.000.00 Free Accounting Firm Defined Ben Plan C utions Input Year's Unis Retirement Service Life Expectancy Final Year of Work Salary % Discount Rate Benefit Parlod (Annual) Amusl Retirement Benefit Payment Amuel Retirement Earned Yearly Service Cast 25000100 1.000.00 SUB110190 Outout Year Bene EBENSORENNBBURONOW Service Cost Interest 3,164 23 MVALUE! 3.290 80T 3,422.44 3,559.33 3,701.71 3,849.78...
Prepare a pension spreadsheet to assist you in determining end of 2018 balances in the PBO,...
Prepare a pension spreadsheet to assist you in determining end
of 2018 balances in the PBO, plan assets, prior service cost—AOCI,
the net loss—AOCI, and the pension liability.
Actuary and trustee reports indicate the following changes in the PBO and plan assets of Lakeside Cable during 2018: Prior service cost at Jan. 1, 2018, from plan amendment at the beginning of 2016 (amortization: $7 million per year) Net loss-pensions at Jan.1, 2018 (previous losses exceeded previous gains) Average remaining service...
9.) Calculate the interest cost associated with the PBO for 2017 using the following information. Write...
9.) Calculate the interest cost associated with the PBO for 2017 using the following information. Write the answer on the cover sheet. $ FACTS: The company has a defined benefit plan Harry's salary at the end of 2016 Retirement expected after Retirement period is expected to be Interest Rate 44,000 30 20 3.0% years of service years Benefits are calculated as a formula as the product of: Service already provided Percentage Final year's salary is projected to be 15 2.0%...
The following incomplete (columns have missing amounts) pension spreadsheet is for the current year for First...
The following incomplete (columns have missing amounts) pension spreadsheet is for the current year for First Republic Corporation (FRC). Prior Plan Service PBO Assets Cost (600) 37 Net Pension (Liability)/ Asset Net Pension (Gain)/Loss Expense Cash (99) 71 36 77 ($ in millions) Debit (Credit) Beginning balance Service cost Interest cost Expected return on assets Gain/loss on assets Amortization of: Prior service cost Net gain/loss Loss on PBO Contributions to fund Retiree benefits paid Ending balance (11) (11) (11) (541...
Check my work Actuary and trustee reports indicate the following changes in the PBO and plan...
Check my work Actuary and trustee reports indicate the following changes in the PBO and plan assets of Lakeside Cable during 2018 Prior service cost at Jan. 1, 2018, from plan amendment at the beginning of 2016 (amortization: $6 million per year) Net loss-pensions at Jan.1, 2018 (previous losses exceeded previous gains) Average remaining service life of the active employee group Actuary's discount rate $40 mi11ion $58 million 10 years 101 ($ in millions) Pla PBO Ass $380 Beginning of...
Warrick Boards calculated pension expense for its underfunded pension plan as follows: Which elements of Warrick’s...
Warrick Boards calculated pension expense for its underfunded pension plan as follows: Which elements of Warrick’s balance sheet are affected by the components of pension expense? What are the specific changes in these accounts? Service cost 254 Interest cost 165 Expected return on the plan assets ($115 actual, less $7 gain) (108) Amortization of prior service cost 11 Amortization of net loss 2 Pension expense 324 Which elements of Warrick’s balance sheet are affected by the components of pension expense?...
The following incomplete (columns have missing amounts) pension spreadsheet is for Old Tucson Corporation (OTC). Prior...
The following incomplete (columns have missing amounts) pension spreadsheet is for Old Tucson Corporation (OTC). Prior Net ($ in millions) debit (Credit) Beginning balance Service cost Interest cost Plan PBO Assets (520) Service (Gain) Pension Net Pension Expense Cash (Liability)/Asset Cost Lss 64 68 Expected return on assets Gain/loss on assets (25) (4) Amortization of: Prior service cost Net gain/ loss (8) Loss on PBO Contributions to fund (27) 27 (62) Retiree benefits paid (47) 47 84 (598) (298) 300...
QUESTION 2 Why is interest included in the calculation of pension expense each period? To adjust the present value of the PBO to its face value. To adjust the Plan Assets for interest earned during the period. To perform corridor smoothing on the balance of the OCI - Pensions account To adjust for the PBO for changes in employee compensation during the period. 3 points
please calculate the interest and PBO based of the service
cost calculated and show formulas.
Ulaas Paste Font Alignment Number Cell Styles =IF($F$4-B16>=0,$F$12*(1+$F$8)^_($F$4-B16),0) fx 100.000.00 Free Accounting Firm Defined Ben Plan C utions Input Year's Unis Retirement Service Life Expectancy Final Year of Work Salary % Discount Rate Benefit Parlod (Annual) Amusl Retirement Benefit Payment Amuel Retirement Earned Yearly Service Cast 25000100 1.000.00 SUB110190 Outout Year Bene EBENSORENNBBURONOW Service Cost Interest 3,164 23 MVALUE! 3.290 80T 3,422.44 3,559.33 3,701.71 3,849.78...
Prepare a pension spreadsheet to assist you in determining end
of 2018 balances in the PBO, plan assets, prior service cost—AOCI,
the net loss—AOCI, and the pension liability.
Actuary and trustee reports indicate the following changes in the PBO and plan assets of Lakeside Cable during 2018: Prior service cost at Jan. 1, 2018, from plan amendment at the beginning of 2016 (amortization: $7 million per year) Net loss-pensions at Jan.1, 2018 (previous losses exceeded previous gains) Average remaining service...
9.) Calculate the interest cost associated with the PBO for 2017 using the following information. Write the answer on the cover sheet. $ FACTS: The company has a defined benefit plan Harry's salary at the end of 2016 Retirement expected after Retirement period is expected to be Interest Rate 44,000 30 20 3.0% years of service years Benefits are calculated as a formula as the product of: Service already provided Percentage Final year's salary is projected to be 15 2.0%...
The following incomplete (columns have missing amounts) pension spreadsheet is for the current year for First Republic Corporation (FRC). Prior Plan Service PBO Assets Cost (600) 37 Net Pension (Liability)/ Asset Net Pension (Gain)/Loss Expense Cash (99) 71 36 77 ($ in millions) Debit (Credit) Beginning balance Service cost Interest cost Expected return on assets Gain/loss on assets Amortization of: Prior service cost Net gain/loss Loss on PBO Contributions to fund Retiree benefits paid Ending balance (11) (11) (11) (541...
Check my work Actuary and trustee reports indicate the following changes in the PBO and plan assets of Lakeside Cable during 2018 Prior service cost at Jan. 1, 2018, from plan amendment at the beginning of 2016 (amortization: $6 million per year) Net loss-pensions at Jan.1, 2018 (previous losses exceeded previous gains) Average remaining service life of the active employee group Actuary's discount rate $40 mi11ion $58 million 10 years 101 ($ in millions) Pla PBO Ass $380 Beginning of...
The following incomplete (columns have missing amounts) pension spreadsheet is for Old Tucson Corporation (OTC). Prior Net ($ in millions) debit (Credit) Beginning balance Service cost Interest cost Plan PBO Assets (520) Service (Gain) Pension Net Pension Expense Cash (Liability)/Asset Cost Lss 64 68 Expected return on assets Gain/loss on assets (25) (4) Amortization of: Prior service cost Net gain/ loss (8) Loss on PBO Contributions to fund (27) 27 (62) Retiree benefits paid (47) 47 84 (598) (298) 300...
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