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Daniels plc operates a defined-benefit pension plan for all employees who commenced employment with the company on or before 1 January 2012. At 31 December

Daniels plc operates a defined-benefit pension plan for all employees who commenced employment with the company on or before 1 January 2012. At 31 December 2021, Daniels plc had included a defined-benefit asset of 700,000 in its statement of financial position. This comprises:

000

Present value of defined-benefit obligation 3,800

Fair value of defined benefit assets 4,500

Defined-benefit asset 700

The following information relates to the year ended 31 December 2021:

2021

Discount rate at beginning of year

9%

Current service cost

150,000

Past service cost

158,000

Benefits paid to retirees

190,000

Employer contributions

370,000

Present value of obligations at 31 December

5,200,000

Fair value of defined benefit assets at 31 December

6,000,000

Required

Record the T accounts and journal entries for the above defined benefit employee benefit plan.

Outline how the defined-benefit pension scheme would be shown in the financial statements of Daniels plc for the year ended 31 December 2021 in accordance with IAS 19 (Revised), Employee Benefits.

Explain the entries to the Other Comprehensive Income account and state where the balance is recognised. Briefly outline the background to this required treatment.

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