Past Service Cost US GAAP

CFA Level II FRA
#1

Hi,

Quick question on the US.GAAP accounting treament of Past Sevice Cost. The FASB says that it goes to OCI and is amortized.

Shall we include the amortized portion (of the Past Service Cost) in IS and the Unamortized portion in OCI?

Thanks

#2

there is no past service cost in US GAAP

#3

Under gaap, past service cost goes straight to OCI then is amortized into income over the average service life of the affected employees.

#4

In IFRS, do we expense any past service cost immediately or does it go only to OCI?

#5

Expense immediately

#6

Thanks RO424. Let’s say we have 100 $ of Past Service Cost for an average life of service of 10.

BS: I would recognize 100 $ in OCI and deduct the amortization every year (100/10=10)

IS: I would recognize every year the amortization expense, 10$.

Year 1:

BS: 100-10 = 90

IS: 10

Year 2:

BS: 90-10= 80

IS: 10

…and so on