Toasted Dolphin

ABO
Actuarial PV of benefits attributed by the pension benefit formula to employee service rendered before a specified date based on employee service and current and past compensation levels.

PBO
Actuarial PV of all benefits attributed by the pension benefit formula to employee service rendered before a specified date based on assumptions as to future compensation levels.

Under IFRS, the pension plan liability is the defined benefit obligation (DBO).

Companies with defined benefit pension plans must report funded status on the balance sheet.

Fair Value of Plan Assets
<PBO>
Funded Status

Overfunded = Report as noncurrent asset.

Underfunded = Report as a current liability (extent that benefits payable in the next 12 months exceed the FV of the plan's assets), a noncurrent liability, or both.

U.S. GAAP
Recognized as components of other comprehensive income in the period incurred, with the related tax effects. Then reclassified to net periodic pension cost as amortized.

IFRS
Reported in the footnotes in the period incurred. Recognized on the balance sheet (pension asset/liability) and net periodic pension cost through amortization.

Settlements
A transaction that (a) is an irrevocable action, (b) relieves the employer of primary responsibility for a pension benefit obligation, and (c) eliminates significant risks related to the obligation and the assets used ti effect the settlement.

Curtailments
AN event that significantly reduces the expected years of future service of present employees or eliminates for a significant number of employees the accrual of defined benefits for some or all of their future services.

Mnemonic: Dread

Description
Reconciling Items
Expense and OCI Components
Actuarial Assumptions
Discount Rate