Deck 23: Accounting for Superannuation Plans

Question 1

AAS 25 applies specifically to superannuation plans and:

A) overrides the Australian equivalent to IFR's
B) requires the preparation of information about the rights and benefits of individual members
C) applies only to private sector superannuation plans
D) all of the above

Answer 1

A

Question 2

Discuss this statement,'Property,Plant and Equipment held by the fund for its intended use in the operation of the fund and not for sale or investments should not be measured at net market value'.

Answer 2

Not Answer

Question 3

The trustees of a superannuation fund can transfer their responsibility for the general conduct of the fund:

A) if it is non-contributory
B) if it provides portable benefits
C) if the fund is externally managed
D) in none of the above cases

Answer 3

D

Question 4

The general purpose financial reports of a superannuation plan should provide information to assist in answering the following question:

A) Who are the trustees?
B) Is the plan solvent?
C) What are the names of the professional advisers?
D) None of the above

Question 5

The inclusion of a report of the trustees of a superannuation plan is:

A) required by AAS 25
B) the same as an actuarial report
C) recommended by the ASFA
D) not relevant for a self-managed plan

Question 6

The Local Industry Superannuation Plan,a defined contribution superannuation plan,had the following assets at the dates shown:
$\begin{array}{l}\begin{array}{crr}30/6/20x9&&&&30/6/20x0\\\text { Asset } & \text { Cost }& \text { Market Value } && \text { Cost }& \text { Market Value }\\\text { A } & \$ 140 & \$ 200 &&\$140&\$300\\\text { B } & 620 & 600 &&620&650\\\text { C } & 950 & 1000 &&950&980\\& 1710 & 1800 &&1710&1930\\\text { D } & 750 & 800&&--&--\\E&--&--&&1400&1410\\&\$ 460& \$ 2 600&&\$3110&\$3340\\\end{array}\\\end{array}$
Asset D was sold during the year ended 30/6/20X0 for $840; asset E was acquired during the
$$\begin{array}{l}\text { For the year ended } 30 / 6 / 20 \times 0 \text { : }\\\begin{array} { l r } \text { Interest revenue (interest, dividends, etc) totalled } & \$ 1500 \\\text { Contributions from members of the fund totalled } & 500 \\\text { Contributions from employers of members of the fund totalled } & 1000 \\\text { Administration expenses paid by the fund totalled } & 500\end{array}\end{array}$$ The statement of cash flows for the year ended 30/6/20X0 should show for 'Cash flows from investing activities' an amount of:

A) $(560) Net cash used
B) $560 Net cash provided
C) $530 Net cash provided
D) $(530) Net cash used

Question 7

The Balance Sheet of the Top Uni Staff Superannuation Plan included the following:
Net assets available to pay benefits $\quad \$10500000$
Represented by:
Liability for accrued benefits -
Allocated to members accounts $\quad \$ 10000000$
Not yet allocated $\quad\underline { 500000 }$
This indicates that the fund is probably a:

A) defined contribution fund
B) defined benefit fund
C) either of the above
D) externally managed fund

Question 8

The definition of the accrued benefits of the members of a superannuation plan as 'the present value of expected future payments arising from membership of the plan up to the measurement date' is relevant for:

A) externally managed plans
B) all superannuation plans
C) defined benefit plans
D) defined contribution plans

Question 9

Discuss the differences between the requirements of ED179 and AAS 25.

Question 10

A change in the net market value of a superannuation plan's assets over a period is included in the income of:

A) all superannuation plans
B) defined contribution superannuation plans
C) self-managed superannuation plans
D) defined benefit superannuation plans

Question 11

The Poor Academics Superannuation Plan,a defined contribution superannuation plan,had the following assets at the dates shown:
$\begin{array}{l}30 / 6 / 20 \times 9\\\begin{array}{lrr}\text { Asset } & \frac{\text { Cost }}{} & \text { Market Value } \\\hline \text { A } & \$ 140 & \$ 200 \\\text { B } & 620 & 600 \\\text { C } & \frac{950}{1710} & \frac{1000}{1800} \\& 750 & 800 \\\text { D } & \overline{-} & -\overline{-} \\\text { E } & \$ 2460 & \$ 2600\end{array}\end{array}$

