i’m struggling with the Cashflow Adjustment from CFO to CFF. I understand that you can pay less than the total periodic cost, which will increase liabilities or pay more, which would reduce liabilities.
What I don’t understand is, the contribution is a cash outflow from your asset. The total Periodic Cost is a Non-Cash event, why would I change that amount from CFO to CFF on the amount of a NON CASH event?
Pretend that the company has a CFO of Zero and Funded Status of +70 USD (net of Tax). I would have to add it in CFO and subtract from CFF, but no cash was effectively used in any of those cash accounts, so I would missrepresent the actual cash movement…?
I’m lost, pls help!!!