Pension Acct ??

CFA Level II
#1

I know parts of SS:6 have been ragged out but i have to ask a couple questions:

1.) Are we supposed to understand the full flow of expenses and understand how everything stays balanced on the balance sheet? I can’t keep track of all the movements, especially if things are amortized over time. Anyone have a synopsis of how the balance sheet stays balanced from year-to-year?

For instance, Say you have a net asset (positive funded status), how is the balance sheet balanced? I know it’s got to be in equity but i can’t keep track of things.

2.) The book spends most of the time treating (for both IFRS and GAAP) actuarial G/L as amortizable items, but it also says they can be expensed to the income stmt under both. Why do we only talk about when they are amortized, are we to assume this is the focus?

3.) The difference in GAAP and IFRS when booking actuarial G/L is confusing as all hell. Can anyone clarify these?

Thanks all!!

#2

  1. No

  2. Actuarial G/L is amortized for all intensive purposes here, I believe

  3. Remind me of these differences please…

#3

I thought the only diff was that under GAAP all AGL were immediately recognized and under IFRS you had the option to defer. I don’t remember all the criteria that had to be met under IFRS to defer, but I don’t think thats really going to be necessary, and if it is, I’m losing out on those points just out of spite.