What is the difference between periodic pension cost and Total periodic pension cost?
I am using Wiley’s study prep materials and encountered a question which confuses me:
Consider the following statements:
Statement 1: Actuarial gains and losses are never recognized in P&L under IFRS.
Statement 2: An increase in the expected return on plan assets has no impact on overall total periodic pension cost under U.S. GAAP.
Which of the following is most likely?
Both statements are correct:
Actuarial gains and losses are part of the remeasurement component under IFRS, which is recognized in OCI. These gains and losses are not amortized into P&L under IFRS.
An increase in the expected return on plan assets will lower periodic pension expense (recognized in P&L) under U.S. GAAP, but have no impact on overall periodic pension cost.
The text does not explain the difference between total and periodic pension cost. Always understood it to mean the same!