Rodent Limited (“Rodent”), a small Irish company that prepares its financial statements to 31 December each year, is engaged in medical research.

Additional Information 1. The directors of Rodent have decided to record the company’s property at market value rather than depreciated historic cost, with effect from 31 December 2017. The market value of the property, which equates to fair value, on this date is €500,000 higher than the depreciated historical cost figure of € 1,200,000 recorded in the statement of financial position at 31 December 2017.
2. For accounting purposes, development costs are capitalised and amortised over future periods in accordance with IAS 38 Intangible Assets. These costs are allowable for tax purposes in the period incurred.
3. The government grant, which relates to research and development activities, is nontaxable.
4, This amount represents the deferred taxation liability at 31 December 2016. The taxation rate has been 25% for a number of years and it is not expected to change.
5. This represents the balance at 31 December 2016 when the present value of the defined benefit obligation and the fair value of the scheme’s assets were each €800,000. Pension costs are charged in arriving at accounting profit when the service is provided by the employees and deducted in arriving at taxable profit when contributions or retirement benefits are actually paid. The following information relates to the company’s defined benefit scheme during the year ended 31 December 2017:
(i) the present value of the current service cost for the year ended 31 December 2017 was €160,000 before deducting employee contributions;
(ii) contributions paid into the scheme amounted to €150,000;
(iii) the scheme paid out benefits of €75,000; ;
(iv) the market yield on high-quality corporate bonds at 31 December 2017 was 10%; and (v) the present value of the pension scheme obligations and the fair value of the scheme’s assets were €1,100,000 and €1,050,000 respectively at 31 December 2017.

Requirement With respect to the financial statements of Rodent for the year see 31 December 2017:

(a) Calculate the defined benefit pension scheme:
(i) asset or liability; and (ii) expense.

(b) Calculate the deferred taxation expense and the deferred taxation asset or liability.

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ASSETS Non-current Assets Rodent Limited STATEMENT OF FINANCIAL POSITION as at 31 December 2017 Notes Book Value Tax Value 000 000 Property, plant and equipment. 1 1,200 800 Capitalised development costs 2 4,100 Current Assets Cash in hand and at bank 80 80 5,380 880 EQUITY AND LIABILITIES Equity Attributable to Owners 1 ordinary shares Retained earnings Non-current Liabilities Government grant 100 2,580 100 80 3 2,000