Coca-Cola Company Versus Pepsi Company

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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 preferred the option of cash balance plans design of defined benefit plans. In the year 2009, Coca Cola became the third major employer who had adapted the cash balance plan when it reported $31.9 billion in operating revenue. This value was higher than the values of $28.9 billion reported in the preceding year. According to Sue Flemming, the director of the Atlanta based Coca Cola global benefits; the cash balance plan has the appeal of offering risk free benefits well as secure benefits to employees. The planned design increases mobility of the work force. In addition, other benefits that are based on career average pay accrue faster when compared to the traditional former entailing workers working for many years prior to accrue any benefit. Therefore, the broader pension funding reforms that are provided by the law has ensured that employers are empowered to set up the new cash flow system without the fear of facing the threat of litigation especially that result from being sued for age discrimination (David, 2011). Pepsi Inc. is one of the major employers who are still planning to offer new employees a final salary pension. High quality schemes are essential in helping them in planning a secure retirement both for themselves and...
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