Business Case Studies & Business Publications

Accounting for Defined Benefit Pension P...

Brownlee, E. Richa...

Exercise

Accounting for Defined Benefit Pension Plans at Caperton Corporation

Brownlee, E. Richard II; Hopkins, Justin J.

C-2375 | Published July 13, 2018 | 2 pages Exercise

Collection: Darden School of Business

Product Details

This exercise teaches students to account for defined benefit pension plans using a simplified example of Caperton Corporation’s defined benefit plan. The simplification treats all employees as one homogeneous group (same age, retirement date, and terminal date), which allows students to calculate present values and focus on the accounting for the future cash flows. Included is a concise spreadsheet answer guide, which illustrates the present-value calculations and how they map into plan assets, plan obligation, pension expense, and other accumulated comprehensive income.