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Exercise 17-18 (Algo) IFRS; actuarial gains and losses (LO17-7, 17-12) Patel Industries has a noncontributory, defined benefit pension plan. Since the inception of the plan, the actuary has used as the discount rate the rate on high-quality corporate bonds, which recently has been 5%. During 2021, changing economic conditions caused the rate to change to 4%, and the actuary decided that 4% is the appropriate rate. Required: 1. Does the change in discount rate create a gain, or does it create a loss for Patel under U.S. GAAP? 2. Assume the magnitude of the change is $13.3 million. Prepare the appropriate journal entry to record any 2021 gain or loss under U.S. GAAP. If Patel prepares its financial statements according to U.S. GAAP, how will the company report the gain or loss? 3. If Patel prepares its financial statements according to International Financial Reporting Standards (IFRS), how will the company report the gain or loss assuming the magnitude of the change is $13.3 million? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Does the change in discount rate create a gain, or does it create a loss for Patel under U.S. GAAP? the A decrease in the discount rate from 5% to 4% projected benefit obligation. When the obligation reported as a , it is Required 1 Required 2 > Required 1 Required 2 Required 3 Assume the magnitude of the change is $13.3 million. Prepare the appropriate journal entry to record any 2021 gain or loss under U.S. GAAP. If Patel prepares its financial statements according to U.S. GAAP, how will the company report the gain or loss? (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in millions rounded to 1 decimal place (i.e., 5,500,000 should be entered as 5.5).) Show less View transaction list Journal entry worksheet Required 1 Required 2 Required 3 If Patel prepares its financial statements according to International Financial Reporting Standards (IFRS), how will the company report the gain or loss assuming the magnitude of the change is $13.3 million? (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in millions rounded to 1 decimal place (i.e., 5,500,000 should be entered as 5.5).) Show less View transaction list Journal entry worksheet