Pension Worksheet 1 2 3 4 5 6 7 8
SFAS NO. 158 Accounts on Employer's Books Not on Books
Income Stmt BS Other comprehensive income stmt BS Memorandum Amounts
Projected
Pension Transition Net actuarial Prior Service Benefit
2006 CLASSROOM VERSION Expense Cash (Gain)/Loss (gain)/loss Cost Funded Status Obligation Plan Assets
BALANCE FORWARD (after implementation of SFAS No. 158) -295 -1,095 800 0
Service Cost 110 -110 0
9% Interest Cost 99 -99 0
10% Expected return on plan assets -80 80 0
110 Corridor Amount 0
25 AOCI Actuarial (BoY)
0 Excess 0
AMORTIZATIONS: 0
14 Unrecognized gain/loss 0 0
Prior Service Cost 0
Transition Amount 90 -90 0
Contributions to Pension Plan -120 120 0
Retirement Benefits Paid by Plan 105 -105 0
Actual Return on Plan Assets -90 90 0
Actuarial Adjustments to PBO 33 -33 0
Amounts for journal entry: 219 -120 -90 23 0 -32 0
AOCI balance forward 270 25
BALANCES AT YEAR END 180 48 -327 -1,232 905 0
Summary journal entry Debit Credit Balance sheet presentation:
12/31/2006 Pension expense $ 219 Long term liability 327 cr
Cash $ 120
AOCI - transition loss $ - $ 90 Acc'd Other Comp Income
AOCI - actuarial gain/loss $ 23 $ - AOCI 228 dr
AOCI - prior service cost $ - $ -
Net pension obligation or asset $ - $ 32
$ 242 $ 242
Pension Worksheet 1 2 3 4 5 6 7 8
SFAS NO. 158 Accounts on Employer's Books Not on Books
Income Stmt BS Other comprehensive income stmt BS Memorandum Amounts
Projected
Pension Transition Net actuarial Prior Service Benefit
2007 CLASSROOM VERSION Expense Cash (Gain)/Loss (gain)/loss Cost Funded Status Obligation Plan Assets
BALANCE FORWARD -327 -1,232 905 0
Service Cost 120 -120 0
8% Interest Cost 99 -99 0
7% Expected return on plan assets -63 63 0
123 Corridor Amount 0
48 AOCI Actuarial (BoY)
0 Excess 0
AMORTIZATIONS: 0
11 Unrecognized gain/loss 0 0
Prior Service Cost 0
Transition Amount 90 -90 0
Contributions to Pension Plan -150 150 0
Retirement Benefits Paid by Plan 125 -125 0
Actual Return on Plan Assets -60 60 0
Actuarial Adjustments to PBO 311 -311 0
Amounts for journal entry: 246 -150 -90 314 0 -320 0
AOCI balance forward 180 48 0
BALANCES AT YEAR END 90 362 0 -647 -1,637 990 0
Summary journal entry Debit Credit Balance sheet presentation:
12/31/2007 Pension expense $ 246 Long term liability 647 cr
Cash $ 150
AOCI - transition loss $ - $ 90 Acc'd Other Comp Income
AOCI - actuarial gain/loss $ 314 $ - AOCI 452 dr
AOCI - prior service cost $ - $ -
Net pension obligation or asset $ - $ 320
$ 560 $ 560
Pension Worksheet 1 2 3 4 5 6 7 8
SFAS NO. 158 Accounts on Employer's Books Not on Books
Income Stmt BS Other comprehensive income stmt BS Memorandum Amounts
Projected
Pension Transition Net actuarial Prior Service Benefit
2008 CLASSROOM VERSION Expense Cash (Gain)/Loss (gain)/loss Cost Funded Status Obligation Plan Assets
BALANCE FORWARD -647 -1,637 990
Plan amendment -220 -220
ADJUSTED BALANCE FORWARD -867 -1,857 990 0
Service Cost 130 -130 0
8% Interest Cost 149 -149 0
9% Expected return on plan assets -89 89 0
186 Corridor Amount 0
362 AOCI Actuarial (BoY)
176 Excess 0
AMORTIZATIONS: 0
11 Unrecognized gain/loss 16 -16 0
11 Prior Service Cost 20 -20 0
Transition Amount 90 -90 0
Contributions to Pension Plan -225 225 0
Retirement Benefits Paid by Plan 125 -125 0
Actual Return on Plan Assets -140 140 0
Actuarial Adjustments to PBO 97 -97 0
Amounts for journal entry: 316 -225 -90 30 -20 -11 0
AOCI balance forward 90 362 220
BALANCES AT YEAR END 0 392 200 -878 -2,108 1,230 0
Balance sheet presentation:
Long term liability
Journal entry to record plan amendment 11 cr
Summary journal entry Debit Credit Debit Credit
12/31/2008 Pension expense $ 316 Acc'd cost
1/1/2008 AOCI - Prior serviceOther Comp Income 220
Cash $ 225 AOCI
Net pension obligation or asset 220
