Reference no: EM13775584
At the end of the year, Multinational will have overfunded their Givonian pensions by about $100 million US dollars. This amount is material with respect to Multinational’s financial statements.
Required
How should this overfunding be reflected in Multinationals financial statements? Why? (Hint: When preparing your response, you might wish to consider the extent to which pension practices in Givonia differ from those in the US.)
Treatment of Overfunding of US Pension Plans under US GAAP
In the United States, any overfunding of a pension plan (i.e., when the Plan Assets are in excess of the obligation) is reported as an asset on the balance sheet.
In the US, the funds that have been set aside to meet an organization’s pension obligations are typically held by a private (i.e., non-government) agency which then pays the funds to the employees during their retirement. While the US government (actually the Pension Benefit Guarantee Corporation, the PBGC) sets minimum amounts that must be set aside each year, the US government does not generally become involved with respect to actually holding the plan assets or the payment of pensions.
In the United States, if a company overfunds their pension plan, they may terminate the plan and reclaim the overfunding (i.e., they can get their money back).
|
Diagnostic techniques issues
: What information is obtained from the diagnostic test regarding the disease?
|
|
Related to time value of money
: Hopeful company issued $1,000,000, five year bonds and agreed to make quarterly deposits of $20,000 to support repayment of the bonds. The deposits are made at the end of each year to a fund paying 16% interest compounded quarterly. What amount will ..
|
|
Division a is considering a project
: Division a is considering a project that will earn a rate of return that is greater than the required return on operating assets, but less than the division's ROI. Division B is considering a project that will earn a rate of return that is greater th..
|
|
Produces a product that passes through two processes
: The Bing Corporation produces a product that passes through two processes. During June, the first department transferred 60,000 units to the second department. The cost of the units transferred was $90,000. Materials are added uniformly in the second..
|
|
Reflected in multinationals financial statements
: At the end of the year, Multinational will have overfunded their Givonian pensions by about $100 million US dollars. This amount is material with respect to Multinational’s financial statements. How should this overfunding be reflected in Multination..
|
|
Describe a double bond according to valence bond theory
: Describe a double bond according to valence bond theory? and Explain why rotation is restricted about a double bond, but not about a single bond.
|
|
Consider the purchase of an outstanding bond
: On April 1, 2014, you consider the purchase of an outstanding bond that is issued on April 1, 2013. It has an 8% annual coupon and has a 30 year original maturity. It matures at the end of March 2043. There are five years of call protection, which is..
|
|
Balance the reaction for the combustion of heptane
: An alkane undergoes combustion when it reacts with oxygen to produce carbon dioxide, water, and energy:alkane+O2→CO2+H2O+energyBalance the reaction for the combustion of heptane:
|
|
Equivalent units of production for conversion costs
: The Martin Company uses the weighted average method. The beginning work in process consists of 6,000 units (100% completed as to materials and 50% complete as to conversion costs). The number of units completed was 120,000. What are the equivalent un..
|