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Hi Mike
Since my last comment Im now reviewing this chapter as part of my revision and with more care since I had skipped this and later questions in the chapter during learning it the first time around. Im having a lot of trouble trying to figure out how (or perhaps more appropriately why) we arrive at the figures for net cost of 2100 and re measurements (and what is a remeasurement) of 53,000 and 153,900. (I guess the confusion is due to the differing answer in the notes compared to the video since the changes). All the rest is very easy to me in this Q but I have wasted too much of the limited time left trying to figure this out and so I once again turn to you for another dose of your kind wisdom and guidance!
Thanks in advance!The 2,100 is the net interest cost. The opening position was 900,000 assets and 930,000 liabilities – a net liability of 30,000
Interest cost was 7% and is applied to the net position at the start of the year.
53,000 and 153,900 are both “remeasurements”
Before the most recent revision, the IAS used to talk in terms of “recognised” and “unrecognised” gains and losses.
That’s now gone and any “formerly called” gains or losses in the asset or the obligation account is now credited or debited in th wear in which they occur.
The Ugly Account is no more, and nor is the “corridor”
So when an actuary tells us that the assets at the end of the year are $XXXXX, that’s the figure we carry forward in the asset account. The same applies to the obligation.
So the 53,000 and the 153,900 are simply the balancing figures that make the assets and the liabilities add up to the value that the actuary has told us
Better?
Thanks Mike. Your answer has resolved my confusion about the Corridor and the Ugly accounts and confirmed the net liability of 30,000.
Thanks Mike. I will take a better look at your explanation when I come back to this subject(…in order not to waste time jumping back and forth since I moved on). It seems clear though at first look.
Once again thanks a million for always solving all our problems!!Hi,
i am trying to figure out from where did $191,000 come up from (when calculating the 8% interest for 2010) as i followed the trail for 2009 and my calculation came up to $131,000?
Thanks in advance for your time.
Hi,
You’ve not added the 60,000 adjustment to the scheme at the start of the year. This additional amount will also be subject to the 8% interest.
Thanks
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