Question

Explore the FASB Codification sections related to pensions (plan accounting) (§960, 962 & 965). Identify one concept that you did not know prior to completing this research and share your thoughts, citing the code section. Identify one question that has arisen as you have explored pensions in the Codification, and post this question as well. Your initial post should be 250-500 words, and should demonstrate solid academic writing skills. Please include proper citations in your discussion post.

Answer 1

After conducting a research on FASB codification sections (960; 962; 965) regarding pensions, there were many amendments made in the codification to improve statements. I came to know facts which I was not aware of that gave me an idea about the conducts made regarding the pension. I am going to discuss one of them below.

Code 960-205 relates to Plan accounting - Defined Contribution Pension Plans - Presentation of Financial Statements.

960-205-45-2 includes presentation of statements of net assets which are available for benefits of the plans and it should include the present amount of the following :

I) Total assets

II) Total liabilities

III) Net assets available for benefits

I was not aware of this amendment in the code as earlier before conducting this research. Earlier before amendment it also included the net assets reflecting the all investments at fair value. The amount which represented the difference between the net assets available for benefits and net assets reflecting all investments at fair value was to be presented in statements of net asset available for benefits as one single amount which would be calculated as sum of all the amounts which are actually necessary for adjustments of portion of net assets which are attributable to all fully benefit responsive investment contract from the fair value to the contract value.

The question that arose after conducting this research was that "The amendment which was being brought, was it able to make the procedures more flexible and correct and was was the benefit achieved behind this?"

Definitely the amendments done would have been in the favor of the system and had improved the system as well. But the amendments needed to be properly studied and understood for their proper implementation.

All these implementations lead to develop a better statement for reporting and demonstrating things better.