Pension plan is underfunded by 85, unrecognized gain is 12 and unrecognized prior service cost is 27. What should be the amount on the Balance Sheet? (85) -12 + 27 = -70 But what if a company disclosed both pension asset and PBO on the balance sheet asset and liability sides? Eg. Pension Asset is 100 and PBO is 185. This gives 85 liability as mentioned in the question above. Now we have unrecognized gain 12 and unrecognized loss 27. So, the PBO is 185-12+27 = 200 and asset is 100. The net difference is net 100 liability. It can be interpreted in both ways as one reads without seeing the full disclosure. Correct me if I were wrong.

pension liability of 70 - old standard pension liability of 85 - new standard Your calculation here: “So, the PBO is 185-12+27 = 200 and asset is 100” is wrong. Use mwvt’s indirect method.

maratikus Wrote: ------------------------------------------------------- >Use mwvt’s indirect method. It should be added to Schweser books lol

85 liability is under the new rule. How do you show PBO as a seperate exhibit in this case? 185-12+27 = 200 or 185+12(gain)-27(loss) = 170. CFA exam might show PBO as a seperate exhibit. Liability is a positive number on the liability side not a negative number on the liability side. Your answer might be correct based on the method which you mentioned.