Coca-Cola Company Versus Pepsi Company
Coca-Cola Company versus Pepsi Company
Analyze and discuss the current effects of IFRS on the pension reporting for Coca-Cola and PepsiCo at 2009 year-end.
Pepsi and Coca Cola companies are two global competitors that have ferocious competitions with each other. The two companies have highly diversified products with varying pension plans. Pension is usually defined as a steady income that a person receives on retirement.
Recent events in the world of corporate finance have shown the importance of proper administration. Funding of corporate pension plans prompting many executives to offer only defined constitution plans. On the other hand, Coca Cola executives have rejected such approach and …show more content…
This is to make pension contribution of 1.1 billion dollars with up to one billion dollars being discretionary.
The anticipated contributions are lined up to be done in agreement with the laid down tax regulations geared towards providing for the current tax deductions for contributions. It is also used for taxation made to the employees only upon reception of the plan benefits, and bearing in mind, that retiree’s medical schemes are not a subject of the regulatory funding obligations. Therefore, it is necessary that the pension plans are funded on pay-as-you-go basis. The medical contribution and the pension amount made are subjective in nature to due to some alterations of some factors. These factors consist of adjustments in interest rates, taxes/other benefits, policies and regulations or even a deviation existing between the true and the projected asset returns.
Analyze which of the two (2) companies had a more secure pension fund, and explain why.
According to the analysis of the two companies pension schemes its shows that Coca Cola Company has a more secure pension fund. This is attributed to the fact that it uses the Dublin based captive insurer to fund the benefits that are earned by plan participants in Ireland and United Kingdom. According to company executives the plan is expected to generate significant potential financial