课件FAChap017PPT

2013TheMcGraw-HillCompanies,Inc.,Chapter17,PENSIONSANDOTHERPOSTEMPLOYMENTBENEFITPLANS,NatureofPensionPlans,Pensionplansprovideincometoindividualsduringtheirretirementyears.Thisisaccomplishedbysettingasidefundsduringanemployeesworkingyearssothatatretirement,theaccumulatedfundsplusearningsfrominvestingthosefundsareavailabletoreplacewages.,NatureofPensionPlans,Forapensionplantoqualifyforspecialtaxtreatmentitmayneedtomeetthefollowingrequirements:Coverasubstantialproportionofemployees.Cannotdiscriminateinfavorofhighlycompensatedemployees.Mustbefundedinadvanceofretirementthroughanirrevocabletrustfund.Benefitsmustvestafteraspecifiedperiodofservice.Complieswithtimingandamountofcontributions.,NatureofPensionPlans,Contributionsaredefinedbyagreement.,Employerdepositsanagreed-uponamountintoanemployee-directedinvestmentfund.,Employeebearsallriskofpensionfundperformance.,PlanCharacteristics,DefinedContributionPlans,DefinedContributionPlans,Letsassumethattheannualcontributionistobe3%ofanemployeessalary.Ifanemployeeearned$110,000duringtheyear,thecompanywouldmakethefollowingentry:,Definedbenefitexpense3,300Cash3,300,Theemployeesretirementbenefitsaretotallydependentuponhowwellinvestmentsperform.,Employeriscommittedtospecifiedretirementbenefits.,Retirementbenefitsarebasedonaformulathatconsidersyearsofservice,compensationlevel,andage.,Employerbearsallriskofpensionfundperformance.,PlanCharacteristics,DefinedBenefitPlans,DefinedBenefitPlan,Apensionformulamightdefineannualretirementbenefitsas:11/2%xYearsofservicexFinalyearssalaryBythisformula,theannualbenefitstoanemployeewhoretiresafter30yearsofservice,withafinalsalaryof$100,000,wouldbe:11/2%x30yearsx$100,000=$45,000,DefinedBenefitPlan,Thekeyelementsofadefinedbenefitplanare:Theemployersobligationtopayretirementbenefitsinthefuture.Theplanassetssetasidebytheemployerfromwhichtopaytheretirementbenefitsinthefuture.Theperiodicexpenseofhavingapensionplan.,Anactuaryassessesthevariousuncertainties(employeeturnover,salarylevels,mortality,etc.)andestimatesthecompanysobligationtoemployeesinconnectionwithitspensionplan.,DefinedBenefitCostAnOverview,Theannualdefinedbenefitcostreflectschangesinboththedefinedbenefitobligationandtheplanassets.,TheDefinedBenefitObligation,AccumulatedbenefitobligationTheactuarysestimateofthetotalretirementbenefits(attheirdiscountedpresentvalue)earnedsofarbyemployees,applyingthepensionformulausingexistingcompensationlevels.VestedbenefitobligationTheportionoftheaccumulatedbenefitobligationthatplanparticipantsareentitledtoreceiveregardlessoftheircontinuedemployment.ProjectedbenefitobligationTheactuarysestimateofthetotalretirementbenefit(attheirdiscountedpresentvalue)earnedsofarbyemployees,applyingthepensionformulausingestimatedfuturecompensationlevels.Undertheprojectedcreditunitapproach,unitsofbenefitsincreasewitheachyearofservice.,TheDefinedBenefitObligation,DefinedBenefitObligation,JessicaFarrowwashiredbyGlobalCommunicationsin2000.Sheiseligibletoparticipateinthecompanysdefinedbenefitpensionplan.Thebenefitformulais:AnnualsalaryinyearofretirementNumberofyearsofservice1.5%AnnualretirementbenefitsFarrowisexpectedtoretirein2039after40yearsofservice.Herretirementperiodisexpectedtobe20years.Attheendof2009,10yearsafterbeinghired,hersalaryis$100,000.Theinterestrateis6%.ThecompanysactuaryprojectsFarrowssalarytobe$400,000atretirement.,TheDBOasameasureofprojectedbenefitsisamoremeaningfulmeasurebecauseitincludesaprojectionofwhatthesalarymightbeatretirement.,DefinedBenefitObligation,Step1.Usethedefinedbenefitformulatodeterminetheretirementbenefitsearnedtodate.