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Good Afternoon,
Could you please kindly explain what is reason behind the different calculating methods?
in part a, of the question
when calculating interest on plan asset – the contribution is added to the opening FV of plan asset and the benefits paid is deducted then interest was calculated.
as per part be of the question interest was simply calculated on the opening values…Thanking you in advance.
Kind regards
KatalinIn theory, if there’s a change in the plan at the start of the year (e.g. a past service cost accruing at the start of the year) you would adjust the balances b/d before calculating the interest.
However, I have over the years seen answers inconsistent with this, and suspect that both answers would be marked right. In SBR credit for calculations is given as you long as you appear to show the right approach.
Okay, thank you very much for the clarification Stephen.
Have a nice evening.
Kind regards
Katalin
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