Question 1

Which of the following is a true statement regarding the pension liability and pension expense recognition requirements of SFAS No. 87?

Accepted Answer

SFAS No. 87 uses an explicit contract view in requiring the recognition of a minimum pension liability. This means that the liability calculation is based on the benefits promised to employees under the terms of their employment contracts. SFAS No. 87 does not include future salary projections in the liability calculation, as this would be considered a projection of future benefits rather than a calculation based on explicit contracts. However, SFAS No. 87 does include future salary projections in the calculation of pension expense, which may lead to overestimation of the liability if these projections are too optimistic.

Question 2

What are the possible economic consequences of OPEB recognition?

Accepted Answer

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Question 3

Which of the following is $\underline{not}$ a true statement regarding SFAS No. 35?

Accepted Answer

SFAS No. 35 did not require information about the sponsor's obligations to be reported as a note in the sponsor's financial statements. Instead, it required that information to be reported on the face of the financial statements.

Question 4

Identify the four major provisions of the Employee Retirement Income Security Act of 1974 (ERISA).

Accepted Answer

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Question 5

What was the main argument of ARB 47?

Accepted Answer

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Question 6

What have research studies indicated about whether a firm's unfunded pension benefits are interpreted as liabilities?

Accepted Answer

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Question 7

Explain in general terms how defined benefit pension plans are funded.

Accepted Answer

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Question 8

Describe the two broad types of pension plans and identify how they differ from one another.

Accepted Answer

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Question 9

What was the main argument of APB Opinion 8?

Accepted Answer

APB Opinion 8 argued that pension expense should be computed using any one of five acceptable accumulated benefit methods, regardless of cash contributions.

Question 10

Which of the following accounting standards began a shift toward an asset-liability orientation in pension reporting?

Accepted Answer

SFAS No. 87, Employers' Accounting for Pensions, began a shift toward an asset-liability orientation in pension reporting by requiring companies to recognize the funded status of their defined benefit pension plans on their balance sheets. APB Opinion 8, SFAS No. 106, and SFAS No. 132 are also related to pension accounting but do not specifically address the shift toward an asset-liability orientation.

Question 11

Which of the following is $\underline{not}$ a true statement regarding SFAS No. 87?

Accepted Answer

SFAS No. 87 does not mandate the use of the accumulated benefit method; instead, it focuses on the projected benefit obligation method for pension accounting.

Question 12

Which of the following brought accrual accounting to post retirement benefits other than pensions (OPEB)?

Accepted Answer

SFAS No. 106 brought accrual accounting to post retirement benefits other than pensions (OPEB), also known as Other Post-Employment Benefits. SFAS No. 87 addressed pensions and SFAS No. 132 revised the accounting and financial reporting for pension plans. ERISA (Employee Retirement Income Security Act) established minimum standards for pension plans in private industry.

Question 13

Which of the following is $\underline{not}$ true regarding SFAS 158?

Accepted Answer

SFAS 158 requires the funded status of a defined benefit plan (overfunded or underfunded) to be recognized on the balance sheet, not just in the footnotes.

Question 14

What were the major effects of SFAS No. 106 on reporting for post-retirement benefits other than pensions?

Accepted Answer

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Question 15

Respond to the following:
a.What are the two major accounting issues related to a defined benefit plan?
b.Why do pension expense and pension liability recognition problems not arise with defined contribution plans?

Accepted Answer

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a.What are the two...

Question 16

How is pension expense calculated under SFAS No. 87, and when is pension liability recognized?

Accepted Answer

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Quiz 15: Pensions and Other Postretirement Benefits

Which of the following is a true statement regarding the pension liability and pension expense recognition requirements of SFAS No. 87?

What are the possible economic consequences of OPEB recognition?

Which of the following is $\underline{not}$ a true statement regarding SFAS No. 35?

Identify the four major provisions of the Employee Retirement Income Security Act of 1974 (ERISA).

What was the main argument of ARB 47?

What have research studies indicated about whether a firm's unfunded pension benefits are interpreted as liabilities?

Explain in general terms how defined benefit pension plans are funded.

Describe the two broad types of pension plans and identify how they differ from one another.

What was the main argument of APB Opinion 8?

Which of the following accounting standards began a shift toward an asset-liability orientation in pension reporting?

Which of the following is $\underline{not}$ a true statement regarding SFAS No. 87?

Which of the following brought accrual accounting to post retirement benefits other than pensions (OPEB) ?

Which of the following is $\underline{not}$ true regarding SFAS 158?

What were the major effects of SFAS No. 106 on reporting for post-retirement benefits other than pensions?

Respond to the following: a.What are the two major accounting issues related to a defined benefit plan? b.Why do pension expense and pension liability recognition problems not arise with defined contribution plans?

How is pension expense calculated under SFAS No. 87, and when is pension liability recognized?

Quiz 15: Pensions and Other Postretirement Benefits

Which of the following is a true statement regarding the pension liability and pension expense recognition requirements of SFAS No. 87?

What are the possible economic consequences of OPEB recognition?

Which of the following is not‾\underline{not}not​ a true statement regarding SFAS No. 35?

Identify the four major provisions of the Employee Retirement Income Security Act of 1974 (ERISA).

What was the main argument of ARB 47?

What have research studies indicated about whether a firm's unfunded pension benefits are interpreted as liabilities?

Explain in general terms how defined benefit pension plans are funded.

Describe the two broad types of pension plans and identify how they differ from one another.

What was the main argument of APB Opinion 8?

Which of the following accounting standards began a shift toward an asset-liability orientation in pension reporting?

Which of the following is not‾\underline{not}not​ a true statement regarding SFAS No. 87?

Which of the following brought accrual accounting to post retirement benefits other than pensions (OPEB) ?

Which of the following is not‾\underline{not}not​ true regarding SFAS 158?

What were the major effects of SFAS No. 106 on reporting for post-retirement benefits other than pensions?

Respond to the following: a.What are the two major accounting issues related to a defined benefit plan? b.Why do pension expense and pension liability recognition problems not arise with defined contribution plans?

How is pension expense calculated under SFAS No. 87, and when is pension liability recognized?

Which of the following is $\underline{not}$ a true statement regarding SFAS No. 35?

Which of the following is $\underline{not}$ a true statement regarding SFAS No. 87?

Which of the following is $\underline{not}$ true regarding SFAS 158?