You are a controller in a midsized manufacturing company that has acquired 100% of another company. The acquired company includes two segments and two different pension plans. Both of these reporting issues are new to your CEO, and your CEO wants to eliminate the segments.
Write a 700- to 1,050-word executive memo that explains the required reporting for defined contribution, defined benefit, and other post-retirement plans. Also include an explanation of what must happen for the two segments to be eliminated. (You do not need to know details about the segments to answer this.)
Our company has recently acquired another company which has two segments and two different pension plans. These segments could create reporting issues which we would want to eliminate. To fulfill this objective, we should first understand what the different postretirement plans are and what their reporting requirements are after which we would identify steps to eliminate the two segments.
➢ Defined Benefit Pension Plan
In a defined benefit pension plan, employee gets a specified monthly benefit at retirement. The amount of benefit may be decided by the company based on the salary and service level of the employee. The reporting requirement for this pension plan is to include information in two categories.
Category 1: The plan should include information in two financial statements:
(a) A statement of plan net assets that provides information about the fair value and composition of plan assets, plan liabilities, and plan net assets
(b) A statement of changes in plan net assets that provides information about the year-to-year changes in plan net assets
The notes requirement should address the following:
• Brief plan description
• Summary of significant accounting policies
• Information about contributions, legally ...
A 707-word memo is attached which includes proper formatting and four references along with the detailed response.