The reading on pension expense suggests that for analytical purposes, the analyst should adjust the pension expense on the income statement by appropriately allocating the individual costs. That is, instead of subtracting the entire pension expense ias part of operating expenses, the book suggests only backing out the current service cost from operating income, actual (not expected) return as part of nonoperating income/expense and add the interest portion to interest expense.
Fine, i get that. My question is though, what about the other 2 components of pension expense: actuarial gains and losses and past service cost - where should those be included, amortization expense ??
I know those are deferred costs, but are included in full when calculating economic pension expense, what is what i thought we’re doing here since we’re including actual return and not expected return. Either way, why does the text ignore the breakout of these two components?