When a company amends a pension plan, for accounting purposes, prior service costs should be O recorded in other comprehensive income (PSC). O reported as an expense in the period the plan is amended. O amortized in accordance with procedures used for income tax purposes. O treated as a prior period adjustment because no future periods are benefited.

When a company amends a pension plan, for accounting purposes, prior service costs should be O recorded in other comprehensive income (PSC). O reported as an expense in the period the plan is amended. O amortized in accordance with procedures used for income tax purposes. O treated as a prior period adjustment because no future periods are benefited.

SWFT Individual Income Taxes

43rd Edition

ISBN:9780357391365

Author:YOUNG

Publisher:YOUNG

Chapter19: Deferred Compensation

Section: Chapter Questions

Problem 2DQ

See similar textbooks

Related questions

Q: Which of the following is not a procedure in accounting for defined contribution plans?…

A: A defined-contribution plan refers to the type of retirement plan under which the employees add up a…

Q: A statement of comprehensive income for a company with a defined benefit pension plan does not…

A: The expected return on plan assets is the estimated investment revenue on plan assets invested. This…

Q: Which component of Kensington’s periodic pension cost would be shown in OCI ratherthan P&L?A .…

Q: Which of the following would not be reported on a plan's statement of fiduciary net position? A.)…

A: Lets understand the basics. Statement of fiducary net position is similar like a statement of…

Q: pension liability is reported when the projected benefit obligation exceeds the fair value of…

A: Funded statusFunded status of the pension is calculated as=fair value of the plan assets - projected…

Q: Which transaction affects the Other Adjustments Account on an S corporation's Schedule M-2? Taxable…

A: The S corporation is a special type of corporation that transfer its profits and losses to its…

Q: 1 a. Briefly describe how are pension gains and losses recognized. b. Explain what are pension…

A: Pension gain and losses arise due to change in the underlying assumptions which affect the total…

Q: Depending on when an unfunded pension liability is to be paid, it will be classified on the balance…

A: Yes, unfunded pension liability will be classified as a liability on the BS Balance Sheet It is…

Q: Under IFRS, any difference between the pension expense and the payments into the pension fund plan…

A: Pension expense and the contribution to pension fund are recorded through pension liability/asset…

Q: Net interest cost is a component of pension expense under IFRS. How is net interest cost calcul…

A: Net Interest cost is calculated by taking the difference between interest expense on defined benefit…

Q: A pension plan is underfunded when the employer’s obligation (PBO) exceeds the resources available…

A: Projected benefit obligation (PBO): This is the estimated present value of future retirement…

Q: Under a qualified pension plan, I. the yearly earnings on the pension plan assets are taxable income…

A: Introduction Pension plan assets are defined as the assets bought using contributions from pension…

Q: When an entity amends a pension plan, past service cost should be Recorded in other comprehensive…

A: Under a Pension plan, a regular amount is required to be contributed to a pension account and such…

Q: If pension expense recognized in a period exceeds the current amount funded by the employer, what…

A: Pension: A fixed sum of money, receivable in future or after the age of retirement, which the…

Q: The return on plan assets is the increase in plan assets (at fair value), adjusted for contributions…

A: Return on plan assets is calculated as Plan assets * Expected Return

Q: Under a nonqualified pension plan, I. the yearly earnings on the pension plan assets are taxable…

A: Non qualified Pension Plan are Non qualified because it does not comply with Employee Retirement…

Q: hange in the benefit plan assets? a.contributions from the employer. b.actual/expected return on…

A: Employees with defined benefit plans receive a fixed, predetermined benefit when they retire. The…

Q: The amortization of prior service costs will affect the pension expense for the period along with…

A: solution for above requirement are as follows

Q: Xerox reports the following pension and retiree health care ("Other") footnote as part of its 10-K…

A: (a) Service cost is the value of additional pension benefits employees earn in a year, paid in the…

Q: Which of the following is true about plan assets? Any excess return on plan assets are earned to…

A: Plan assets refer to the form of assets that are held onto by the owner for long-term employee…

Q: In the reconciliation of the beginning and ending fair value of the plan assets, a company should…

A: Fair Value of Plan Asset: It is the fair market value of plan assets that determines how much money…

Q: any past service costs should be included in ne ) pension expense of past periods. -) pension…

A: Past service cost is the change in the defined benefit obligation for employee service in prior…

Q: Which of the following is/are true with regard to accounting for short-term employee benefits?…

A: Short-term employee benefits refer to those employee benefits that are supposed to be sorted out…

Q: Which of the following causes a temporary difference between taxable and pretax accounting income?…

A: Please find the answer to the above questions below:

Q: If pension expense recognized in a period exceeds the current amount funded by the employer, what…

A: Pension: A fixed sum of money, receivable in future or after the age of retirement, which the…

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

100%

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1: CONCEPT

VIEW

Step 2: CORRECT OPTION

VIEW

Solution

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 3 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Accounting for Employee Compensations and Benefits

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

Question 17 S1: Employee-sponsored retirement plans can be categorized into two: current service cost and projected benefit obligation. S2: Liabilities pertains to the settlements which resulted in an outflow of resources embodying economic benefits. S3: PAS 19, provides that only the unvested past service costs shall be recognized as expense immediately. one statement is true two of the statements are true all statements are false all statements are true
Question text The computation of pension expense includes all the following except Select one: 13 a. interest on plan assets b. all of these are included C. service cost component measured using current salary levels. d. interest on defined benefit obligation.
Question 14 what give rises to the changes in PBO balance? A- service cost and interest cost B- prior service cost that is caused by a change in pension formula C- changes in life expectancy estimates D- all of the above O A O C OD
Sir please help me urgently please
Question 11 of 20 View Policies Current Attempt in Progress The computation of pension expense includes all the following except O service cost component measured using current salary levels. O expected/actual return on plan assets. O interest on projected benefit obligation. O amortization of prior service cost.
1 a. Briefly describe how are pension gains and losses recognized. b. Explain what are pension gains and losses and why they are not recognized in net income in the period in which they arise.
Interest cost included in pension expense recognized for a period by an employer sponsoring a defined benefit pension plan represents the shortage between the expected and actual returns on plan assets. increase in the projected benefit obligation due to the passage of time increase in the fair value of plan assets due to the passage of time. amortization of the discount on accumulated OCI (PSC) 0
3
QUESTION 3 a) Explain the following terms as used in IAS 19 Employee Benefits: (i) The term 'defined benefit pension plan'. (ii) The basis to be adopted in measuring scheme assets. (iii) The basis to be adopted in measuring scheme liabilities.
Net interest cost is a component of pension expense under IFRS. How is net interest cost calculated? Select one: O a. The increase in the DBO over the period, net of the increase in the plan assets over the period. O b. Interest expense on the DBO, net of actual interest income earned on plan assets. O c. Interest expense on the defined benefit obligation (DBO), net of expected interest income earned on plan assets. O d. The increase in the DBO over the period, net of the increase in the plan assets over the period.
20 Question 21 A debit balance in a company's Pension Asset/Liability account implies that the company has funded more than the amount Expensed since the pension plan was initiated. O True O False
Indicate by letter whether each of the events listed below increases (I), decreases (D), or has no effect (N) on an employer's periodic pension expense in the year the event occurs. Events 1. Interest cost. _____ 2. Amortization of prior service cost---AOCI. ______ 3.Excess of the expected return on plan assets over the actual return _____ 4. Expected return on plan assets. _____ 5. A plan amendment that increases benefits is made retroactive to prior years. ____ 6. Actuary's estimate of the PBO is increased.…