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Postretirement Benefit Expense | Journal Entry [Video]

Postretirement Benefit Expense | Journal Entry

Similar to pension expense, postretirement benefit expense (e.g., the expense incurred due to a postretirement benefit obligation like healthcare provided for retirees) has 5 components:
(1) service cost
(2) interest cost
(3) the expected return on plan assets
(4) amortization of prior service cost (or prior service credit)
(5) amortization of net gain or net loss

Service cost is the portion of the EPBO attributable to a particular period. It is calculated as follows:

service cost = ending balance of EPBO * fraction attributed to service rendered during that period

Interest cost is calculated as follows:

interest cost = beginning balance of APBO * interest rate (aka discount rate)

The expected return reduces postretirement benefit expense; however, many postretirement healthcare plans are unfunded, which means there will be no expected return.

Unlike with pensions, prior service cost for other postretirement benefit plans is amortized over the number of years remaining until full eligibility is reached for the healthcare benefits (with pensions, prior service cost is amortized over the remaining service years of active employees).

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Negotiation skills: Creative Problem Solving in Negotiation [Video]

Negotiation is a complex and often challenging process that requires you to find solutions that satisfy both parties involved. While traditional negotiation tactics focus on reaching compromises, creative problem solving takes negotiation to the next level by exploring innovative solutions that can lead to win-win outcomes. In this guide, you will learn how to harness your creative problem-solving skills to become a more effective negotiator.Get free business and management guides, tools, and worksheets at: https://www.bizmove.com

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Finance for Non-Finance Master Business Finance Without Prior Knowledge! [Video]

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WallStreetMojos Valuation Course Ultimate gateway to mastering company valuation from scratch! [Video]

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Build Expert-Level Models with WallStreetMojo's Course! [Video]

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