Accounting Question Essay Example | Topics and Well Written Essays - 500 words

Accounting Question - Essay Example In addition, it is essential in the recognition of deferred tax liabilities and assets in relation to future tax consequences. On the contrary, the latter’s objective is to give the financial information which is very useful to the potential investors and creditors in making decisions about investing or providing resources to that particular organization (Kieso, 2013). For this reason, financial reports are meant for the public consumption because they show what the company can offer should they wish to make investments with them. Qn. 2. The Health of Ontario Pension Plan is of the view that pension plans are very useful because they encourage most employees to save and be certain about the future. In this context, defined-contribution and defined-benefit types of pension plans will form a major part of the discussion. Defined-benefit plan is where factors like salary, period of employment and personal history determine the benefits an employee gets. On the contrary, defined-contribution plan is where a company specifies a certain percentage of money each year that is of benefit to the employee. Defined-benefit plan’s advantages; it offers income security to the employee, shields employees from uncertainties in investment risks, allows employees to estimate their future pensions among others. However, its main disadvantages are it offers inaccuracy in the estimates, difficult in summing up all the assumptions under the DB plan, and lastly it has got many issues revolving around the off-balance sheet pe nsion accounting. The defined-contribution pension plan is important because employers are relieved from paying tax, contributions made by employees are transferred to the next of kin should the die before getting a share and contributions are voluntary. Its disadvantages are it only offers security on savings while ignoring the income, it leaves members liable to the investment risk, and members cannot estimate their total contributions and