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Dear sir,
I have a question about curtailment in BPP revision Kit-preparation question 4(1):
On 1 Jan 20×8, 5 employees were redundant and $58,000 was added to the value of their pension plan.
I thought it was an expense (DR) but why the treatment of the credit side is to credit liability but not to credit asset.
Is the curtailment normally treated as liability?Thank you
Hi,
The key here is that they’re making the adjustment to the overall net pension figure and it depends on what the overall net position of the scheme is.
If the scheme is currently a deficit then the overall liability is increased. If it is in surplus then it is reduced.
Thanks
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