Please pick one of the following items to discuss. Be sure to include relevant information and be as detailed as possible with your response. You do not need to reply to other student's posts for credit.
The board of directors of the Vermont Company is going to adopt a defined benefit pension plan for the company's employees. The board is considering granting pension credit for up to ten years of service rendered prior to the date that the plan is adopted. The board desires to grant the retroactive credit in order to provide equity to employees for their previous years of service. The board has hired an actuary to determine the cost of granting the retroactive credit. The actuary has calculated the cost of the retroactive benefits to be approximately one million dollars. The board has asked the company's controller to explain how the cost of the prior service credit would be accounted for in the financial statements.
Required:
Describe the GAAP that would be required by Vermont Company if prior service credit is granted to its employees.
Minimum paragraphs, points.
Current GAAP requires that a company with a defined benefit pension plan disclose a reconciliation of the beginning and ending balances of the projected benefit obligation.
Required:
State the items that must be included in this disclosure. Minimum paragraphs, points.
Be sure to identify which item you have chosen to discuss in your response. As always, please be sure to be the original author of your own post and content in other words, please do not copy from the internet, textbook, powerpoint, other's posts, etc
Thank you & good luck!!!
