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Resources for Accountants

Accounting for Pensions vs. Other Postretirement Benefits [Video]

Accounting for Pensions vs. Other Postretirement Benefits

This video compares and contrasts the accounting for pensions (specifically, accounting for defined benefit pension plans) and the accounting for other postretirement benefits like healthcare, life insurance, dental coverage, vision coverage, and group legal insurance.

The accounting for pensions and other postretirement benefits is similar in that the company needs to make estimates about the amount of any future benefits and then discount those benefits to their present value to measure the company’s obligation. The obligation is then netted with plan assets to present a single amount on the balance sheet; if the amount of the obligation exceeds the plan assets the net amount is a liability, and if the plan assets exceed the amount of the obligation the net amount is an asset. The periodic expense is then recorded on the income statement.

But there are a number of differences in the accounting for pensions versus the accounting for other postretirement benefits. For example:
-Pension benefits are a set dollar amount and are thus easier to predict, whereas there is no upper limit for healthcare costs
-Pension benefits increase with each year of service, whereas other postretirement benefits are granted on an all-or-nothing basis
-Pension beneficiaries include the retiree and maybe a spouse, whereas the beneficiaries of other postretirement benefits often include the retiree, spouse, and dependents (e.g., children)

These differences and more are discussed in the video.

0:00 Introduction
0:35 Similarities
1:17 Balance sheet
2:36 Income statement
2:54 Differences
7:58 Amortization of prior service costs
9:55 Amortization of net gain or net loss

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Resources for Accountants

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How to Start a Supermarket Business | Free Supermarket Business Plan Included [Video]

Presenting 50 essential tips for starting a Supermarket business.Now you can get your free business plan template gift here: https://www.bizmove.com/business-gifts.htm This is a high quality, full blown business plan template that you can download and modify to create a quality business plan tailored to your business idea.It comes complete with detailed instructions and all the related spreadsheets. Allows you to easily prepare a professional business plan for your new businessAlso get free small business guides, tools, and worksheets at: https://www.bizmove.com

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The journey from a fledgling startup to an established company is akin to scaling a mountain—fraught with challenges, but also promising breathtaking vistas of growth and success. This transition marks a pivotal moment in the entrepreneurial odyssey, where the agility and creativity that characterized the startup phase must harmonize with the stability and maturity necessary for long-term sustainability. It's a delicate balance, requiring strategic foresight, operational finesse, and unwavering commitment. In this guide, we'll delve into the multifaceted process of transitioning from a startup to an established company, exploring key strategies and best practices to navigate this transformative journey.