$400,000101.5%$60,000peryearStep2.Findthepresentvalueoftheretirementbenefitsasoftheretirementdate.Thepresentvalue(n=20,i=6%,)oftheretirementannuityattheretirementdateis$688,195($60,00011.46992).Step3.Findthepresentvalueoftheretirementbenefitsasofthecurrentdate.Thepresentvalue(n=30,i=6%,)oftheretirementbenefitsat2009is$119,822($688,195.17411).ThisisthePBO.,DefinedBenefitObligation,Step1.Usethedefinedbenefitformulatodeterminetheretirementbenefitsearnedtodate.$400,000111.5%$66,000peryearStep2.Findthepresentvalueoftheretirementbenefitsasoftheretirementdate.Thepresentvalue(n=20,i=6%,)oftheretirementannuityattheretirementdateis$757,015($66,00011.46992).Step3.Findthepresentvalueoftheretirementbenefitsasofthecurrentdate.Thepresentvalue(n=29,i=6%,)oftheretirementbenefitsat2010is$139,715($757,015.18456).ThisisthePBO.,Iftheactuarysestimateofthefinalsalaryhasntchanged,theDBOayearlaterattheendof2010wouldbe$139,715.,DefinedBenefitObligation,ServicecostistheincreaseintheDBOattributabletoemployeeserviceperformedduringtheperiod.,DefinedBenefitObligation,InterestcostistheinterestontheDBOduringtheperiod.,DefinedBenefitObligation,PastservicecostistheincreaseintheDBOduetoaplanchangethatprovidescreditforemployeeservicerenderedinprioryears.,DefinedBenefitObligation,RemeasurementlossorgainresultsfromrevisingestimatesusedtodeterminetheDBOandfromchangesinreturnsonplanassets.,DefinedBenefitObligation,RetireebenefitspaidreducetheDBO.,DefinedBenefitObligation,DefinedBenefitObligation,PlanAssets,TheplanassetsarenotreportedseparatelyinthestatementoffinancialpositionbutarenettedtogetherwiththeDBOtoreporteitheranetdefinedbenefitasset(debitbalance)oranetdefinedbenefitliability(creditbalance).,Thehighertheexpectedreturnonplanassets,thelesstheemployermustactuallycontribute.Ontheotherhand,arelativelylowexpectedreturnmeansthedifferencemustbemadeupbyhighercontributions.,PlanAssets,GlobalCommunicationsfundsitsdefinedbenefitplanbycontributingtheyearsservicecostplusaportionofthepriorservicecosteachyear.Cashof$48millionwascontributedtothepensionfundin2011.Planassetsatthebeginningof2011werevaluedat$300million.Theexpectedrateofreturnontheinvestmentofthoseassetswas9%,buttheactualreturnin2011was10%.Retirementbenefitsof$38millionwerepaidattheendof2011toretiredemployees.Theplanassetsattheendof2011willbe:,FundedStatusofthePensionPlan,OVERFUNDEDMarketvalueofplanassetsexceedstheactuarialpresentvalueofallbenefitsearnedbyparticipants.,UNDERFUNDEDMarketvalueofplanassetsisbelowtheactuarialpresentvalueofallbenefitsearnedbyparticipants.,ReportingtheFundedStatusofDefinedBenefitPlan,DefinedBenefitObligation(DBO)-PlanAssetsatFairValueUnderfunded/OverfundedStatus,TheRelationshipBetweenDefinedBenefitCostandChangesintheDBOandPlanAssets,ServiceCost,ActuarieshavedeterminedthatGlobalCommunicationshasservicecostof$41,000,000in2011.,InterestCost,Interestcostiscalculatedas:DBOBegDiscountrateGlobalhadDBOof$400,000,000on1/1/11.Theactuaryusesadiscountrateof6%.,2011InterestCostDBO1/1/11$400,000,0006%=$24,000,000,ReturnonPlanAssets,Theplantrusteereportsthatplanassetswere$300,000,000on1/1/11.Thetrusteeusesanexpectedreturnof