Present your calculations and answers to the following cases and identifying the relevant considerations and main measurement criteria, both for IFRS and US GAAP, applicable to each situation:
Question1:
The following information (in $million) related to the defined benefit scheme of Basil plc for the year ended 31 Dec 20X7:
The fair value of plan assets at 1 January of 20X7 is $3,150 and at 31 December 20X7 is $3,386; contributions is $26; current service cost is $85; past service cost $150; present value of the obligation at 1 January 20X7 is $3,750 and at 31 December 20X7 is $4, 192
The discount rate was 7% at 31 December 20X6 and 8% at 31 Dece,ber 20X7
Required: Show the amount that will be recognized in the statement of comprehensive income and statement of financial position for Basil plc for the year ended 31 December 20X7 under IAS 19(2011) and the movement in the net liability.
Answer:
A | Amount that will be recognized in the statement of comprehensive income | ||
Particulars | Amount ($) | ||
Current service cost | 85 | ||
Past service cost | 150 | ||
Interest cost (Plan obligation * discount rate) | 335 | ||
Less: Interest Income (Plant assets * discount rate) | 271 | ||
Net impact | 299 | ||
B | Statement of financial position for Basil plc for the year ended 31 December 20X7 under IAS 19(2011) | ||
Present value of obligation | 4192 | ||
Fair value of plan assets | 3386 | ||
Liability recognised in the Balance Sheet | 806 | ||
C | Movement in the net liability. | ||
As at December 01, 2017 | 3150 | ||
Current service cost | 85 | ||
Interest cost | 335 | ||
Interest income | 271 | ||
Contributions (3386-3150) | 236 | ||
Benefit payments | 115 | ||
As at December 31, 2017 | 4192 |
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Please revert for any further clarifications,.
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