during the video at @5:12 you mentioned the 3 adjustments to P&L would be against working No.5? What is working Adjustment Number 5>
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nas01·
Hi, the 3 figures mentioned will go into Group retained earnings (Working 5) included with other items added/deducted from the Parent's retained earnings (see Pg 13 of the lecture notes).
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jingdong·
Dear Tutor, in defined benefit scheme, cash contribution $6 million to this pension scheme, how to make this double entry for this transaction? many thanks
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andy31·
Could anyone advise what would go through the consolidated cash flow with regards to the pension?
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arsalanrauf·
Consolidated Cash flow (Pension) from the notes. CH 7, page 41, under Pension heading
1. Add back service costs in operating cash flows as a non-cash-item (like depreciation).
2. Deduct contributions paid in operating cash flows as a cash outflow.
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smokes2k6·
This has been extremely insightful. I had so much difficulty wrapping my head around working out pension questions and now I have a much better grasp of the subject. I now understand what the service costs are (the name is a bit misleading) and how to record them. The proforma for the reconciliation to work out the re-measurement value is also a big help. it just brings everything together nicely. Just simply plug in the numbers and you should be good!
Thanks!
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Ronald·
The asset is 66 and the liability is 75 and the difference is 9, meaning there is a net pension liability of 9 since the liability is more than the asset.
But i heard you say there is a net pension asset of 9 . Was it a mistake ?
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Sonali·
I noticed too. I think its a mistake.
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Zura·
Magnificent, thank you. At the last, when I watch your lesson, I fully understood pension scheme, especially defined benefits scheme, when the company have risks, but employee gets guarantee benefit.
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Mohammed·
Wheres the lecture?
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Thao·
Return on plan assets = 4, interest = 6.25%
=>Asset (c/f) = 64 =>Liability(c/f) = 119
Interest on plan liability= 7.44
Assume that no cash paid in/out.
Net Obligation b/f (48)
Interest expense (7.44)
Return on Asset 4
Remeasurement loss (3.56)
Net obligation c/f (55)
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Kartik·
TC has a defined benefit pension plan and prepares financial statements to 31 March each year. The following information is relevant for the year ended 31 March 20X3:
1. The net pension obligation at 31 March 20X3 was $55 million. At 31 March 20X2, the net obligation was $48 million, comprising the present value of the plan obligation stated at $100 million, together with plan assets stated at fair value of $52 million.
2. The discount rate relevant to the net obligation was 6.25% and the actual return on plan assets for the year was $4 million.
can you tell me what to do with the actual return on plan assets?
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kayee·
Net Obligation b/f (48)
Interest expense (6.25)
Return on Asset 4
remeasurement loss(4.75) bal fig
Net obligation c/f (55)
SPL:
Interest expense (6.25)
Return 4
OCI:
remeasurement loss (4.75)
For the return:
Dr Pension Asset 4
Cr Interest income 4
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Thao·
Return on plan assets = 4, interest = 6.25%
=>Asset (c/f) = 64 =>Liability(c/f) = 119
Interest on plan liability= 7.44
Assume that no cash paid in/out.
Net Obligation b/f (48)
Interest expense (7.44)
Return on Asset 4
Remeasurement loss (3.56)
1. Add back service costs in operating cash flows as a non-cash-item (like depreciation).
2. Deduct contributions paid in operating cash flows as a cash outflow.
Thanks!
But i heard you say there is a net pension asset of 9 . Was it a mistake ?
=>Asset (c/f) = 64 =>Liability(c/f) = 119
Interest on plan liability= 7.44
Assume that no cash paid in/out.
Net Obligation b/f (48)
Interest expense (7.44)
Return on Asset 4
Remeasurement loss (3.56)
Net obligation c/f (55)
1. The net pension obligation at 31 March 20X3 was $55 million. At 31 March 20X2, the net obligation was $48 million, comprising the present value of the plan obligation stated at $100 million, together with plan assets stated at fair value of $52 million.
2. The discount rate relevant to the net obligation was 6.25% and the actual return on plan assets for the year was $4 million.
can you tell me what to do with the actual return on plan assets?
Interest expense (6.25)
Return on Asset 4
remeasurement loss(4.75) bal fig
Net obligation c/f (55)
SPL:
Interest expense (6.25)
Return 4
OCI:
remeasurement loss (4.75)
For the return:
Dr Pension Asset 4
Cr Interest income 4
=>Asset (c/f) = 64 =>Liability(c/f) = 119
Interest on plan liability= 7.44
Assume that no cash paid in/out.
Net Obligation b/f (48)
Interest expense (7.44)
Return on Asset 4
Remeasurement loss (3.56)
Net obligation c/f (55