$30 / 6 / 20 \times 0$
$\begin{array}{rr}\frac{\text { Cost }}{} & \text { Market Value } \\& \$ 300 \\620 & 650 \\\frac{950}{1710} & \frac{980}{1930} \\\cdots & - \\\underline{1400} & \underline{1410} \\\$ 3110 & \$ 3340 \\\hline\end{array}$
Asset D was sold during the year ended 30/6/20X0 for $840; asset E was acquired during the year ended 30/6/20X0.
$$\begin{array}{l}\text { For the year ended } 30 / 6 / 20 \times 0 \text { : }\\\begin{array} { l r } \text { Interest revenue (interest, dividends, etc) totalled } & \$ 1500 \\\text { Contributions from members of the fund totalled } & 500 \\\text { Contributions from employers of members of the fund totalled } & 1000 \\\text { Administration expenses paid by the fund totalled } & 500\end{array}\end{array}$$
The total benefits accrued as a result of the operations of the fund for the year ended 30/6/20X0 amounted to:

A) $3180
B) $2500
C) $2680
D) $2670

Question 12

The Local Industry Superannuation Plan,a defined contribution superannuation plan,had the following assets at the dates shown:
$\begin{array}{l}\begin{array}{crr}30/6/20x9&&&&30/6/20x0\\\text { Asset } & \text { Cost }& \text { Market Value } && \text { Cost }& \text { Market Value }\\\text { A } & \$ 140 & \$ 200 &&\$140&\$300\\\text { B } & 620 & 600 &&620&650\\\text { C } & 950 & 1000 &&950&980\\& 1710 & 1800 &&1710&1930\\\text { D } & 750 & 800&&--&--\\E&--&--&&1400&1410\\&\$ 460& \$ 2 600&&\$3110&\$3340\\\end{array}\\\end{array}$
Asset D was sold during the year ended 30/6/20X0 for $840; asset E was acquired during the year ended 30/6/20X0.
$$\begin{array}{l}\text { For the year ended } 30 / 6 / 20 \times 0 \text { : }\\\begin{array} { l r } \text { Interest revenue (interest, dividends, etc) totalled } & \$ 1500 \\\text { Contributions from members of the fund totalled } & 500 \\\text { Contributions from employers of members of the fund totalled } & 1000 \\\text { Administration expenses paid by the fund totalled } & 200 \\\text { Benefits paid to members totalled } & 500\end{array}\end{array}$$ The statement of cash flows for the year ended 30/6/20X0 should show for 'Net cash flows from operating activities' an amount of:

A) $2040
B) $2000
C) $770
D) $2680

Question 13

Explain the essential features of a defined benefit,externally managed,non-contributory superannuation plan whose benefits are not vested.

Question 14

The general purpose financial statements of a superannuation plan should answer the following question(s):

A) Is the plan solvent?
B) Will the plan remain solvent?
C) Are the trustees diligently performing their duties?
D) All of the above

Question 15

Discuss the roles of APRA,Asic and the ATO in the regulation of the superannuation industry.

Question 16

Australian Accounting Standard AAS 25 'Financial Reporting by Superannuation Plans' requires that,wherever possible,the amount recorded for accrued liabilities of a defined benefit superannuation plan:

A) include allocated and unallocated contributions
B) be measured in present value terms using a published discount rate
C) equal the assets of the plan less the sum of tax and sundry liabilities
D) be measured in present value terms using an appropriate, risk-adjusted discount rate

Question 17

A superannuation fund to which employees can make voluntary contributions so as to increase the value of their benefits is known as a/an:

A) defined contribution fund
B) defined benefit fund
C) externally managed fund
D) contributory fund

Question 18

A member of a superannuation fund can leave the fund but retain a right to all accrued benefits in the case of a:

A) self-managed fund
B) vested benefits fund
C) contributory fund
D) all of the above