Question
M10-19. Analyzing and Interpreting Retirement Benefit Footnote lululemon athletica discloses the following footnote relating to its retirement plans in its 10-K report for the year
M10-19. Analyzing and Interpreting Retirement Benefit Footnote
lululemon athletica discloses the following footnote relating to its retirement plans in its 10-K report for
the year ended February 3, 2019.
During fiscal 2016, the Company began offering pension plans to its eligible employees in Can-
ada and the United States. Participating employees may elect to defer and contribute a portion of
their eligible compensation to a plan up to limits stated in the plan documents, not to exceed the
dollar amounts set by applicable laws. The Company matches 50% to 75% of the contribution de-
pending on the participant's length of service, and the contribution is subject to a two year vesting
period. The Company's net expense for the plans was $6.4 million, $5.2 million, and $3.2 million
for the years ended February 3, 2019, January 28, 2018, and January 29, 2017, respectively.
a. Does lululemon athletica have a defined contribution or defined benefit pension plan? Explain.
b. How does lululemon athletica account for its contributions to its retirement plan?
c. How does lululemon athletica report its obligation for its retirement plan on the balance sheet?
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