Hello, I know there are a lot of posts about this topic but none of them are clear. Even people giving answers make mistakes when they reply to threads and I think the CFA books does not do a very good in explaining this topic. Please help Periodic Pension Cost under GAAP= Current Service cost + Interest cost on obligation -Exepcted return on plan assets +Amortization of Past service cost Is that right? What about Past service cost? Now for IFRS please? Is it: Current and Past Service Cost + Interest cost on obligation -ACTUAL return on plan assets Thanks a lot!
your calculation under US gaap is not correct,
Generic formula is:
Periodic cost in P/L = Current service cost + ( interest expense - expected return on plan assets) + amortization of past service cost
I am confused about IFRS myself
Okay so solutions fo EOC were allot of help
Under IFRS the Periodic Cost to P/L = Current service cost + Past service cost + “Net Interest Expense”
Net interest expense is calculated as " (Begining Pension Liability - Beginning Pension Assets) * Discount rate"
For GAAP I got this formula from the CFA mock exam on the website. The name of the case is Atlantic Preserve. Version b of the mock. Can you double check please?
I saw this formula too. But it talks about Periodic COst to PL. Is that the same?
double post deleted
Okay my mistake your formula is correct, I kinda mixed your ifrs and us gaap formulas
yeah they are the same.
there is another part of periodic cost that is included in OCI, which includes Actaurial gains and losses and net return on plan assets only Under IFRS. (net return on plan assets = Actual return - (plan assets * interest rate)