I can’t express enough how much I hate FSA…
It becomes easier once you know the structure of B/S, I/S, and CF statement, and the basic interactions among them.
Dreary, I do say you are wrong over there.I think i have a fairly solid understanding of BS, IS, and CF, but the tricks they are using in pension is too much. If anything I just saw online balance sheet of Microsoft and GE I don’t even see the net laiblity or an asset. I can’t tell the head or tail of the adjustments the book is trying to make where they are coming from and where they are going. I’ll post some more concrete questions once I get deep into it. But for now, spending 10 hrs on Pension chapter has got me nowhere. CFAI chap on Pension i feel is VERY POORLY organized.
Not implying that it’s easy by any stretch of the imagination. However, FSA at L2 is more focused than at L1…there are only three or four areas (I think) that you have to know. The pension stuff can be handled if you put on a sheet of paper two boxes for I/S and B/S, eah with a little box for footnotes. You will see that on the B/S you will have the Funded Status, plus unamortized G/L (for both past service cost and actuarials) going into the equity section. On the I/S, you will have a line for pension expense. Then in the footnote to the B/S, you will see the beginning and end fair values of the plan, and the DBO. This is coming from someone who hasn’t done any tests yet!!!
dreary, funded status on balance sheet? dont u mean net pension asset/liability? or same thing?
I’m learing FSA like eating bread in front of my future boos - one small bite at a time and keep watching him. specifically, I spend an hour but no more than two each day to get through this part. And I have to constant review the material that I just learned; otherwise, I will forget it fast… I mean really fast…
It’s really not that bad. It’s 2 main concepts: the PBO and the PE. Work through practice questions, you’ll see that its more broad than the book entails
> funded status on balance sheet? dont u mean net pension asset/liability? or same thing? I think since SFAS 158 was issued, only the funded status is shown. However, I haven’t really looked at a real B/S to see what exact name they give it: is it funded status or net pension A/L?
Dreary, as i mentioned today at work I looked at few balance sheets on google finance, and I can’t seem to find this “funded status line item” or a pension liability or an asset on any of th eblaance sheets. this sucks… that cfa is talking to use via words as opposed to throwing a real balance sheet and point out whats what.
You’re probably looking at companies with no DB plans, they may have DC plans.
Nah. Google Finance just sucks. Their charts, news events, and upcoming important dates are nice, but ratio and statement info is frequently wrong.