Question

Pension data for Sterling Properties include the following: ($ in 000s)

Required:
Assume Sterling Properties prepares its financial statements according to International Financial Reporting Standards.

6% is the interest rate on high grade corporate bonds.

Determine the net pension cost.

Service cost, 2018	$	139
Projected benefit obligation, January 1, 2018		800
Plan assets (fair value), January 1, 2018		900
Prior service cost–AOCI (2018 amortization, $8)		99
Net loss–AOCI (2018 amortization, $2)		120
Interest rate, 6%
Expected return on plan assets, 10%
Actual return on plan assets, 11%

Answer 1

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Service cost	$                                                         139
Interest cost (6% x $800)	$                                                           48
Expected return on the plan assets ($900*10%)	$                                                         (90)
Amortization of prior service cost	$                                                             8
Amortization of net loss	$                                                             2
Pension expense	$                                                         107