I read through on curriculum and they said that the current service cost, interest expense, and expected return of planned asset account for PnL and OPEC for OCI and amortized to PnL if needed. But why in this question, the answer given still plus past service cost (120) to calculate interest expense
If XYZ prepared its financial statements under US GAAP, the total amount
recognized by XYZ on the income statement related to its DB plan for fiscal year
2024 (assuming the company chooses not to immediately recognize the actuarial
loss and assuming there is no amortization of past service costs or actuarial gains
and losses) would be closest to:
A. 28.
B. 59.
C. 530
I find two sources with different answer: 20 and 28
Please explain, thank you alot!
I would suggest that there is an open discussion about the correct way to do this with the CFA unable to make up its mind. They have provided no evidence or citattion for any method they use.
I would suggest, though other people would not agree, that according the CFA text as currently written (and guidance from PWC) that interest expense should be based in opening obligation without adjustment for prio service costs.
Thank you all alot for exlaining for me, I would adjust the prior service cost with beginning PBO in case they choose methods which are used in the curriculum for OCI ^^ ^^
Once more question, how can you all overcome FRA in CFA level II. I find it quite complicated even though I have read all theories and note down, I still answer wrong questions in curriculum. Can you guys tell me the way to study this subject. Thank you all.
