IAS 19 – Employee benefits – HELP !

I believe that it’s because we are applying this interest rate to the net asset as at the start of the year and the interest rate is applicable through the year

Illogically (and only in exam theory – certainly not in practice) the rate changes only as at the end of the year

Ok?

Hi,

If you read this more carefully, it says:

The interest rates on the high quality corporate bonds was as follows from the following dates:

31 Oct 20X4= 6 %
31 Oct 20X5 = 7%

This question is for the year ended on 31 Oct 20X5.So the rate that would be applicable would be 6% as it was effective from the 31 Oct X4.

I made the same mistake.

Isn’t that right @MikeLittle?

@sabyn1993 said:
Hello,

Not sure if it’s an error, but I would like to know.

Question SAVAGE about IAS 19 – employee benefits

It says in the question that :

Interest rate @ 31 Dec 2004 = 6 %
Interest rate @ 31 Dec 2005 = 7%

When unwinding the discount for the year, and even when calculating interest received on plan assets for the year, shouldn’t we take 7 % because it’s calculated at the end of the year ? The book says 6 % and I don’t understand why. Mistake on my part or on theirs ?

Thanks !

Bdolegend, this is not a question from my notes. It sounds very much like a question in a BPP revision kit (or a question from a Kaplan exam kit) (or similar from a similar organisation)