TAX 9873 Lecture Notes - Lecture 36: Governmental Accounting Standards Board, Expected Return, Income Statement
Document Summary
Standards other than fasb- iasb (international) and gasb (public sector) Structured on plan"s inversely with service experience of the b/t those receiving early/normal retirement population benefits on account of. Demographic assumptions should reflect plan population expected experience. Expected annual (1) used in pension benefits investment return accounting to project. Plan costs & liabilities are limits on benefits & comp. Reflects plan asset (2)plans w/ covered merit and productivity. Sensitivity is plan allocation; asset comp or ss base raises dependent management allocation integrated formulas. In general, a 1% change alters long run costs by approx. People living longer: bad impact on pensions= higher cost. 3 most important assumptions: mortality interest rate expected return on assets. Specified projected unit credit as the cost method for determining liabilities. Outlined the components of pension exp(which go into the company"s income stmt, also referred to as p&l) Outlintes items which must be disclosed at end of fiscal year on b/s.
