Business Case Studies & Business Publications

Pensions and Financial Reporting

Allen, Brandt R., ...

Technical Note

Pensions and Financial Reporting

Allen, Brandt R.; Brownlee, E. Richard II

C-2340 | Published February 7, 2013 | 7 pages Technical Note

Collection: Darden School of Business

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Product Details

This note serves a wide audience. At Darden, it is used in two elective courses: Financial Reporting and Analysis and Financial Statement Analysis and Corporate Valuation, as well as in the open executive education program, Financial Management for Non-Financial Managers. It will also be used in the EMBA and Global EMBA programs. Depending on the type of pension plan offered, accounting for pensions can present one of the more difficult and challenging financial reporting issues that companies encounter. This note outlines the differences between defined benefit and defined contribution pension plans. It is written for students, managers and executives who have an interest in the topic but have limited accounting and financial reporting backgrounds. It covers the two major types of pension plans and the accounting and financial reporting challenges they present. It also includes an explanation of how corporate pension plans affect financial statements and the footnotes. It also mentions public pension plans. It includes an example from an actual corporate annual report. Pensions are a major global issue for corporations, countries, states and cities.