• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
Free ACCA & CIMA online courses from OpenTuition

Free ACCA & CIMA online courses from OpenTuition

Free Notes, Lectures, Tests and Forums for ACCA and CIMA exams

  • ACCA
  • CIMA
  • FIA
  • OBU
  • Books
  • Forums
  • Search
  • Register
  • Login
  • ACCA Forums
  • Ask ACCA Tutor
  • CIMA Forums
  • Ask CIMA Tutor
  • FIA
  • OBU
  • Buy/Sell Books
  • All Forums
  • Latest Topics

Congratulations to Jamil from Pakistan and Jeeva from Malaysia - Global Prize winners!
see all ACCA December 2022 Genius Hunt Competition winners >>

Specially for OpenTuition students: 20% off BPP Books for ACCA & CIMA exams – Get your BPP Discount Code >>

Pensions – Defined Contribution Pension

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA SBR Exams › Pensions – Defined Contribution Pension

  • This topic has 3 replies, 2 voices, and was last updated 7 years ago by MikeLittle.
Viewing 4 posts - 1 through 4 (of 4 total)
  • Author
    Posts
  • October 20, 2015 at 2:48 pm #277844
    scarborough
    Member
    • Topics: 6
    • Replies: 4
    • ☆

    Golden Gate has a defined contribution pension scheme that all employees are
    enrolled into. However, in the year ended 30 June , it set up an additional fund
    (Fund) as a way of enhancing post-retirement benefits. The terms of the Fund are as
    follows:
    • Employees with more than two years’ service will be automatically enrolled
    into the Fund.
    • Golden Gate’s contributions into the Fund are voluntary. In the year ended
    30 April 2015, its contributions were equivalent to 1% of wages and salaries.
    • Whilst the fund is in existence members will, upon retirement, receive an
    annual lump sum based on their number of years of service.
    • Golden Gate can cancel the Fund at any point. If cancelled, no further benefits
    or compensation will be paid to members.

    Previously, the national press have been critical of Golden Gate because of its low
    levels of employee remuneration, which have generally increased below the level of
    inflation. As a result, some believe that the announcement of the Fund is simply a
    public relations exercise, and many employees remain sceptical about Golden Gate’s
    commitment to it.

    I am beyond confused… Any help on how this should be accounted for would be great…

    Thanks

    October 20, 2015 at 3:35 pm #277851
    MikeLittle
    Keymaster
    • Topics: 26
    • Replies: 22705
    • ☆☆☆☆☆

    Well, it doesn’t look to me like a defined benefit scheme so the accounting for it would simply be to record as a contribution the amount paid by the company each year.

    There appears to be no obligation on the company to pay any benefits out – “Golden Gate can cancel the Fund at any point. If cancelled, no further benefits or compensation will be paid to members” – gives us a pretty good clue about that point

    What more do you want?

    Where’s the question from – you clearly haven’t made it up yourself?

    October 20, 2015 at 4:13 pm #277869
    scarborough
    Member
    • Topics: 6
    • Replies: 4
    • ☆

    this was a mock question set from Kaplan.The question makes reference to 8 marks in total for the answer and i think that it whats throwing me? I understand the contributions made are what are to be shown in the P&L but i assumed i’m missing something key given the marks at stake?

    Thanks

    October 20, 2015 at 5:56 pm #277895
    MikeLittle
    Keymaster
    • Topics: 26
    • Replies: 22705
    • ☆☆☆☆☆

    No, you can chat about why it’s not a defined benefit scheme – what the characteristics of a defined benefit scheme should be

    Then chat about the characteristics from the question that show that it’s not a db scheme

    Then chat about what the accounting treatment should be

    Tell me, what has the answer done? For 8 marks there should ideally be 8 separate 2 line paragraphs (you and I call them sentences, with a line left between the sentences)

    I was looking at a similar question yesterday (called Minco I seem to remember – look that up in google and you may find the answer useful)

  • Author
    Posts
Viewing 4 posts - 1 through 4 (of 4 total)
  • You must be logged in to reply to this topic.
Log In

Primary Sidebar

ACCA News:

 

ACCA My Exam Performance for non-variant Applied Skills exams is available NOW

NEW! Download the ACCA Pass Guide

FREE Verifiable CPD for ACCA Members

ACCA mock exams and debrief videos

ACCA Options:  “Read the Mind of the Marker” articles

Subscribe to ACCA’s Student Accountant Direct

Donate

If you have benefited from OpenTuition please donate.

ACCA CBE 2023 Exams

Instant Poll * How was your exam, and what was the result?

BT CBE exam was.. | MA CBE exam was..
FA CBE exam was.. | LW CBE exam was..

Specially for OpenTuition students

20% off BPP Books

Get BPP Discount Code

Latest comments

  • Amalsudheesh on FA Chapter 6 Questions Depreciation
  • Ravendra Arjune on FA Chapter 22 Questions Group Accounts The Consolidated Statement of Financial Position (1)
  • Ken Garrett on The Nature of Performance Management – ACCA Advanced Performance Management (APM)
  • Mustafy on Objective of financial reporting – ACCA Financial Reporting (FR)
  • John Moffat on IAS 16 Property, Plant and Equipment – ACCA Financial Accounting (FA) lectures

Copyright © 2023 · Support · Contact · Advertising · OpenLicense · About · Sitemap · Comments · Log in


We use cookies to show you relevant advertising, find out more: Privacy Policy · Cookie Policy