Tax
Tax
contribution plan?
The contribution shall be recognized as expense in the period it is payable.
Any excess contribution shall be recognized as prepaid expense but only to the extent that the
prepayment will lead to a reduction in future payments or a cash refund.
Any unpaid contribution at the end of the period shall be recognized as accrued liability.
Both assets held by a long-term employee benefit fund and qualifying insurance policy
Neither assets held by a long-term employee benefit fund nor qualifying insurance policy
Retirement benefits depend on how well pension fund assets have been managed.
Actuarial assumptions are required to measure the obligation and expense and there is a
possibility of actuarial gains and losses.
The expense recognized for a defined benefit plan is not necessarily the amount of contribution
due for the period.
Defined contribution plans are more complex than defined benefit plans.
The employer's obligation is satisfied by making the appropriate amount of periodic contribution.
Defines the benefits that the employee will receive at the time of retirement.
Defines the contribution to be made by the employer and no promise is made concerning the
ultimate benefits to be paid out to the employees.
Requires that the benefit of gain or the risk of loss from the assets contributed to the plan should
be borne by the employee.
Requires that the defined benefit cost and funding must the same.
Requires an employer to contribute a certain sum each period based on the formula.
Defines the benefits that the employee will receive at the time of retirement.
Ensures that the defined benefit cost and funding are the same.
Plan assets are assets held by a long-term benefit fund and must satisfy all of the following
conditions, except
The assets in the fund are available to pay only employee benefits.
The assets in the fund are not available to the reporting entity’s own creditors.
The assets are held by an entity, the fund itself, that is legally separate from the reporting entity.
The assets in the fund can be returned to the entity even if the remaining assets are insufficient
to meet all employee benefit obligations.
The difference between interest expense on defined benefit liability, interest expense on effect of
asset ceiling and interest income on plan assets
Is equal to the discount rate times the fair value of the plan assets at the beginning of the period.
Is equal to the expected rate of return times the fair value of plan assets at the beginning of the
period.
Includes interest, dividends and change in the fair value of the plan assets during the year.
In rare circumstances, when a retirement benefit plan has attributes of both defined
contribution and defined benefit plan, the plan is deemed
The expense recognized each period is equal to the cash contribution to the plan.
The liability is determined based upon variables that reflect current salary levels.
An appropriate funding must be established to ensure that enough fund would be available at
retirement.