Chapter 20 - Accounting for pensions and postretirement benefits. In this chapter students will be able to: Distinguish between accounting for the employer’s pension plan and accounting for the pension fund, identify types of pension plans and their characteristics, explain alternative measures for valuing the pension obligation. | Prepared by Coby Harmon University of California, Santa Barbara Intermediate Accounting Intermediate Accounting Prepared by Coby Harmon University of California, Santa Barbara Westmont College INTERMEDIATE ACCOUNTING F I F T E E N T H E D I T I O N Prepared by Coby Harmon University of California, Santa Barbara Westmont College kieso weygandt warfield team for success PREVIEW OF CHAPTER Intermediate Accounting 15th Edition Kieso Weygandt Warfield 20 Describe the amortization of prior service costs. Explain the accounting for unexpected gains and losses. Explain the corridor approach to amortizing gains and losses. Describe the requirements for reporting pension plans in financial statements. After studying this chapter, you should be able to: LEARNING OBJECTIVES Distinguish between accounting for the employer’s pension plan and accounting for the pension fund. Identify types of pension plans and their characteristics. Explain alternative measures for valuing the pension obligation. List the components of pension expense. Use a worksheet for employer’s pension plan entries. Accounting for Pensions and Postretirement Benefits 20 An arrangement whereby an employer provides benefits (payments) to retired employees for services they provided in their working years. Pension Plan Administrator Contributions Employer Retired Employees Benefit Payments Assets & Liabilities Nature of Pension Plans LO 1 Pension plans can be: Contributory: employees voluntarily make payments to increase their benefits. Noncontributory: employer bears the entire cost. Qualified pension plans: offer tax benefits. Pension fund should be a separate legal and accounting entity. Nature of Pension Plans LO 1 Nature of Pension Plans LO 1 Illustration 20-2 Pension Funds and Pension Expense The two most common types of pension plans are defined contribution plans and defined benefit plans. Describe the amortization of prior service costs. Explain the accounting for unexpected gains and losses. Explain . | Prepared by Coby Harmon University of California, Santa Barbara Intermediate Accounting Intermediate Accounting Prepared by Coby Harmon University of California, Santa Barbara Westmont College INTERMEDIATE ACCOUNTING F I F T E E N T H E D I T I O N Prepared by Coby Harmon University of California, Santa Barbara Westmont College kieso weygandt warfield team for success PREVIEW OF CHAPTER Intermediate Accounting 15th Edition Kieso Weygandt Warfield 20 Describe the amortization of prior service costs. Explain the accounting for unexpected gains and losses. Explain the corridor approach to amortizing gains and losses. Describe the requirements for reporting pension plans in financial statements. After studying this chapter, you should be able to: LEARNING OBJECTIVES Distinguish between accounting for the employer’s pension plan and accounting for the pension fund. Identify types of pension plans and their characteristics. Explain alternative measures for valuing the pension obligation. .
