Hi can some please help! CFAI p.135 Q9 Why is the periodic pension cost added back to NI and contributions deducted from NI to reconcile CFO and NI??? So upset. I thought I know FRA well. =(
Because the periodic pension expense is a non-cash charge (it is just an accounting entry) while the contributions are cash. So to arrive at CFO you need to add back the non-cash pension expense and deduct the contributions.
Deduct contributions or contributions (1-t)?