Hi guys,
on page 201 of the 2nd book (reading 20, example 6), it talks about how a pension contribution in excess of the pension cost is taxed. this seems to insinuate pension contributions flow through the P&L… which i’m not sure how that works. i was under the understanding that a pension contribution was strictly cash flow based, i.e. decrease in cash & cash equivs via CFI and increase in plan assets. pension contributions flowing through the P&L would cause tax credits/charges, that I wouldn’t think would arise with pension plan asset contributions.
can anyone help shed some light on whether pension contributions flow through the income statement?