A company has a defined benefit pension plan. At 1 January 20X1 the following values relate to
Question:
A company has a defined benefit pension plan. At 1 January 20X1 the following values relate to the plan:
The fair value of the plan assets is €30 million;
The present value of the defined benefit obligation is €25 million;
There are cumulative unrecognized actuarial gains of €4 million; and The average remaining working lives of employees is 10 years.
At the end of the period, at 31 December 20X1, the following values relate to the pension scheme:
The fair value of the plan assets has risen to €35 million;
The present value of the defined benefit obligation has risen to €28 million;
The actuarial gain is €5 million; and The average remaining working lives of employees is 10 years.
Requirement Show the ways in which actuarial gain could be treated for the period ending 31 December 20X1. (Ignore the asset ceiling test.)
Step by Step Answer:
International Financial Accounting And Reporting
ISBN: 9780903854726
2nd Edition
Authors: Ciaran Connolly