Chapter 18 - Additional reporting issues. After completing this chapter, students will be able to: Identify the types of accounting changes, understand how to account for retrospective accounting changes, understand how to account for impracticable changes,. | CHAPTER 18 ADDITIONAL REPORTING ISSUES INTERMEDIATE ACCOUNTING Principles and Analysis 2nd Edition Warfield Wyegandt Kieso Changes in accounting principle Changes in accounting estimate Reporting a correction of an error Summary Accounting Changes Reporting Earnings Per Share Simple capital structure Complex capital structure EPS summary Additional Reporting Issues Service Cost - Actuaries compute service cost as the present value of the new benefits earned by employees during the year. Future salary levels considered in calculation. Interest on Liability - Interest accrues each year on the PBO just as it does on any discounted debt. Actual Return on Plan Assets - Increase in pension funds from interest, dividends, and realized and unrealized changes in the fair market value of the plan assets. Amortization of Unrecognized Prior Service Cost - The cost of providing retroactive benefits is allocated to pension expense in the future, specifically to the remaining service-years of the affected employees. Gain or Loss - Volatility in pension expense can be caused by sudden and large changes in the market value of plan assets and by changes in the projected benefit obligation. Two items comprise the gain or loss: difference between the actual return and the expected return on plan assets and, amortization of the unrecognized net gain or loss from previous periods Identify the types of accounting changes. Understand how to account for retrospective accounting changes. Understand how to account for impracticable changes. Describe the accounting for changes in estimates. Describe the accounting for correction of errors. Compute earnings per share in a simple capital structure. Compute earnings per share in a complex capital structure. Learning Objectives 1. On the topic, “Challenges Facing Financial Accounting,” what did the AICPA Special Committee on Financial Reporting suggest should be included in future financial statements? Non-financial Measurements (customer . | CHAPTER 18 ADDITIONAL REPORTING ISSUES INTERMEDIATE ACCOUNTING Principles and Analysis 2nd Edition Warfield Wyegandt Kieso Changes in accounting principle Changes in accounting estimate Reporting a correction of an error Summary Accounting Changes Reporting Earnings Per Share Simple capital structure Complex capital structure EPS summary Additional Reporting Issues Service Cost - Actuaries compute service cost as the present value of the new benefits earned by employees during the year. Future salary levels considered in calculation. Interest on Liability - Interest accrues each year on the PBO just as it does on any discounted debt. Actual Return on Plan Assets - Increase in pension funds from interest, dividends, and realized and unrealized changes in the fair market value of the plan assets. Amortization of Unrecognized Prior Service Cost - The cost of providing retroactive benefits is allocated to pension expense in the future, specifically to the remaining service-years of the .
