Question regarding periodic pension cost (FRA pg 101)

I was just doing the EOC questions for FRA, and at page 101, question 9 onwards, why do we use beginning benefit obligation and plan assets of 42,000 and 39,000 for our calculations? Why not use ending?

Thanks in advance!

The interest cost is the interest over the year on the benefit obligation. You calculate it therefore on the beginning obligation.

Under US GAAP you calculate the expected return on plan assets. Again, you need beginning values.

Hope this helps.

Agree with above answer. This makes sense to me because the interest is calculated based on what you started with (beginning values). Think of it as if you have $10 savings/loan as beginning balance, the interest will be calculated on that, not after the adjustments.

In question 9, they have asked P/L component as per IFRS. In this one of the component is Net interest income/expense, which is calculated as Discount rate x Beginning Funded status

Whereas in question 10, they have asked P/L component as per US GAAP. In this the interest expense is calculated as Discount rate x Beginning PBO