Which most clearly describes the reporting of pension expense(income) under US GAAP compared to IFRS for EDC (a company given in the vignette, I dont think any of tht data is needed. Pg 142, CFAI) a. The net amount reported & the presentation may differ b. There is no difference in the net amount reported or in the presentation c. There wud be no difference in the net amount reported, but would be a difference in the presentation.
b? since both allow “smoothing”?
I am thinking teh answer might be a For sure presentation is different. Under IFRS all the items related to pension expense can be reflected while under US GAAP the net benefit cost can be reflected as a single line item. With respect to income, I believe the amortisation of gains and losses are shown in the balance sheet as a part of OCI. Under IFRS the amortisation of gains and losses flow thru income, so income may be different.
The answer is a.
My reasoning for A) is that vested portion of a past service cost increase is expensed in IFRS and remainder is amortized. US GAAP on the other hand amortizes it all. CFAI Pg 101 (the chart) Any other differences?