Regarding Crowne Plaza's pension accounting, what was the unrecognized actuarial loss (gain) recognized in accumulated other comprehensive income for the year ended December 31, 2023?
Crowne_Plaza Franchise · 2025 FDDAnswer from 2025 FDD Document
| Year Ended | Year Ended | ||
|---|---|---|---|
| December 31 | December 31 | ||
| 2024 2023 | 2024 2023 | ||
| Fair value of plan assets | $ - $ 250 | $ - $ | - |
| Projected benefit obligation | (31,018) (34,595) | (12,418) | (13,212) |
| Funded status | $ (31,018) $ (34,345) | $ (12,418) $ | (13,212) |
| Recognized in the balance sheet as: | |||
| Pension asset – current | $ - $ 250 | $ - $ | - |
| Accrued pension cost – current | (3,249) (3,337) | (1,094) | (1,100) |
| Accrued pension cost – noncurrent | (27,769) (31,258) | (11,324) | (12,112) |
| $ (31,018) $ (34,345) | $ (12,418) $ | (13,212) | |
| Amounts recognized in accumulated | |||
| other comprehensive income: | |||
| Unrecognized actuarial loss (gain) | 1,546 3,380 | (6,702) | (6,920) |
Source: Item 23 — Receipts (FDD pages 100–424)
What This Means (2025 FDD)
According to Crowne Plaza's 2025 Franchise Disclosure Document, the unrecognized actuarial loss (gain) recognized in accumulated other comprehensive income for the year ended December 31, 2023, was $3,380. This figure reflects adjustments made to account for differences between expected and actual pension obligations and asset performance. These actuarial gains or losses are not immediately recognized in the income statement but are instead initially recorded in other comprehensive income.
This accounting treatment allows Crowne Plaza to smooth out the impact of pension-related fluctuations on its reported earnings. Instead of recognizing the full impact of actuarial gains or losses in a single year, the company amortizes these amounts over time. This amortization is then included in the net periodic pension cost, providing a more stable view of pension expenses.
For a prospective franchisee, this information provides insight into the financial management and accounting practices of Crowne Plaza, specifically regarding employee benefit plans. While franchisees are not directly involved in managing these plans, understanding how the franchisor handles such obligations can offer a broader perspective on the company's financial health and risk management strategies.