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Hello Sir! I have a doubt regarding IAS 19. While practicing one sample paper for september/december 2020 which is available in the acca website, I came across a question in section b about the projected Unit Cost Method (future salary increase). In the answer, Interest was calculated on the service cost value. So isn’t it calculated on the net obligation balance bought forward? But in the question the net obligation wasn’t given, the obligation wasn’t given and the plan asset wasn’t given. Benefits were paid from the entity.
msuvarna wrote:Hello Sir! I have a doubt regarding IAS 19. While practicing one sample paper for september/december 2020 which is available in the acca website, I came across a question in section b about the projected Unit Cost Method (future salary increase). In the answer, Interest was calculated on the service cost value. So isn’t it calculated on the net obligation balance bought forward? But in the question the net obligation wasn’t given, the obligation wasn’t given and the plan asset wasn’t given. Benefits were paid from the entity.
I have the same doubt and also additionally i want to know while its mentioned in the question that the salaries till Dec 2002 will remian at 1.1 mn and will increase by 3% only from jan 2003, why the service costs on dec 2002 is calculated at increased salary levels?
(Hoping you have watched my debrief!)
I X2 there was a service cost of 7700
It says that the closing liability will be the same as the service cost
In X3 (which is what they ask for in the later requirement) the net interest cost will therefore be calculated on 7700
Needless to say, very few candidates would have written any of this!
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