Pension expense uses expected return Fair market value calculated with actual return For the new standards - the difference between actual returns and expected returns would be included in the calculation of end of period pbo? and that would make the balance sheet balance? Thanks
pension expense is based on expected return balance sheet liability is based on actual numbers
maratikus correct but what I am asking is that pension expense has an effect on the balances sheet (re) so in order for the balance sheet to balance there must be a place where the difference between actual and expected returns is recorded. so i was thinking it must be in the actuarial changes and losses when we calculate end of year pbo.that end of year pbo is reflected in the funded status. what do you think?
not sure, florinpop.
doesn’t this difference get reflected in the DTL??? not sure though.
florinpop Wrote: ------------------------------------------------------- > maratikus correct but what I am asking is that > pension expense has an effect on the balances > sheet (re) so in order for the balance sheet to > balance there must be a place where the difference > between actual and expected returns is recorded. The is embedded in the dollar figure for expected returns. The difference between the acutual returns and expected in slowly rolled into the pesion expense over a period of five years. It is like a rolling average. Look up market related value and you will see exactly how it is calculated.
^^ concur with mwvt