I had thought you always used actual return on plan assets ot calculate this formula, but i see an answer use expected return on plan assets, even though both were given.
When do you use which?
Thanks!
Was that by chance in Atlantic Preserve case on CFAI 2014 mock?
hah yes - the CFAI wording is tricking me up…
2013 Periodic Pension Cost vs. Total Periodic Pension Cost.
2013 Periodic Pension Cost = Net Periodic Benefit Cost, which is a pension expense on the income statement and has the big difference between GAAP and IFRS.
Total Periodic Pension Cost is the same under IFRS AND GAAP. Contributions - (End Funding Status - Beg. Funding Status). Some of this amoount is on the income statement and some goes to equity (OCI).
Correct?
Thanks!
yeah, I missed both of those questions - couldn’t understand what they meant.
“Periodic Pension Cost” = Pension Expense (expected return on plan assets is used) and “Total Periodic Pension Cost” = Pension Cost (actual return on plan assets is used).
I am sure I will miss this question again if see it on the actual test. Does anyone else care to comment how to correctly recognize what is being asked in the question?
I think on the actual exam they would explicitly tell you the periodic pension cost reported on P&L. If not, we are all on the same boat.
Cost is not reported on P&L; _ expense _ is reported on P&L.
It sounds as though the question writer didn’t know what he was talking about.
On the real exam they won’t foul it up.