funded status

Definition

The difference between a pension plan's assets and its obligations, revealing whether there's enough money to pay promised benefits or whether future employees will be holding the bag. Spoiler: there's usually not enough.

Example Usage

The company's pension plan showed a funded status of only 75%, meaning a $500 million shortfall that keeps the CFO awake at night.

Origin

Pension accounting terminology distinguishing between overfunded and underfunded plans.

Fun Fact

Funded status is incredibly sensitive to discount rate assumptions—lower rates can instantly create billions in unfunded liabilities by increasing present value of obligations.

Source: FASB ASC 715 - Pension Accounting

Related Terms

Intermediate

impairment

The accounting equivalent of admitting your asset isn't worth what you paid for it—a painful write-down that makes both your balance sheet and your ego take a hit. When goodwill gets impaired, it means that acquisition you overpaid for isn't looking so strategic anymore. It's basically the corporate version of accepting that your 'investment' car is now worth half what you paid, except with more regulatory requirements and angry shareholders.

💰 Finance / Accounting

Beginner

FOMO Investing

Making investment decisions based on the fear that everyone else is getting rich without you, which historically has been the most reliable way to buy at the top. It's the financial equivalent of joining a dance floor just as the DJ switches to a slow song.

💰 Finance / Accounting

Intermediate

qualified opinion

An auditor's statement that financial statements are fairly presented except for specific issues, essentially saying 'mostly good but we have concerns.' It's the accounting equivalent of 'we need to talk.'

💰 Finance / Accounting

Intermediate

tangible book value

A company's book value after stripping out intangible assets like goodwill and patents—basically what's left if you only count things you can drop on your foot. It's the pessimist's version of book value that assumes intangibles are worthless.

💰 Finance / Accounting

Advanced

management carve-out

When executives negotiate a special deal ensuring they get paid even if the company fails and everyone else gets screwed. Because apparently captains should abandon ship with golden parachutes.

💰 Finance / Accounting

Beginner

debtor

A person or entity that owes money, making them the star of collection agencies' dreams and creditors' spreadsheets. In bankruptcy proceedings, they're the main character in a financial tragedy. Distinguished from a borrower by the implication that payment is overdue or the relationship has gone south.

💰 Finance / Accounting

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