This chapter describe the types of postemployment benefit plans and the implications for financial reports, explain and calculate measures of a defined benefit pension obligation (., present value of the defined benefit obligation and projected benefit obligation) and net pension liability (or asset), describe the components of a company’s defined benefit pension costs, | Chapter 14 Employee Compensation: Postemployment and Share-Based Presenter’s name Presenter’s title dd Month yyyy LEARNING OUTCOMES Describe the types of postemployment benefit plans and the implications for financial reports. Explain and calculate measures of a defined benefit pension obligation (., present value of the defined benefit obligation and projected benefit obligation) and net pension liability (or asset). Describe the components of a company’s defined benefit pension costs. Explain and calculate the effect of a defined benefit plan’s assumptions on the defined benefit obligation and periodic pension cost. Explain and calculate how adjusting for items of pension and other postemployment benefits that are reported in the notes to the financial statements affects financial statements and ratios. Interpret pension plan note disclosures including cash flow related information. Explain issues associated with accounting for share-based compensation. Explain how accounting for stock grants and stock options affects financial statements, and the importance of companies’ assumptions in valuing these grants and options. 1 types of postemployment benefits: pension plans Copyright © 2013 CFA Institute 2 Amount of Future benefit to Employee Contribution from Employer Defined contribution (DC) pension plan Defined benefit (DB) pension plan Depends on investment performance of plan assets Amount (if any) is defined in each period Depends on current period estimate and investment performance of plan assets Defined based on plan’s formula LOS. Describe the types of postemployment benefit plans and the implications for financial reports. Pension plans may be either defined contribution or defined benefit. Under a defined contribution (DC) pension plan, specific defined contributions are made to an employee’s pension plan by the employer (and employee). Typically, an individual account is established for each participating employee and the accounts are invested through | Chapter 14 Employee Compensation: Postemployment and Share-Based Presenter’s name Presenter’s title dd Month yyyy LEARNING OUTCOMES Describe the types of postemployment benefit plans and the implications for financial reports. Explain and calculate measures of a defined benefit pension obligation (., present value of the defined benefit obligation and projected benefit obligation) and net pension liability (or asset). Describe the components of a company’s defined benefit pension costs. Explain and calculate the effect of a defined benefit plan’s assumptions on the defined benefit obligation and periodic pension cost. Explain and calculate how adjusting for items of pension and other postemployment benefits that are reported in the notes to the financial statements affects financial statements and ratios. Interpret pension plan note disclosures including cash flow related information. Explain issues associated with accounting for share-based compensation. Explain how accounting for
