Distinguish between accounting for the employer’s pension plan and accounting for the pension fund.
The employer is the organisation sponsoring the pension plan and incurs the costs and makes contribution to the pension fund
the Accounting for employers involves
allocation of pension cost to proper accounting periods
measuring the amount of pension obligation resulting from the plan
disclosing the status and effects of the plan
pension fund which receives the contribution from the employer and administer the pension assets and also makes the benefit payment to the pension receipts
Accounting for the fund involves identifying receipts as contributions from the employer sponspor, income from fund investment and computing the amount due to individual pension receipts
the fund should be a separate legal and accounting entity and mantains a set of books and prepares financial statements
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