International Financial Statement Analysis

CHAPTER 14

EMPLOYEE COMPENSATION: POSTRETIREMENT AND SHARE-BASED

Elaine Henry, CFA University of Miami Coral Gables, Florida

 

Elizabeth A. Gordon Temple University Philadelphia, Pennsylvania

LEARNING OUTCOMES

After completing this chapter, you will be able to do the following:

• Explain the types of postretirement benefit plans and the implications for financial reports.

• Explain the measures of a defined-benefit pension plan’s liabilities, including the projected benefit obligation, accumulated benefit obligation, and vested benefit obligation.

• Describe the components of a company’s defined-benefit pension expense and explain the impact of plan assumptions on that pension expense.

• Explain the impact on financial statements of International Financial Reporting Standards (IFRS) and U.S. generally accepted accounting principles (U.S. GAAP) for pension and other postretirement benefits that permit some items to be reported in the footnotes rather than being reflected in the financial statements themselves.

• Evaluate pension plan footnote disclosures, including cash flow-related information.

• Evaluate the underlying economic liability (or asset) of a company based upon pension and other postretirement benefit disclosures.

• Calculate the underlying economic pension and other postretirement expense (income) based on disclosures.

• Discuss the main issues involved in accounting for share-based compensation.

• Explain the impact on financial statements of accounting for stock grants ...