Pensions
This term is defined as "a fund into which a sum of money is added during an employee's employment years and from which payments are drawn to support the person's retirement from work in the form of periodic payments."
What is a pension?
The objective of this type of reporting is to provide useful information to investors and creditors.
What is financial reporting?
Executives of companies are also receive compensation that is linked to the value of the company's stock. This is referred to as _____ .
Share-based compensation.
These three items make up shareholders' equity.
What are paid-in-capital (common stock plus additional paid-in-capital), retained earnings, and accumulated other comprehensive income?
This type of pension guarantees (to employees) fixed annual contributions to a pension plan (e.g., 5% of the employee's salary).
What is a defined contribution plan?
The objective of this type of reporting is to calculate the tax owed to a taxing authority.
What is tax reporting?
This is a form of employee compensation in which employees are NOT awarded shares of stock, but rather are given the option to buy shares at a specified exercise price within some specified number of years from the date of grant.
What are stock options?
This item has its own financial statement and is the summation of net income and other comprehensive income.
What is comprehensive income?
This type of pension guarantees a fixed amount of retirement money available to employees when they retire.
What is a defined benefit plan?
The differing objectives of financial and tax reporting create these. These items resolve themselves over time and, therefore, do not last forever.
What are temporary differences?
Aside from stock options, other forms of share-based compensation include _____ .
What are: 1. Restricted stock awards, 2. restricted stock units, and 3. stock appreciation rights?
These are the two most common classes of shares.
What are common and preferred shares?
These are three accounting items that appear in the financial statement related to defined benefit plans.
What are: 1. Plan assets, 2. plan liabilities (projected benefit obligation), and 3. pension expense?
When tax expense exceeds taxes payable this type of deferred tax account is created.
What is a deferred tax liability (DTL)?
This form of EPS is calculated as net income divided by weighted average number of common shares outstanding.
What is basic EPS?
When a company repurchases its own shares, it can account for the repurchase in one of these two ways.
What is a share retirement or treasury stock?
These are the 5 elements that appear in pension expense.
What are: 1. Service cost, 2. interest cost, 3. return on plan assets, 4. prior service costs, and 5. gains and losses on assets and liabilities?
This account is used to reduce deferred tax assets (DTAs) when taxable income is anticipated to be insufficient to realize the tax benefit in the future.
What is a valuation allowance?
This form of EPS adjusts for stock options that have been granted.
What is diluted EPS?
This transaction represents a distribution of accumulated profit and loss to the company's shareholders.
What is a dividend?