Question
Zimmer plc operates a defined-benefit pension plan for all employees who commenced employment with the company on or before 1 January 2011. At 31 December
Zimmer plc operates a defined-benefit pension plan for all employees who commenced employment with the company on or before 1 January 2011. At 31 December 2020, Zimmer plc had included a defined-benefit obligation of 2.6 million in its statement of financial position. This comprises:
000
Present value of defined-benefit obligation 8,400
Fair value of defined benefit assets 5,800
Defined benefit obligation 2,600
The following information relates to the year ended 31 December 2021:
|
| 2021 |
| Discount rate at beginning of year | 5.00% |
| Current service cost | 570,000 |
| Past service cost | 97,000 |
| Benefits paid to retirees | 460,000 |
| Employer contributions | 350,000 |
| Present value of obligations at 31 December | 9,507,000 |
| Fair value of defined benefit assets at 31 December | 5,172,000 |
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 Zimmer plc for the year ended 31 December 2021 in accordance with IAS 19, Employee Benefits.
What is the required accounting treatment for a past service cost in a defined benefit pension scheme?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
Understanding And Auditing IT Systems Volume 2
Authors: Young-Woon Min
2nd Edition
1257758837, 978-1257758838
