Yeah it worries me that “Periodic Pension Cost” appears on both sides of the table 
- God as if this stuff wasn’t fiddlly enough without bloody naming convention issues.
oh, no no no… Im not going through this again… lol… is that why I got so crossed up, “period pension cost” can actually be referred to BOTH expense or total cost… jeez louise… I’m sticking to periodic pension cost = pension expense… (the I/S side). Thanks Gebura for your input.
Thank you Gebura, my confusion on Pensions has been answered. Now I gotta memorize it.
I finally get it.
Total Periodic Pension cost is the SAME in IFRS and GAAP. It be calculated using two methods as described above.
Total Periodic Pension Cost = Portion allocated Income Statement + Portion allocated to Other Comprehensive Income.
The portion that’s allocated to Income statement is the Periodic Pension Cost/Expense which is different between GAAP and IFRS.
How come actual return is subtracted? Is this part of the remeasurement portion? If so, the curriculum says the difference between the actual return on plan assets and the amoutn included in the net interest expense/income calculation. Is that what you meant by subtracting actual return only?
The difference between (for GAAP) actual return and expected return goes into OCI.
Total periodic cost includes all the costs in the P/L and OCI. So Actual returns = Exptected returns (+/-) gains or loss.
For IFRS, Actual returns = net interest income (expense) +/- gains or loss.
What goes in OCI is the difference between your actual returns on plan assets, and what you’ve recorded in the income statement, which is a function of funded status for IFRS, and a subjective expectation for GAAP.
All remeasurement goes into OCI for both IFRS and GAAP, no?
Where does the gains or loss come from in this case? I’m not talking about actuarial gains or loss. I’m talking about the difference between “expected/discount” return and the actual return. So the remeasurement equation I have is:
subtract [(beginning planned assets * expected/discount) - actual return]
For IFRS, Actual returns = net interest income (expense) +/- gains or loss.
I’m not worried about what goes into OCI and what goes into NI, I want to know how the remeasurement portion is incorporated into the total pension cost.
All remeasurement goes into OCI for both IFRS and GAAP, no?
Where does the gains or loss come from in this case? I’m not talking about actuarial gains or loss. I’m talking about the difference between “expected/discount” return and the actual return. So the remeasurement equation I have is:
subtract [(beginning planned assets * expected/discount) - actual return]
I’m not worried about what goes into OCI and what goes into NI, I want to know how the remeasurement portion is incorporated into the total pension cost.
There is no remeasurment portion for plan asset return in total periodic cost. Only the actual returns on PA, which is the portion recorded in IS + OCI.
The remeasurments are related to actuarial assumptions, or prior service costs.
Can you please look on page 180 of book 2? Bullet #3 under 2.3.2.2
Remeasurement. The third component of periodic pension cost is remeasurement of the net pension liability or asset. Remeasurement includes (a) actuarial gains and losses and (b) any differences between the actual return on plan assets and the amount included in the net interest expense/income calculation. Under IFRS, remeasurement amounts are recognised in OCI. Remeasurement amounts are not subsequently amortised to P&L.
What does the bolded part mean?
EDIT: Maybe I’m misreading it but it sounds like it is the difference between actual and expected (or discounted in IFRS).
Let’s say, under GAAP:
Expected interest income: $20 Interest expense: $30.
So your total periodic cost would increase by $10 in NI.
Actual return: $25
Therefore, in the remeasurement portion (OCI), periodic cost would be adjusted for -$5 ($25 - $30).
What’s wrong with my logic?