Financial Reporting of Pension Costs and Share

In addition to your class tuition and study materials, you will receive the following:


Case Study

• The financial statements of a listed company to act as a 'real world' point of reference

Exercises

• Exercises to practice the key skills in class
• - Calculation and subsequent allocation of actuarial gains and losses
• - Calculation of the performance impact of equity and cash settled share based payment

Other Extras

• Certificate of attendance

Level: Intermediate


Synopsis:
The accounting treatment for both pensions and share-based payments have changed beyond recognition over the last decade, and the impact on the financial position and performance reported in the financial statements reflects this evolution. It is essential for both the preparers and users of those financial statements that they understand the consequences of current accounting practice if they are to ensure that mistakes are not made. If you are unsure of the treatment of actuarial gains and losses or wondered why issuing employees with share options could dramatically reduce profits whilst cash flows remain untouched...this is the course for you.


At the end of the course participants will be able to: Understand the impact of pension and share-based payment costs on the reported performance of an entity . Understand the scale of pension liabilities held within the statement of financial position (i.e. balance sheet) . Know where to search within published financial statements for information relevant to pensions and share-based payment . Appreciate the role of actuaries in corporate pension reporting .


Prerequisites:
A basic grounding in the principles of accounting and the layout of financial statements


Suitable For:
Preparers of financial statements, those who analyse financial information and anyone who needs to understand the accounting consequences of HR decisions.


Introduction

• Pensions in context - why the accounting treatment matters
• The impact of share-based payment recognition on corporate performance

Pension accounting

• Differentiating defined contribution and defined benefit pension schemes
• The role of the actuary
• Identifying the fair value of scheme assets
• Difficulties in the accurate recognition of pension scheme liabilities
• Reconciling the movement on pension scheme net assets - current and vested service costs, expected returns and scheme finance costs, contributions, benefit payments, actuarial gains and losses
• Accounting for actuarial differences
• Key differences in pension accounting under different GAAP regimes
• Curtailments and settlement
• The potential impact of changes proposed in the 2008 Discussion Paper

Share-based payment

• Does share-based payment really have a cost?
• Equity-settled share-based payment
• Cash-settled share-based payment
• Hybrid schemes
• Key disclosures
• Complications - deferred tax, group and treasury share transactions