You are the controller of a newly established technology firm that is offering a new pension plan to its employees. The plan was established on January 1, 2013, with an initial contribution by the employer equal to the actuarial estimate of the past service costs for the existing group of employees. These employees are expected to continue to work for the firm for 20 years, on average, prior to retirement. This benefit vested in two employees immediately at a cost of $20,000. The remaining $55,000 was for employees with an average of five years remaining until the benefits are vested. The company expects to realize the economic benefits from the change in plan over the next four years. The company is considering going public in the next five years, and the president has asked you to keep her aware of the accounting changes in moving from ASPE to IFRS. She wants to be sure that the company always chooses the accounting policies that are closest to IFRS so that changes in the future when the company goes public will be minimized. In addition, she is interested in demonstrating a history of profits so that the company can be taken public successfully. The following information is available for you to work with.

Instructions
(a) Without using a pension work sheet, determine the funded status of the pension plan and the amount reported on the statement of financial position at each year end, the pension expense for each of the three years, and the remeasurement (gain) loss recorded in OCI for each of the three years, using the immediate recognition approach under IFRS.
*(b) Without using a pension work sheet, determine the funded status of the pension plan and the amount reported on the balance sheet at each year end, and the pension expense for each of the three years using the deferral and amortization approach under ASPE.
(c) Explain the differences between the two approaches and make a recommendation to your employer about which approach should be used.

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2013 2014 2015 Fair value of plan assets, beginning of yeart DBO for funding purposes, beginning of yeart DBO for accounting purposes, beginning of yeart Current service cost for year Interest on the liability Past service costs granted Expected earnings on plan assets tAfter the initial contribution. $75,000 70,000 75,000 12,000 8% 75,000 8% $13,000 8% $12,500 8% 8% 8% 2013 Actual earnings on plan assets Employer contributions for the year Benefits paid to retirees by trustee 2014 10,000 15,000 4,000 2015 8,000 5,000 6,500 12,000 12,000