Couple of Questions 1) Looking at the following post: http://www.analystforum.com/phorums/read.php?12,1134002,1134002#msg-1134002 The definition of actuarial G/l = actual return on plan assets - expected return on plan assets. So this explains if the expected returns changes it’s reflected in the actuarial gain or loss. But if half way through the discount rate or wage increase rate changes then where is the difference between the new rate assumptions and old rate asummptions reflected? 2) So let’s say unrecognised actuarial cost was $50 and unrecognised prior service cost was $100. Now let’s say the funded status = $1050 Now under US GAAP $1050 would be reported as an asset on the B/S. Now under IFRS you have $150 coming out of equity out of which $150x(1-t) added to assets and $150 x t reduces deferred tax liability. Is that correct? If so why does it reduce the deferred tax liability? 3) Why does an actuarial gain have no effect on PBO? 4) Can someone please give me some more example of prior service cost examples. The only one I have is “we are changing pension to give employees 50% of their final salary instead of 40%. PBO goes up $500k.” Any help on any of these questions would be much appreciated.
actuarial gains/losses do have an effect on PBO: beginning pbo +current service cost +interest cost +/-amortization of actuarial gains/losses +/-amoritzation of service cost (plan amendments) -benefits paid _____________ =ending pbo