According to CFA Sample Exam: Question asking about “The underlying economic pension expense”, they answered below; calculate the underlying economic pension and other post-employment expense (income) based upon disclosures after removing the effect of amortized items and smoothing mechanisms The economic pension expense is calculated as follows: Service Cost 86 Interest Cost 147 Actual Return on Plan Assets 41 Economic Pension Expense 274 Why? The correct must be: The economic pension expense = Service cost + Interest cost - Actual return on plan asset
if I remember correctly that actual return on plan assets was a negative number - as in it was a loss…that’s why it increases your underlying pension expense in this case
you are correct, mumukada. I remember that question.
yep it’s (41)
damn… sometimes I have a hard time remembering what time I went to bed the night before… but here I can remember that that number was negative…I’ve been CFAized…!!
Oh! many thanks… I forgot that it was loss on actual return on plan asset… :~( (-)(-) = +