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march/june 2019 Q2)a) Hudson co.
sir in this question i cannot understand why additional pension contributions for employees who stay with the company until closure of Wye be recorded as “pension contributions into the plan”, as cash expenses in statement of cash flow.
The examiner answer says that it will be recorded as current service costs. But i thought of it as equivalent to cash contributions into plan, because the additional amount payable to employees should be same as additional contributions in the plan.
Your question is very unclear.
The additional contribution in return for additional employee service will be a current service cost. The cash paid will be an outflow in the CFS.
There is no such thing as a cash expense.
Please ensure you focus on my recorded debrief.