when adjust NI to get CFO, why need to add employer contribution back to CFO? should employer contribution already have substraced from NI ? Thanks.
yeah but you add it back cuz it’s a noncash expense? Post an example
Employer contribution is not part of pension expense and therefor would not be included in NI calculation. Starting with NI in the indirect method, in order to correctly get CFO, you must add back this non cash pension expense (or deduct it if it pension expense is negative in the case of #36 CFAI Mock PM) and then include the actual cash expenditure of employer contributions. Does that help?
helps. thanks. westibbs Wrote: ------------------------------------------------------- > Employer contribution is not part of pension > expense and therefor would not be included in NI > calculation. Starting with NI in the indirect > method, in order to correctly get CFO, you must > add back this non cash pension expense (or deduct > it if it pension expense is negative in the case > of #36 CFAI Mock PM) and then include the actual > cash expenditure of employer contributions. Does > that help?
adjustment to NI to arrive at CFO with indirect method: NI+reported pension expense-Employer contribution that is what BSAS says.