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Hi,
I’m pretty unsure about the example 2 calculation.in the answer, there is a “remeasurement item” what is this? And how to get that figures?
Thank you very muchRemeasurements occur at the end of the year when an actuary comes along and says to the pension fund trustees “These pension fund assets are worth $XXXXXXXX and you have a balance in your financial records that says they should be worth $YYYYYYYY”
This difference is called a remeasurement and needs to be recorded in order that the correct estimated value provided by the actuary is carried forward into next year
But the actuary also does his measuring exercise on the pension fund obligations and says effectively the same to the pension fund trustees.
Thus, we have two remeasurements (one for the assets and two for the obligations)
Both remeasurements are transferred to the statement of profit or loss.
Ok?
Hi Mike, remeasurement gain/loss is recognized under OCI in SOCI and ends up in OCE in SOFP, correct?
Hi Mike,
I would like to ask about asset ceiling test
For example, if after remeasurement at year end, the pension liability is 300, the plan asset is 400m, so there is a net asset of $100m.
However, the asset ceiling is 70m, so we need to write off 30m on the plan asset.
My question is where should this 30m be recognized? P/L or OCI?
Thanks Mike, I kept thinking isn’t it like an “impairment loss”? Then it should go to P/L.
Anyway, thanks for your prompt answer! 🙂
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