Concept explainers
(1)
Pension plan: This is the plan devised by corporations to pay the employees an income after their retirement, in the form of pension.
Projected benefit obligation (PBO): This is the estimated present value of future retirement benefits, accumulated based on the future compensation levels.
To mention: The changes in PBO for the qualified plans, for Corporation T, for the years ended January 30, 2016 (2015) and January 31, 2015 (2014)
(2)
Plan assets: The assets which are used to satisfy the postretirement obligation, are held as a pension fund by the trustee, to invest the employer contributions,
To mention: The changes in plan assets for the qualified plans, for Corporation T, for the years ended January 30, 2016 (2015) and January 31, 2015 (2014)
(3)
Funded status: The net difference of the total of projected benefit obligation (PBO) and pension plan assets are referred to as funded status. If the balance of PBO is more than plan assets, the difference is referred to as underfunded status, and reported as net pension liability on the
To indicate: Whether the pension plan of Corporation T are underfunded or overfunded, for the years ended January 30, 2016 (2015) and January 31, 2015 (2014)
(4)
Pension expense: Pension expense is an expense to the employer paid as compensation after the completion of services performed by the employees.
Pension expense includes the following components:
- Service cost
- Interest cost
- Expected return on plan assets
- Amortization of prior service cost
- Amortization of net loss or net gain
To indicate: The components of pension expense for Corporation T, for the years ended January 30, 2016 (2015), January 31, 2015 (2014), and February 1,2014 (2013)
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Chapter 17 Solutions
GEN COMBO INTERMEDIATE ACCOUNTING; CONNECT ACCESS CARD
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