Question

Carla Vista Corporation sponsors a defined benefit pension plan and reports under IFRS. On January 1, 2020, the company reported plan assets of $1,900 and a defined benefit obligation of $2,000 (all amounts in thousands of dollars). During 2020, the current service cost was determined to be $171, the discount rate on the DBO and plan assets was 6%, while the actual return on the plan assets for the year was $105. Carla Vista made contributions of $175 into the plan at the end of the year and the benefits paid amounted to $122. The plan was amended effective December 31, 2020, with the cost of the past service benefits granted being $76.

Determine the deficit of the pension plan at January 1, 2020, and calculate its December 31, 2020 deficit balance directly, by identifying which 2020 pension events increased the deficit, which decreased it, and which had no effect. (Enter answer in thousands of dollars. Round answer to 0 decimal places, e.g. 5,275.)

Plan deficit, December 31, 2020

  

Answer 1

	$ in '000
1st January, 2020
Plan Assets	$                             1,900
Plan Liabilities	$                             2,000
Deficit as on 1st Jan, 2020	$                             (100)
Add:- Actual Return	$                                105	Decreased Deficit
Add:- Contributions Made	$                                175	Decreased Deficit
Less:- Benefits Paid	$                                122	Increased Deficit
Less:- Service Cost	$                                171	Increased Deficit
Less:- Past Services Benefits	$                                  76	Increased Deficit
Deficit as on 31st Dec, 2020	$                             (189)