Does anyone know in which periods should total compensation cost be allocated to as compensation expense?
2007-02-02 08:32:06 · 1 answers · asked by Munch_101 1 in Business & Finance ➔ Other - Business & Finance
Answer: Current and future periods.
Salary is going to be based on the current period. That's pretty straight forward. Benefits is a bit tougher. Most benefits (e.g. dental, 401k matching, insurance and other "current" benefits) will be booked during the current period. Most compensation costs don't become costs until they have been "realized" as time passes. There is one noteable exception...
The wild card is defined benefit plans.
As a defined benefit plan accrues and vests, you have to accrued for the benefits based on pension accounting. The pension cost expense is a very complex calculation based on current pension assets, some assumptions based on rates of return, accrual/vesting schedules and some other stuff from the actuary side.
2007-02-08 02:49:44 · answer #1 · answered by csanda 6 · 0⤊ 0⤋