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why is the DBO of subsidiary is deducted to calculate the expense of pension to be added in consol SCFs ?
the DBO of subsidiary is also a liability, shouldn’t it be added?
The interest and current service costs are both non-cash expenses so are added back. The liability acquired on acquisition of the sub needs to be removed from this figure, so we DR Liability CR Expense. As we’re crediting the expense then we reduce it.
Debits and credits always help!
i understood the current service and past service cost part
can i know why, the DBO is deducted?
its a liability and thus have to be shown in Consolidated SFP right?
it will not affect Consolidated SCFsIt is in the finer detail of the information given in the question. It states “Angel had included the obligation assume don the purchase of Sweety in current service costs above” and so it therefore needs to be removed.
Thanks
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