Researching Accounting Standards To help you become familiar with the accounting standards, this…

Researching Accounting Standards

To help you become familiar with the accounting standards, this case is designed to take you to the FASB’s Web site and have you access various publications. In this chapter, we discussed the accounting for compensation which includes pensions and other postemployment benefits. For this case, we will use Statement of FinancialAccounting Standards No. 87,“Accounting for Pensions.” Open FASB Statement No. 87.

1. Paragraph 13 mentions two problems that must be addressed when accounting for defined benefit pension plans. What are those two problems?

2. Paragraphs 17 and 18 discuss the difference between the projected benefit obligation and the accumulated benefit obligation. What is the primary difference between these two measurements?

3. The fair value of plan assets plays an important role in measuring the pension asset or liability. Paragraph 23 discusses how the actual return on plan assets is to be computed. How is that computation made?

 

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