6%andtheactualreturnis10%.,PastServiceCost,In2011,GlobalCommunicationsamendedthepensionplan,increasingtheDBOatthattime.Forallplanparticipants,thepastservicecostwas$4million.,RemeasurementgainsandLosses,DeterminingDefinedBenefitExpense,RemeasurementGainsandLosses,For2011,theactualreturnonplanassetsexceededtheexpectedreturnby$12million.Inaddition,therewasa$23millionlossfromchangesmadebytheactuarywhenitreviseditsestimateoffuturesalarylevelscausingitsDBOestimatetoincrease.Globalwouldmakethefollowingjournalentrytorecordthegainandloss:,OCI=Othercomprehensiveincome,LossOCI23,000,000PBO23,000,000Planassets12,000,000GainOCI12,000,000,RECORDDEFINEDBENEFITEXPENSEIN2011,($inmillions)Definedbenefitexpense(calculatedabove)51Planassets($18expectedreturnonassets)18DBO($41servicecost+$24interestcost69+$4pastservicecost)ServicecostandinterestcostaddtoGlobalsPBO.Thereturnonplanassetsaddstotheplanassets.,Servicecost$41Interestcost24Expectedreturnonplanassets($30actual,less$12gain)(18)Pastservicecost4Definedbenefitexpense$69,69PBO18Less:planassets51Netdefinedbenefitliability,RecordingtheFundingofPlanAssets,Planassets48,000,000Cash48,000,000,Itsnotunusualforthecashcontributiontodifferfromthatyearsdefinedbenefitexpense.Afterall,determiningtheperiodicdefinedbenefitexpenseandthefundingofthepensionplanaretwoseparateprocesses.,WhenGlobaladdsitsannualcashinvestmentof$48milliontoitsplanassets,thevalueofthoseplanassetsincreasesby$48million.,RecordingtheFundingofPlanAssets,PBO38,000,000Planassets38,000,000,Globalpays$38millioninretirementpensionbenefits.,IFRSvs.U.S.GAAP,RequirethatremeasurementgainsandlossesbeincludedimmediatelyamongOCIitemsinthestatementofcomprehensiveincome.AmortizationisnotpermittedunderIFRS.,RequiresthatgainsandlossesbeincludedamongOCIitemsinthestatementofcomprehensiveincome.Gainsandlossesareamortizedoverfutureperiodsusingthe“corridor”approach.,DifferencesinaccountingforactuarialgainsandlossesusingIFRSandU.S.GAAP.,IFRSvs.U.S.GAAP,IFRSandU.S.GAAPtreatpastservicecost(PSC)differently.,PSCisexpensedimmediatelytotheextentitrelatestoincome.,PSCisincludedamongOCIitemsinthestatementofcomprehensiveincomeandthussubsequentlybecomespartofAOCIwhereitisamortizedovertheaverageremainingserviceperiod.,ComprehensiveIncome,Comprehensiveincomeisamoreexpansiveviewofincomethantraditionalnetincome.,ComprehensiveIncome,AspartofajointprojectwiththeFASB,theIASBissuedarevisedversionofIASNo.1,“PresentationofFinancialStatements,”thatrevisedthestandardtobringinternationalreportingofcomprehensiveincomelargelyinlinewithU.S.standards.IFRSdoesnotpermitreportingothercomprehensiveincomeinthestatementofshareholdersequity.,IFRSvs.U.S.GAAP,PENSIONSPREADSHEET,ReportedRecordedinAccountsOnly,IFRSvs.U.S.GAAP,UnderIFRSthereisnorequirementtopresentthevariouscomponentsofdefinedbenefitexpenseasasinglenetamount.U.S.GAAPrequiresemployerstopresenttheexpenseasanetamountandprohibitsthereportingofseparatecomponentsontheincomestatement.,PostemploymentBenefitsOtherThanPensions,Estimatedmedicalcostsineachyearofretirement,Estimatednetcostofbenefits,Retireeshareofcost,Insurancepayments,Less:,Equals:,NetCostofBenefits,Manycompaniesalsofurnishotherpostemploymentbenefitstotheirretiredemployees.,PostemploymentBenefitObligation,ExpectedPostemploymentBenefitObligation(EPBO)Theactuarysestimateofthetotalpostemploymentbenefits(attheirdiscountedpresent