Ending PBO = Opening PBO + Service Cost + Interest Cost (+/-) Actuarial G/L - Contributions Made
https://accountingexplained.com/financial/employee-benefits/projected-benefit-obligation
Why don’t plan amendments (prior service costs) impact ending PBO?
They do.
The correct formula is:
Ending PBO = Beginning PBO + Current Service Cost + Interest Cost + Past Service Cost
– Actuarial Gains + Actuarial Losses – Benefits Paid
Your formula omits Past Service Cost and Benefits Paid, and includes Contributions Made.
Can you help me understand what the link is walking through then? I ran into a similar problem that used the same logic.
Off hand, I’d say that it’s simply wrong. The author, despite being a charterholder, blew it.