You are the financial controller of C, a entity which has recently established a pension scheme for its employees. It chose a defi ned benefi t scheme rather than a defi ned contribution scheme. C makes payments into the pension scheme on a monthly basis. C p repare fi nancial statements to 31 December each year. On 31 December 20X4 the market value of the schemes assets was $20 million and the present value of the schemes liability $22 million. Actuarial losses not yet recognised in the income statement amounted to $1.5 million. In 20 X 5 the following data is relevant: current ser vice cost : $2 m illion, unwinding o f d iscount: $1.8 m illion, expected return on pension plan assets: $2.4 million, contributions for t he y ear: $1.7 m illion. On 31 December 20 X 5 the market value of the schemes assets was $21 million and the present value of the schemes liability $22.5 million. Cs accounting policy is to defer actuarial gains and losses to future periods so far as is permissible under the requirements of IAS 19.

Requirement Determine the total charge in the income statement for pensions (excluding amounts deducted from employees gross salaries) and the amounts shown in the statement of fi nancial position in respect of pensions. Ignore d eferred t axation.