PAS 26:Accounting and Reporting by Retirement Benefit Plans

 

Introduction

             PAS 26 applies to the preparation of financial statements of retirement benefit plans(also called 'pension schemes', 'superannuation schemes' or 'retirement benefit schemes'). It views retirement benefit plan as a reporting entity separate from the employers of the participants in the plan. Accordingly, the retirement benefit plan may have its own financial statements.

            PAS 26 also deals with the accounting and reporting to all participants a group rather than individually. It applies to all retirement benefit plans, may it be formal or informal, contributory or non- contributory, funded (managed by a trustee) or unfunded (managed by the employer), and defined contribution plan or defined benefit plan.

Defined Contribution Plan vs. Defined Benefit Plan

            Under the defined contribution plan, the employer's obligation is usually discharged by making the agreed contributions. The benefits to be received by employees are dependent on the contributions and investment income of the fund. The participants therefore are interested in information about actual contribution and the plan's investment performance.

           On the other hand, under a defined benefit plan, the benefits to be received by employees are definite amounts which can be determined by reference to the plan formula. The employer's obligation is not discharged simply by making contributions to a fund, but rather by actually paying the promised benefits when they become due. The payment of benefits therefore is dependent on the availability of earmarked funds and the employer's ability to make good any deficiency in those funds.

          Both contribution plan and benefit plan needs financial statements that contains both:

Statement of Net Assets Available for Benefits

and

Statement of Changes in Net Assets Available for Benefits

Actuarial Present Value of Promised Retirement Benefits

            "It is the present value of the expected payments by a retirement benefit plan to existing and past employees, attributable to the scenario already rendered"(PAS 26.8)

                     The present value of the retirement benefits may be calculated using either current salary levels or projected salary levels at the retirement dates.

             Actuarial valuations are frequently prepared every three years, If an actuarial valuation has not been made prepared at the date of the financial statements, the latest actuarial valuation is used as the basis. The valuation date is disclosed.

Valuation of Plan Assets

            Plan assets are measured at fair value or market value. Securities with fixed redemption values that have been acquired to match the obligations of the plan may be measured at their final redemption values. If an estimate of fair value is not possible, the reason for this is disclosed. 

Disclosure

            Aside from a Statement of Net Assets Available for Benefits and Statement of Changes in Net Assets Available for Benefits, the financial statements of either a defined contribution plan or a defined benefit plan shall also provide information on the following:

            a. summary of significant accounting policies

            b. details of any investment in the employer

            c. investment income on the plan assets

            d. administrative, tax, and other expenses.

            e. transfers from or to other plans

Terminologies

Funding - "the transfer of assets to an entity separate from the employer's entity to meet future obligations for the payment of retirement benefits."(PAS 26.8)

Net assets available for benefits - "the assets of a plan less liabilities other than the actuarial present value of promised retirement benefits."(PAS 26.8)

In BSA is Where your Future Lies Ahead

           

            Being sure of what we want to pursue can be considered an asset, so as early as possible, one must think about what career they would want to strive for. In line with this is the program you need to take in college as the first step to your career path. There are a lot of great programs out there but Bachelor of Science in Accountancy surpasses them all.

Bachelor of Science in Accountancy is a college program for those students who want to take the career of being an accountant. It teaches everything you need to know about accounting concepts, principles and laws that you will be needing in the field of accounting. In this program you will learn how to handle money wisely-you'll know how to budget your finances and how the money in the economic sector moves and works.

 

This program offers a lot of opportunities after you graduate and after passing the certified public accountant licensure examination. A lot of famous successful companies will reach out to you to work with them as Accountancy is in demand in the industry. You'll get offers here in our country and even internationally like the United States of America and Singapore.

Now, another problem to think about is where and what is the best school to study Accountancy. A school where all you need to learn are catered and where you can meet wonderful people who can help you achieve your goals. This school is the Philippine Christian University located at Dasmariñas, Cavite, this school gives the best teaching of the bachelor of science in accountancy.

Philippine Christian University is the best school to study Accountancy, you might be wondering why, it is because Philippine Christian University teaches the program professionally and gives the students an advanced learning. This university focuses on each student's goal, so they do everything they can and give the students everything they need to learn. Also, a lot of learning materials and equipment like different accounting books from different authors and computers with accounting soft wares are provided to the students for more effective learning.

Additionally, Philippine Christian University not just teaches students to prepare them in their career path but also hone them into being a better individual and a better version of themselves. Students learn to have faith, positive attitude and enhance their stewardship. Also, students are able to socialize with one another, meeting new people who will be with them throughout their college life.

As a student taking Bachelor of Science in Accountancy at Philippine Christian University, I can say that this program is the best one out there. You just don't acquire knowledge but also have a lot of fun learning with the people who will be with you throughout your four year journey as an aspiring Accountant.

For incoming college students out there, make sure to carefully choose the program you want to take and the school where you would want to study it, as once you enter, there should be no turning back.

Solace in Cooking

Cooking is not just my hobby, it is everything to me, preparing breakfast, lunch and dinner for my loved ones means the world to me. When I first saw them happily eating the dishes I cooked, it became my mission to always serve them good foods that I put all my efforts and love into. This became one of my own ways of expressing my love for them.

If I want to rest, the kitchen is the first place I could think of. After having a very exhausting day as a college student, with both mental and physical state tired, cooking is where I found rest. Cooking gives me comfort, whenever I feel all the negativity inside me, cooking is what I do, and suddenly all the heavy feelings disappear. I will always love the sound of running water while washing the vegetables, the sound of a knife hitting the chopping board while cutting meat, the smell of the kitchen as I sauté the onion and garlic and lastly the taste of the dish I've finished cooking.

Despite the solace that cooking brings, of course, it also has its bad side. There are still lots of times I got splashed by hot oil while frying, getting cut by the knife I asked my father to sharpen and got myself burnt from accidentally touching the pan. In spite of those, I realized that it is what made cooking memorable. The wounds I get are proof of how much I love cooking and every corner of the kitchen became the witness of how I put all my best into every food I cook just so my loved ones can enjoy it.

Every time I cook, it still feels like the first time to me. The joy it brought me when I first cooked adobo is still with me. I will always remember the feeling when I first held the wooden spoon tightly in my hand while slowly moving it, giving the dish a slight stir. Cooking became a part of me a long time ago and I can never imagine myself getting tired of cooking as it is how I show my love for the people that matters the most to me.

Cooking is not just simply preparing food, to me, it is where I can truly express myself. I am able to give my best to every dish I cook. It makes me happy and proud whenever they tell me that the food I cooked was delicious and that I am good at it. These compliments became my motivation to improve my cooking skills so that I can continue preparing dishes they love to eat.

Nothing would make me even happier than seeing their face light up as they take their first bite of the food that I cooked for them. The smile on their faces while eating, indicates that I succeeded at making it to their heart through my cooking. These scenes will always be embarked in my mind as I continue to express my care and affection by preparing them the foods they love.