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IAS 19 is changing significantly but the changes are w.e.f. 2013. ACCA always adopts the policy of incorporating before time, so which IAS 19 is applicable for June 2012?
“ACCA always adopts the policy of incorporating before time, so which IAS 19 is applicable for June 2012?” Where’s that from?
Whatever, check the ACCA website, P2, examinable docoments.
You can manage that!
Hi Mike,
I’m not sure how to calculate net interest cost? Do we always calculate it on pension obligation not on pension assets? What are the principles?
Hope you can help me with this one. I have also tried to download example 3 but for some reason it is coming up with an error
Thanks
Hi
It’s the interest cost ( unwinding of discounted obligation ) calculated by multiplying the discounted obligation brought forward by the company’s cost of capital.
OK?
Hi Mike,
I’ve had a look at Kaplan’s example and there is still interest return calculated on Pension Assets and Obligation. Any difference between them was taken to OCI as a net interest cost. So does this principle comply with the revised changes?
I am not sure of interest cost ( unwinding of discounted obligation ). An example would help to solve this confusion
Thanks so much
Hi, yes, I missed the “net” in your question.
The expected rate of return on plan assets should be the same as the rate applied when discounting the future obligation. So, net interest cost is that rate (discounting rate) applied to the NET figure brought forward for “present value of future obligation less the fair value of the plan assets”
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