StudentShare
Contact Us
Sign In / Sign Up for FREE
Search
Go to advanced search...

Executive Memo on Accounting for Pensions and Elimination of Segments - Essay Example

Cite this document
Summary
Executive Memo on Accounting for Pensions and Elimination of Segments Name University Reporting Requirements for Pension and Other Postretirement International Accounting Standard (IAS) 19, Employee Benefits, is all about the accounting for benefits employers provide to their employees…
Download full paper File format: .doc, available for editing
GRAB THE BEST PAPER96.2% of users find it useful
Executive Memo on Accounting for Pensions and Elimination of Segments
Read Text Preview

Extract of sample "Executive Memo on Accounting for Pensions and Elimination of Segments"

Download file to see previous pages

As stated in paragraph 25 of IAS 19, there are two kinds of pensions: defined contribution and defined benefit plans. In defined contribution plans, the company’s actual obligation is just the amount it agreed to place in the fund. With this plan, the employee bears the risk if the total contribution is not enough to cover the expected benefits. In defined benefit plans, the risk is borne by the employer because they have to pay the amount of the agreed upon benefits and adjust their contributions accordingly to finance these benefits.

For defined contribution plans, the accounting and reporting requirements are simple. The company merely recognizes the required amount to be contributed as an expense. A liability will be recognized if the actual payment to the fund is less than the required contribution and a prepaid expense will be recognized if the actual payment to the fund is more than the required contribution. For disclosure or reporting purposes, the company is only required to disclose the expense amount and the contributions pertaining to key management personnel.

For defined benefit plans, the accounting processes are much more complex. If the company utilizes defined benefit plans, its expense will be based on calculations using actuarial techniques. This is because there are various assumptions that go into the calculation process. In addition, the company’s legal obligation is not the only factor for calculating the pension expense amount, there are also constructive obligations resulting from the company’s informal practices, those that could not be changed without incurring severe damage in the relationship between the employer and the employee.

The reporting for defined benefit plans is more rigorous. In general, the company will need to make adequate disclosures that will provide enough information to the financial statement users about the nature of the pension plan and any impact on the financial statements if there are changes in the plan. Specifically, the company is required to disclose its accounting policy for the recognition of actuarial gains and losses. It also needs to give a general description of the plan. It also needs to show three (3) reconciliations, as applicable, for the opening and closing balances of the present value of the obligatio

...Download file to see next pages Read More
Cite this document
  • APA
  • MLA
  • CHICAGO
(“Executive Memo on Accounting for Pensions and Elimination of Segments Essay”, n.d.)
Executive Memo on Accounting for Pensions and Elimination of Segments Essay. Retrieved from https://studentshare.org/finance-accounting/1438375-segment-reporting-and-pensions
(Executive Memo on Accounting for Pensions and Elimination of Segments Essay)
Executive Memo on Accounting for Pensions and Elimination of Segments Essay. https://studentshare.org/finance-accounting/1438375-segment-reporting-and-pensions.
“Executive Memo on Accounting for Pensions and Elimination of Segments Essay”, n.d. https://studentshare.org/finance-accounting/1438375-segment-reporting-and-pensions.
  • Cited: 0 times

CHECK THESE SAMPLES OF Executive Memo on Accounting for Pensions and Elimination of Segments

International Developments of Accounting

Table of Contents Table of Contents 2 executive Summary 1 Introduction 2 About The Airlines 2 British Airways 2 Emirates 2 Financial Statements Analysis 3 Profitability 3 Return on equity 3 Return on assets 3 Return on sales 4 Asset turnover ratio 4 Overall Comment 5 Liquidity/Solvency 5 Current Ratio 6 Quick Ratio 6 Leverage Ratio 7 Long term debt ratio 8 Debt to Equity ratio 8 Overall Comments 9 Working Capital Efficiency: 9 Long term financial structure 10 Managerial and Financial Prospect of major challenges faced by British Airways and Emirates Airlines 11 New technology challenges 11 Increase in cost due to increasing fuel prices 12 Terrorist attack 12 Liabilities on the higher side 12 … Strike by Staff Members 13 Loss in Revenue 13 Low Cost Airlines 13 Increase in Finance rates 13 High Cost of travelling 14 Highly Geared 14 Low Quality Service 14 Instability in Middle East 14 Competition 14 Critical discussion on the usefulness Financial Reporting 15 Differences between US GAAP and IFRS 17 Conclusion 20 Annexure 1 - Key Ratios Analysis 20 Bibliography 22 executive Summary We have discussed in this report a comparison of Emirates Airlines with British Airways and have analyzed both of these in airlines in respect of ratio analysis and other analysis....
21 Pages (5250 words) Essay

The Main Attributes of New Public Management New Zealand as Well the UK

Monumental changes have been revolutionizing societies globally for the last twenty years.... The changes are witnessed in the evolution and the sporadic expansion of the transnational monetary structure; the closing stages of the Cold War, as well as an enormous evolution and widespread adoption of Information Communications and Technology (ICT)....
13 Pages (3250 words) Case Study

Development and Relevance of System Development Life Cycles

The incremental model combines elements of the waterfall model in an iterative fashion to as calendar time progresses.... Followed by a linear sequence, it produces deliverable "increments" of the software.... (McDermid, 1993) An incremental model is used as the core product and is considered as a first increment after which the plan is developed for the next increment....
9 Pages (2250 words) Essay

6a: Business Segments E-mail Memo

Calliope has not reported business segments before, but the demand for its new online courses… Therefore, Jan would like to know what type of information is reported in connection with separate business segments of a company.... Calliope has not reported business segments before, but the demand for itsnew online courses is high.... Therefore, Jan would like to know what type of information is reported in connection with separate business segments of a company....
2 Pages (500 words) Essay

Acounting for pensions

On Task: accounting for pensions Introduction This essay presents a summary of the criticism of accounting for pension and the recommendation for improvement as per an article.... First, they suggest a long-term approach to accounting for pensions since the post retirement contract is long-lived.... They propose the elimination of the smoothing of gains and losses as allowed under GAAP.... The accounting practices for pensions faces a lot of criticism such as lack of clarity in the disclosure of the postretirement accounting information....
1 Pages (250 words) Essay

Accounting Standards for Segmental Information

In an annual accounting report, the purpose of a financial segment reporting is to give an accurate picture of the performance of a public company to its shareholders and investors (Crawford and Helliar, 2010).... This paper further identifies and examines the current IFRS 8 standards on operations segmenting, and their usefulness....
6 Pages (1500 words) Essay

Developing a Balanced Scorecard

The five salient perspective indicators which have been identified in the study can be summarized as follows: (a) safety management through the elimination or reduction of accidents, including related aspects such as reducing accident-related costs and leading by example as well as through an emphasis on safety awareness (b) Improvement of safety performance levels through safety learning and adequate training for new recruits, as well as through the establishment of an effective feedback system (c) operational aspects related to establishing a feedback system, through creation of a better working environment, implementing effective follow on system and carrying out effective site planning (d) safety performance through ensuring student and teacher satisfaction, as well as through the enhancement of school students' morale and lastly through (d) the safety climate, wherein a safe environment is established by controlling violent, aggressive behavior and ensuring healthy relationships among all the members of the school....
29 Pages (7250 words) Thesis

Analysis of British Airways and Emirates Airlines

The paper "Analysis of British Airways and Emirates Airlines " discusses that Emirates airline is the national airline of Dubai, United Arab Emirates.... Emirates are the largest airline of Middle East.... It carries around 2,400 passengers per week....  Headquarter of the airline is based in Dubai....
22 Pages (5500 words) Research Paper
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.
Contact Us