Guys , what are the pension costs that are eligible to be capitalized and what is the appropriate accounting treatment ?
No pension costs are eligible to be capitalized.
Therefore, the appropriate accounting treatment is trivial: none.
actually they are and the rules are changing on this soon. Less will be eligible for capitalization going forward, but still a portion. A quick google search gives details.
Not according to CFA Institute; I presumed that his question pertained to the CFA curriculum.
If not, then, because you generally treat current service costs the same way as you treat the corresponding labor cost, if you capitalize the direct labor cost (including it in the value of inventory, then expensing it as COGS when that inventory is sold), then you could do the same with the corresponding current service cost.
Yeah in the CFA curriculum they mentioned that example , but your elaborations make it more clear thank you
My pleasure.
Pension costs pertaining to inventory are indeed capitalized.