Deck 37: Accounting and Reporting by Retirement Benefit Plans

Question 1

Which of the following is not covered in IAS 26?

A) Defined Contribution Plans
B) Defined Compensation Plans
C) Defined Benefit Plans
D) All of the above are covered in IAS 26.

Answer 1

Defined Compensation Plans

Question 2

Which of the following is covered in IAS 26?
I. Underfunded defined benefit plans
II. Health plans
III. Overfunded defined benefit plans
IV. Individual financial reports
V. Early Retirement plans

A) None of the above
B) All of the above
C) I, II, III, IV
D) I, II, III, V
E) I, III, IV, V
F) I, II III
G) I, IV
H) I, III
I. III
J. I

Answer 2

I, III
I. III
J. I

Question 3

Which of the following is not typically included in the financial statements for defined contribution plans?

A) A description of the investment policies
B) A description of actuarial present values of promised retirement benefits by vested and non-vested participants.
C) A statement reporting the financial position of the plan, the increases and decreases to plan assets including significant transactions, and investment performance.
D) A description of significant activities since the last report was issued.

Answer 3

A description of actuarial present values of promised retirement benefits by vested and non-vested participants.

Question 4

Which of the following is not a reason for using the projected salaries level approach for calculating the actuarial present value of promised retirement benefits.

A) It is possible to report a fund being overfunded or reporting adequate funding even though the plan is underfunded.
B) The determination of benefits for final pay plans is based on salaries at or near the retirement date.
C) Increases in benefits arising from salary changes become and obligation of the plan simultaneous with the salary changes.
D) All of the above are reasons for using the project salaries approach.

Question 5

Which of the following from the Conceptual Framework would best be used to support using the projected salaries approach for calculating the actuarial present value of promised retirement benefits?

A) Going concern assumption
B) Current measurement bases
C) Cost constraints
D) Materiality
E) Timeliness
F) Verifiability

Question 6

More disclosures are required from defined contribution plans as opposed to defined benefit plans

Question 7

Retirement benefit plans are carried at fair value except when undervalued.

Question 8

Actuaries are required to provide estimates for defined benefit plans, while firms have the option to use them for defined contribution plans.

Question 9

Plan financial statements prepared for defined benefit plans are not required to disclose non-vested benefits.

Question 10

The objective of reporting on defined contribution plans is to regularly provide information about plan assets and the investment performance of those assets. List some of the items included in financial statements to fulfill this objective.

Question 11

For a defined benefit plan, IAS 26 explicitly requires the financial statements contain one of two reports. Choose and describe one of the two reports.