Is the discount rate and expected return on assets usually the same % number? If they are different why? I don’t have answers…trying to understand.
discount rate is wuts used to bring the ABO and he PBO to the present value to put on the balance sheet expected return on assets is athe % of the begginnin PBO which is expected to be made over the year.
I always associate discount rate to an inflation rate long term… because you are basically trying to adjust from year to year the money you owe to employees - so they keep their purchasing power. basically carrying pbo in real terms as for expected return I would assume a lot of it needs to be in investment grade bonds - but even so on long term you would expect it to be a higher number than the discount rate
^^ agree with florin