| What is a Projected Benefit Obligation (PBO)? | Actuarial PV of all benefits |
| What is an Accumulated Benefits Obligation (ABO)? | Current or Past Salary Levels |
| What is the IFRS equivalent of PBO? | DBO |
| Equation to solve for Pension Fund Status | FV of Plan Assets - PBO (or DBO if IFRS)= Status |
| What does a positive Pension Fund Status signify? | Overfunded (Non-Current Asset) |
| What does a negative Pension Fund Status signify? | Underfunded (Current OR Non-Current Liability) |
| Net Periodic Pension Cost Equation | Service cost (Current) + Interest cost (PBO) - Return on plan assets (expended or actual) + prior service cost Amortization +/- (Gain) or loss on amortization +/- Existing (asset) or obligatory amortization |
| Journal Entry for Pension Reclassification Adjustment (Gain) | DR: OCI
CR: Net Periodic Pension Cost
DR: Deferred Tax Expense- IS
CR: Deferred Tax Expense- OCI |
| Journal Entry for Pension Reclassification Adjustment (Loss) | DR: Net Periodic Pension Cost
CR: OCI
DR: Deferred Tax Benefit - OCI
CR: Deferred Tax Benefit- IS |
| Journal Entry of Pension Comp Expense | DR: Pension Comp Expense (Current)
DR: Net Periodic Pension Cost
CR: Pension Benefit Liability
CR: OCI |
| Expected Postretirement Benefit Obligation (EPBO) Equation | EPBO= ABO+ Any nonvested benefits |
| What is the "attribution" period and how is it treated? | Lasts from day hired to date when the plan is fully vested, you must expense it. |
| Stock Option Compensation Expense Equation | FV (at grant date) / Service Period = Comp Expense per Year |
| Journal Entry for Stock Options Excersized | DR: Cash
DR: APIC - Stock Options (Reverses accum amounts over prior years = FV)
CR: CS (FV reversed in APIC- SO)
CR: APIC - CS |
| How is Interest Cost (I) calculated for Net Periodic Pension Cost? | I = Beginning PBO x Discount Rate |
| How is EXPECTED Return on Plan Assets (R) calculated for Net Periodic Pension Cost? | R = Beginning FV of Plan Assets x Expected Return Rate |
| How is Amortization of Prior Service Cost (A) calculated for Net Periodic Pension Cost? | A= Unrecog Prior Service Cost / Avg Remaining Service Life |
| How is Amortization of Unrecognized Gain or Loss (G) calculated for Net Periodic Pension Cost? | G = (Beginning Unrecognized G or L - *10% of Beg PBO OR Market Related Value*)/Avg Remaining Service Life
*Whichever is greater- pensions are GREAT!! |
| How is Amortization of Existing Net Obligation or Asset (E) calculated for Net Periodic Pension Cost? | E = (Beginning Projected Benefit Obligation - FV or Plan Assets)/ *15 years OR avg employee job life*
*Whichever is greater- pensions are GREAT!! |
| Which parts of SIR AGE adhere to "Pensions are GREAT"? | G- 10% of PBO OR Market Related Value
E- 15 yrs OR Avg Employee Job Life
WHICHEVER IS GREATER!! |
| How is ACTUAL Return on Plan Assets (R) calculated for Net Periodic Pension Cost? | Beg Bal + Contributions + Actual Return - Benefits Paid = Ending Balance |