AOCI - transition loss $ - $ 90
AOCI - actuarial gain/loss $ 30 $ - Balance sheet presentation:
AOCI - prior service cost $ - $ 20
Net pension obligation or asset $ - $ 11 Long-term liability 878
$ 346 $ 346
AOCI 592
Pension Worksheet 1 2 3 4 5 6 7 8
SFAS NO. 158 Accounts on Employer's Books Not on Books
Income Stmt BS Other comprehensive income stmt BS Memorandum Amounts
Projected
Pension Transition Net actuarial Prior Service Benefit
2009 CLASSROOM VERSION Expense Cash (Gain)/Loss (gain)/loss Cost Funded Status Obligation Plan Assets
BALANCE FORWARD -878 -2,108 1,230 0
Service Cost 140 -140 0
11% Interest Cost 232 -232 0
10% Expected return on plan assets -123 123 0
211 Corridor Amount 0
392 AOCI Actuarial (BoY)
181 Excess 0
AMORTIZATIONS: 0
12 Unrecognized gain/loss 15 -15 0
Prior Service Cost 20 -20 0
Transition Amount 0
Contributions to Pension Plan -250 250 0
Retirement Benefits Paid by Plan 140 -140 0
Actual Return on Plan Assets -128 128 0
Actuarial Adjustments to PBO -13 13 0
Amounts for journal entry: 284 -250 0 -33 -20 19 0
AOCI balance forward 0 392 200
BALANCES AT YEAR END 0 359 180 -859 -2,327 1,468 0
Summary journal entry Debit Credit Balance sheet presentation:
12/31/2009 Pension expense $ 284 Long term liability 859 cr
Cash $ 250
AOCI - transition loss $ - $ - Acc'd Other Comp Income
AOCI - actuarial gain/loss $ - $ 33 AOCI 539 dr
AOCI - prior service cost $ - $ 20
Net pension obligation or asset $ 19 $ -
$ 303 $ 303
Pension Worksheet 1 2 3 4 5 6 7 8
Accounts on Employer's Books Not on Books
Income Stmt BS Other comprehensive income stmt BS Memorandum Amounts
Projected
Pension Transition Net actuarial Prior Service Benefit
2010 CLASSROOM VERSION Expense Cash (Gain)/Loss (gain)/loss Cost Funded Status Obligation Plan Assets
BALANCE FORWARD -859 -2,327 1,468 0
Service Cost 150 -150 0
8% Interest Cost 186 -186 0
9% Expected return on plan assets -132 132 0
233 Corridor Amount 0
359 AOCI Actuarial (BoY)
126 Excess 0
AMORTIZATIONS: 0
15 Unrecognized gain/loss 8 -8 0
Prior Service Cost 20 -20 0
Transition Amount 0
Contributions to Pension Plan -275 275 0
Retirement Benefits Paid by Plan 145 -145 0
Actual Return on Plan Assets -149 149 0
Actuarial Adjustments to PBO 52 -52 0
Amounts for journal entry: 232 -275 0 27 -20 36 0
AOCI balance forward 0 359 180
BALANCES AT YEAR END 0 386 160 -823 -2,570 1,747 0
Summary journal entry Debit Credit Balance sheet presentation:
12/31/2010 Pension expense $ 232 Long term liability 823 cr
Cash $ 275
AOCI - transition loss $ - $ - Acc'd Other Comp Income
AOCI - actuarial gain/loss $ 27 $ - AOCI 546 dr
AOCI - prior service cost $ - $ 20
Net pension obligation or asset $ 36 $ -
$ 295 $ 295
Prior Service Costs are to be amortized by the expected years of service method (or
alternate as long is it is not less rapid)
Assume that ABC Inc. has 23 employees that are expected to provide the listed years of service.
1 2 3 4 5 6 7 8 9 10
Expected
Employee Number of years of
Group employees service
A 3 1 3
B 5 2 5 5
C 5 3 5 5 5
D 5 4 5 5 5 5
E 2 5 2 2 2 2 2
F 3 10 3 3 3 3 3 3 3 3 3 3
23 23 20 15 10 5 3 3 3 3 3
Compute: average remaining service life 88 years
23 employees
3.8261
Straight-line amortization amount
880,000
Assume PBO increases by
Amortization schedule for expected years of service method:
Amortization PSC Unrecognized
rate recognized PSC Year
23/88 230,000 650,000 1
5/22 200,000 450,000 2
15/88 150,000 300,000 3
5/44 100,000 200,000 4
5/88 50,000 150,000 5
3/88 30,000 120,000 6
3/88 30,000 90,000 7
3/88 30,000 60,000 8
3/88 30,000 30,000 9
3/88 30,000 0 10
1.000000 880,000
10/23/2011 6-
-4dae98da-46dd-468a-b625-0a22f7ad3ef7.xlsx PSC Amort -sol
88
230,005
230,000
10/23/2011 7-
-4dae98da-46dd-468a-b625-0a22f7ad3ef7.xlsx PSC Amort -sol