Question 2 Sundial plc operates a defined benefit pension plan for its employees. The directors of Sundial plc have adopted the revised provisions of IAS 19(R) Employee Benefits. The following information relates to the Sundial's pension scheme: At 1 April 20X5 the fair value of the pension plan assets was 8,200,000 and the present value of the pension plan obligations was 8,500,000. The service cost for the year ended 31 March 20X6 was 2,100,000. The relevant discount rate for the year ended 31 March 20X6 was estimated at 6 percent and Sundial plc paid 1,900,000 in contributions to the plan. The pension plan paid 500,000 to retired members in the year. On 31 March 20X6 Sundial plc announced improvements to the benefits offered by the pension plan to all of its members. The actuary estimated that the past service cost associated with these improvements was 2 million. At 31 March 20X6 the fair value of the pension plan assets was 10,200,000 and the present value of the pension plan obligations (including the past service costs) was 12,500,000.

(b) Calculate pension funded status for the year 20X5 and 20X6 (state whether the pension plan is underfunded or overfunded). Prepare, in accordance with IAS 19 (revised) Employee Benefits, the pension extracts in the statement of financial position.