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Hi
I see the interest includes the opening liability plus the past service cost. Is this always the case?
Is the interest rate always the same for liabilities and assets in DBP?
Hi,
It I see mostly the case but not always the case. You need to check when the past service cost arose as to whether it needs interest unwound upon it. If it arose a thing the start of the year then it will, if it arose at the end of the year then it won’t.
Yes, the interest rate used is the same for both assets and liabilities. Under old rules it didn’t have to and different rates were used, but this now no longer applies.
Thanks
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