defined benefit pension

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October 18, 2017 at 10:02 pm #412388
jingdong
Participant
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Dear Tutor, there are two different way to calculate interest cost on obligation.
in some cases, (opening balance +past service cost)x interest rate, however
in some cases, opening balance x interest rate. although there was past service cost available.
what are they different things/
Many thanks
October 23, 2017 at 9:13 pm #412982
P2-D2
Keymaster
- Topics: 4
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Hi,

You need to read the specifics within the question. If the past service cost on relates to the start of the current year then there will be no interest charged on it. If it relates to prior periods then there will be interest to accrue.

Thanks
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