@AleFLCPA
Defined Contribution Plan is pretty much simple.
Let say a company is required to contribute $50,000 to a pension plan under the following circumstances.
1. if the employer pays $50,000, that will be the PENSION expense for the year and will be reported on your income statement
2. if the employer pays $40,000, $50,000 will still be expensed and $10,000 will be reported at the balance sheet as pension liability.
3. if the employer pays $60,000, $50,000 will be expensed and $10,000 will be reported at the balance sheet as an asset(prepaid)
Defined Benefit Contribution is complicated but not that bad.
Your minimum periodic pension expense will be reported on your income statement which will obviously reduce your pretax income. (Its very important to memorize the elements under this expense)
Asset or liability on the balance is determined by the funded status of your pension plan.
Liability= PBO- FV of plan Assets
Asset= FV of Plan Asset- PBO.
Knowing the elements in the PBO and the Plan Asset will also help you come out with these figures.
There are other things to consider in your OCI and I think the thread below explains the stuff really well
https://www.another71.com/cpa-exam-forum/topic/confusion-on-oci-within-f6-pensions
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