| [Company Name] |
Memo
To: | Chief Executive Officer | From: | Lola Fujino | cc: | | Date: | June 21, 2015 | Re: | Segments and Pension Plan | | |

The recent acquisition by our company has created two issues which need to be addressed; the two segments which are required to be reported and the two different pension plans. My goal is to eliminate the segments as well as determine the appropriate method for reporting both pension plans. Discussed herein are descriptions of the defined contribution plan, the defined benefit plan, as well as other post retirement plans. Furthermore, I have include a recommendation as to eliminating the two segments.
The expansion of our organization is indicative of our growth and success; however, with change comes difficulty in fully disclosing each financial aspect in accordance with Generally Accepted Accounting Principles. In our financial reporting, we must be thorough in explaining each of our pension plans. Beginning with the defined contribution plan, contributed to by both employee and employer of which only employer contributions are guaranteed. Accounting for this method is simple in that we shall record our liability to the extent of the contributions made (Schroeder, Clark, & Cathey, 2011).
The defined benefit plan is more complex; this plan guarantees a specific benefit amount per month at retirement. The benefit amount is determined by several factors: employee salary, years of employment, and age. With this plan, we have full control over investing decisions, as such we carry a higher liability. Statement of Financial Accounting Standards 158 states that this liability is to be reported on the balance sheet, whereas prior to this statement it was simply disclosed in the footnotes of the financials. On the balance sheet, a net pension asset or net pension liability is reported. For this plan,