Question 1

Which of the following is not covered in IAS 26?

Accepted Answer

IAS 26 covers accounting and reporting for retirement plans, which include defined contribution plans and defined benefit plans, but it does not specifically address "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

Accepted Answer

IAS 26 covers accounting and reporting by retirement benefit plans, which includes both underfunded and overfunded defined benefit plans.

Question 3

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

Accepted Answer

Defined contribution plans do not typically include a description of actuarial present values of promised retirement benefits by vested and non-vested participants in their financial statements, as benefits are based on contributions and investment returns, not predetermined benefit formulas.

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.

Accepted Answer

The answer of Which of the following is not a...

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?

Accepted Answer

The going concern assumption supports using projected salaries because it assumes that the entity will continue operating in the foreseeable future, making it reasonable to consider future salary increases when calculating retirement benefits.

Question 6

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

Accepted Answer

Defined benefit plans generally require more disclosures due to their complexity and the need to provide information on funding status, actuarial assumptions, and future obligations.

Question 7

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

Accepted Answer

Retirement benefit plans are typically accounted for based on their defined benefit obligations and plan assets, not at fair value, except for any plan assets that might be measured at fair value. The statement about being carried at fair value except when undervalued does not accurately describe the accounting treatment of retirement benefit plans.

Question 8

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

Accepted Answer

Actuaries are essential for defined benefit plans because they calculate the future obligations and current funding status of these plans, which is crucial for determining the necessary contributions to meet future liabilities. For defined contribution plans, firms may choose to use actuaries for advice on plan design and to ensure compliance with regulatory requirements, but it is not a requirement as the contributions are defined upfront and the benefits depend on the investment performance of those contributions.

Question 9

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

Accepted Answer

Plan financial statements for defined benefit plans are required to disclose information about the plan, including details on vested and non-vested benefits, to provide a complete understanding of the plan's obligations and financial status.

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.

Accepted Answer

The answer of The objective of reporting on defined contribution...

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.

Accepted Answer

The answer of For a defined benefit plan, IAS 26...

Quiz 37: Accounting and Reporting by Retirement Benefit Plans