rage ratios and interest quarter of the year. The potential breach of concern disclosure at that time, Discuss why a violation of ise an auditor to issue a going-concern exception for Rayoniet. Financial Reporting for Pensions. Q10.3 General Motors Company Pension Costs 2018 2017 2016 Service cost 24 493.0 Included in operating income (new rules) $ 514.0 $ 654.0 Interest cost 2,514.0 (4,715.0) 2,618.0 (4,427.0) 122.0 2,739.0 (4,511.0) Expected return on assets Other cost. 178.0 124.0 Included in operating income (old rules) Total cost. $(1,530.0) $(1,173.0) $ (994.0) In March of 2017, the FASB updated the standards for reporting pension costs. Under the old standards, the components of pension cost, such as service cost (the cost of benefits earned in the current year), interest cost (the increase in pension costs due to the passage of time), the expected return on plan assets (the amount that managers anticipate they will earn on the plan's investments), and other costs were all reflected in operating income. Under the new rules (which are now in effect), service costs will be reported as an operating cost and all the other pension costs and any expected returns will be reported as non-operating items. What will be the change in operating income for GM? Should this change matter to investors? 010 4
rage ratios and interest quarter of the year. The potential breach of concern disclosure at that time, Discuss why a violation of ise an auditor to issue a going-concern exception for Rayoniet. Financial Reporting for Pensions. Q10.3 General Motors Company Pension Costs 2018 2017 2016 Service cost 24 493.0 Included in operating income (new rules) $ 514.0 $ 654.0 Interest cost 2,514.0 (4,715.0) 2,618.0 (4,427.0) 122.0 2,739.0 (4,511.0) Expected return on assets Other cost. 178.0 124.0 Included in operating income (old rules) Total cost. $(1,530.0) $(1,173.0) $ (994.0) In March of 2017, the FASB updated the standards for reporting pension costs. Under the old standards, the components of pension cost, such as service cost (the cost of benefits earned in the current year), interest cost (the increase in pension costs due to the passage of time), the expected return on plan assets (the amount that managers anticipate they will earn on the plan's investments), and other costs were all reflected in operating income. Under the new rules (which are now in effect), service costs will be reported as an operating cost and all the other pension costs and any expected returns will be reported as non-operating items. What will be the change in operating income for GM? Should this change matter to investors? 010 4
Auditing: A Risk Based-Approach to Conducting a Quality Audit
10th Edition
ISBN:9781305080577
Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Publisher:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Chapter14: Activities Required In Completing A Quality Audit
Section: Chapter Questions
Problem 65RSCQ
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How will this change in GAAP impact GM’s Operating Income? How will investors react to this change?
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