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Hi Mike
1. In 12/07 paper, I have DR retained earnings $20.5
DR OCI $1.5
CR Liability $15
CR ???
I do not know what to credit? and also the contribution $17, where does that go?2. I have read the changes and additions to p2, but cannot find notes in the open tution notes, if possible can you please send me a link with notes on new additions.
Thanks alot
$17? Dr Plan Assets $17 Credit General Cash? $17
As for the rest – you’ve lost me! Where does 20.5 come from and 1.5? And Cr Liability 15?
Please let me know and I’ll see if I can help
Thanks.
You have not answered by second question? notes with ias 41 I have found in the iasplus website. Can you please send me link to notes with the other additions to the syallabus?
Regarding to the ias 19. The $17 is contributions
$20.5 is the net interest cost $20 + current service cost $0.5 = 20.5
the 1.5 is the net remeasurement loss. the $15 is the net obligation for the year ended 31/10/2007.so where does the contributions $17 go? is it to the SOFP or the P/L? and under what heading.
Dr Plan Pension Plan assets, Credit general cash
Karen, I’m trying to find out what happened to the IAS 41 chapter but, meanwhile, you could go to page 149 in the F7 course notes because it’s in there as a new addition too
The integrated reporting chapter IS in the P2 course notes
In the pension plan question, here we go!
The Plan Asset Account looks like this
Debit side, brought forward 190, contributions received 17, expected return on plan assets 13.3 (7% x 190)
Credit side paid out 19, carried down 225.
That leaves a re-measurement gain of 23.7
Obligations account looks like this
Credit side, brought forward 200, current service cost 20, interest cost 10 (5% x 200)
Debit side paid out 19 carried down 240
That leaves a re-measurement loss of 29
Brought forwards and carried forwards are merely balancing figures and are not “double entered” as such – they are part of the balance sheet
Current service cost, interest cost, return on plan assets are all double entered to the statement of profit or loss
Re-measurements are double entered to OCI
Cash paid out is double entered in the obligations account and in the plan assets account
Cash paid in is double entered to the general cash account of Macaljoy
(You would have been able to see all of that if you had followed the course notes and lecture on Justina!)
OK?
in the solution they have used 5% for expected return on assets rather than the 7%.
and what about the net obligation at the yr end does that go to liability? if there is a deficit.thanks mike, i will look at the notes meantime.
What chapter is the new changes in? I went through to have a look at the chapters is it environmental reporting?
thanks
No – the last chapter called “Integrated reporting” (?)
The Agriculture chapter is to be uploaded in the next few days!
The net obligation is merely a balancing figure and will be shown under long term liabilities
I do blieve that 7% has been used – check it and, if I’m wrong, post again!
Yes 5 percent is used. That was in the bpp book solutions.. I initially used 7 percent as well but looked at the answers and was wrong. So which rate will I use if a question like this comes up.
The last chapter is chapter 16. Which is not intergerated reporting.
I’m talking here about the course notes – the last chapter is chapter 30 starting on page 205 on integrated reporting
In Macaljoy 5% is the rate applied for the interest cost (5% x 200)
The expected return on plan assets DOES IN FACT USE 7% (7% x 190 = 13.3)
Oh ok where did you see those solutions? so in general if a question does come up similar to this i will use expected return rate when it comes to working out the interest?
NO! The rules have changed! The method now is to calculate the interest cost on the net figure of Obligation – Plan Assets at the blue chip rate of interest
“Oh ok where did you see those solutions?” They are in the ACCA’s own “past examination” pages
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