Accounting in Action: CM2

Chapter 20 Accountin" rel="nofollow">ing in" rel="nofollow">in Action: CM2 CM2 has not offered retirement benefits to its employees but is lookin" rel="nofollow">ing for in" rel="nofollow">information on pension retirement plans. Naturally, when you show up for work, Conner and Martin" rel="nofollow">in suggest that you gather in" rel="nofollow">information and fill them in" rel="nofollow">in on possible beneflt plans and their accountin" rel="nofollow">ing consequences. lnstructions (a) V Research the authoritative titerature (usin" rel="nofollow">ing the FASB Codification) for in" rel="nofollow">information about two types of retirement pension plans that might be adopted--{efin" rel="nofollow">ined-contribution plans and defi ned-benefit plans, Write a memo explain" rel="nofollow">inin" rel="nofollow">ing these plans and describin" rel="nofollow">ing their costs and benefits. (b) V After you present the memo and explain" rel="nofollow">in the concept of pension retirement plans, Conner and Martin" rel="nofollow">in chime in" rel="nofollow">in and say they have read in" rel="nofollow">in the news that many compantes are "sin" rel="nofollow">ingin" rel="nofollow">ing the blues" because they have severely underfunded pension plans and face huge shortfalls in" rel="nofollow">in coverin" rel="nofollow">ing their loomin" rel="nofollow">ing pension obligations. However, they are also quite confused because years ago, these same companies were on top of the world when their pension plans were overfunded. How, they wonder, can this happen in" rel="nofollow">in a relatively short period of time? Explain" rel="nofollow">in to Conner and Martin" rel="nofollow">in how this can happen for defin" rel="nofollow">inedbenefit pension plans. In your discusston, address the followin" rel="nofollow">ing: Contin" rel="nofollow">inuin" rel="nofollow">ing Case 6 (1) Five components of pension expense. (2) The concept of "smoothin" rel="nofollow">ing" in" rel="nofollow">in terms of gain" rel="nofollow">insflosses (delayed recognition). Contin" rel="nofollow">inuin" rel="nofollow">ing Case 7